Posts

M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up?

M2 Velocity is the measurement of capital circulating within the economy.  The faster capital circulates within the economy, the more that capital is being deployed within the economy to create output and opportunities for economic growth.  When M2 Velocity contracts, capital is being deployed in investments or assets that prevent that capital from further circulation within the economy – thus preventing further output and opportunity growth features.

The decline in M2 Velocity over the past 10+ years has been dramatic and consistent with the dramatic new zero US Federal Reserve interest rates initiated since just after the 2008 credit crisis market collapse.  It appears to our researchers that these extended periods of zero interest rates deflate the capability of money circulating throughout the economy and engaging in real growth opportunities for investment and capital inflation.

It also suggests that the US Federal Reserve, while attempting to support the US economy and global markets, maybe destructively engaging in policy that removes the capital function from the markets in a systematic process.  Eventually, something will break related to M2 Velocity and/or the global economy.  As more capital pours into less liquid assets and/or broader investment funds and Bonds, this process ties capital up into assets that take investment away from Main Street and the lower/middle class.  There is less capital available to support the ground level economy as more and more capital ends up buried in longer-term investment assets.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

VELOCITY OF M2 MONEY STOCK

US FEDERAL FUNDS RATE CHART

We believe the collapse of the M2 Velocity rate is similar to a slow decline of economic capacity and output over a longer period of time.  We believe this process will likely end in a series of defaults and bankruptcies as a result of capital being stored away into longer-term assets and investments (pensions, investment funds, and other types of longer-term assets).  As this capital is taken away from the core engine of economic growth (main street and startups), the process of slowly starving the economy begins.

We believe we’ve already entered a period of decline that has lasted at least 15+ years and the “blowout process” that ends this decline will be somewhat cataclysmic.  One way or another, the function of capital must return to levels of activity that supports a ground-level engagement of economic growth and opportunity.  A healthy balance of capital available to all levels of society and deployed in means to support growth and opportunity is essential for the proper health and future advancement of global economies.

It appears that after 2008-09, the global economy disconnected from reality as investors began relying on institutional level investments and speculation in large scale assets instead of ground-level investments and core economic function.  This translates into a very euphoric mode for stocks and commodities where capital chases capital around the planet seeking out undervalued and opportunistic investments…  until…

Pay attention to what happens over the next 4 to 5+ years related to the COVID-19 virus event.  We believe this virus event could be a “monkey wrench” in the capabilities and functions of the global economy over the next 5+ years. Pay attention to what is really happening as capital plays the “dog chasing its tail” routine and the central banks attempt to stimulate economic activity by printing more and more money.  If you understand what we are trying to suggest in this article – printing more and more money at this stage of the game is like saying “diving our of the 20th-floor window is not enough – let’s go up to the 50th floor and give it a try”.

Hang tight, there are going to be some very interesting and big price swings over the next 4+ years in the US and global markets.  Skilled technical traders should prepare for the opportunity of a lifetime if they understand what to watch for and how to protect assets.

You don’t have to spend days or weeks trying to learn my system.  You don’t have to try to learn to make these decisions on your own or follow the markets 24/7 – I do that for you.  All you have to do is follow my research and trading signals and start benefiting from my research and trades.  My new mobile app makes it simple – download the app, sign in and everything is delivered to your phone, tablet, or desktop.

I offer trading signals for active traders, long-term investors, and wealth/asset managers.  Each of these services is driven by my own experience and my proprietary trading systems and modeling systems.  I have a small team of dedicated researchers and developers that do nothing but research and find trading signals for my members.  Our objective is to help you protect and grow your wealth.

Please take a moment to visit www.TheTechnicalTraders.com to learn more.  I can’t say it any better than this…  I want to help you create success while helping you protect and preserve your wealth – it’s that simple.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

Gold Stocks Are Overbought. You Don’t Want Prices to Go Straight Up

Bill Powers of MiningStockEducation.com talks with a professional trader and market commentator Chris Vermeulen says gold stocks are overbought and need a breather which would be good for the overall upward trend.

Chris shares how he has and is trading the junior gold sector. He called the recent February 24th top in the gold stocks before the March crash. And now he is warning to a top in some gold-stock positions during an expected pullback.

Chris also addresses whether a lot of the gap-up’s in many gold stocks must be filled before they can run higher. This interview is full of advice from an experienced trader in the gold sector.

Be sure to sign up for Bill’s free newsletter and receive interview transcripts, stock profiles, and investment ideas: http://eepurl.com/cHxJ39

0:15 Introduction
1:25 Do these gap-up’s in the charts of many gold stocks need to be filled before they can go higher?
3:14 Liquid companies more likely to get their gap-up’s filled?
5:23 Chris called the Feb 24th high in the junior gold stocks
7:32 How do you time your entry into and exit out of tiny gold juniors? 11:03 What type of pullback in gold stocks should we expect?
12:37 How Chris approaches riskier trades
15:10 Navigating trading the futures market
16:22 How are you trading oil?
18:38 Extreme volatility leads you into cash?
20:00 CAD to trend lower against the USD?
21:12 Do you close your trades before a long weekend?
22:41 What makes your trading service unique?

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is an incredible year for traders and investors.  Don’t miss all the incredible trends and trade setups.

Subscribers of my Active ETF Swing Trading Newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. This week we closed out SPY ETF trade taking advantage of this bounce and entered a new trade with our account is at another all-time high value.

Ride my coattails as I navigate these financial markets and build wealth while others watch most of their retirement funds drop 35-65% during the next financial crisis.

Just think of this for a minute. While most of us have active trading accounts, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during the next bear market, you could lose 25-50% or more of your net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Passive Long-Term ETF Investing Signals which we issued a new signal for subscribers.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Real Estate Showing Signs Of Collateral Damage – Part IV

This final part of our multi-part Real Estate article should help you understand what will likely transpire over the next 6+ months and how the unknown collateral damage may result in a “Double-Dip” price event taking place before August/September 2020.  In the first three parts of this article, we’ve attempted to highlight how the current COVID-19 virus event is different than any of the previous two crisis events.

We’ve also highlighted how consumer psychology will change over the next 12+ months as this event continues to unfold.  Most importantly, we attempted to highlight how the disruption in income, one of the biggest factors we should consider, for businesses, individuals, states, and governments will likely present a very real contraction event over the next 24+ months.

It is difficult to really explain how so many people fail to see what we are seeing in terms of our research.  Yes, the COVID-19 virus event will end at some point and the economy will begin to engage at growing rates.  Yet, the process of getting to that stage is likely to be full of unknown economic events over the next 24+ months.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

We’ve published articles suggesting our Super-Cycles and generational cycle research suggests we have entered a 10 to 20 year period of “unraveling and crisis processes” before a rebuilding phase can begin to take place.  If our research is correct, this unraveling and crisis phase will end near 2025~26.  This suggests we have another 5+ years of unknown collateral damage and unknown economic events

On February 24, 2020, we published this article which is very important because it warned our followers to prepare for a crisis event and to protect your portfolios with what to expect in the yield curve.

Our suggestion is to plan to set up your portfolio so you have sufficient cash in reserve in the event of an unexpected market decline.  We also suggest proper protection/hedge investments, such as precious metals and metals miner ETFs.

The reality is that mortgage delinquencies have already begun to skyrocket higher.  It is obvious to anyone paying attention that the lack of real income opportunities for individuals and businesses will translate into major economic collateral damage processes (crisis events) playing out over the next 12+ months. Depending on how the COVID-19 virus lingers throughout the world and the extent of the global shutdowns, we could be on the cusp of experiencing one of the biggest “revaluation events” in history.

This Bloomberg article summarizes our research and thinking nicely. Despite government support, we believe a massive revaluation event related to Real Estate and other assets is just starting to unfold.  Skilled technical traders will stay keenly aware of this potential event and position their portfolios to protect assets in the event of a sudden change in trend.

Price trends have just started to move lower based on this data from Realtor.com up to March 2020.  We believe the April and May data will show a substantial collapse in pricing levels – particularly in areas that continue to experience high COVID-19 issues.  This suggests California, Washington, New York, New Jersey, Florida, and other areas could experience a sustained price decline lasting more than 12to 24 months.

Florida Real Estate Price Trends

Washington Real Estate Price Trends

Watch as more populated areas (cities and larger regional areas) see a shift in consumer sentiment related to Real Estate price levels over the next 6+ months.  Once the consumers start shifting away from seeing Real Estate as an opportunity at any price and begin to watch the price levels drop, their psychology changes in terms of “when will the bottom happen?”.  Once this happens, the markets change into a Bear market trend for real estate as at-risk homeowners are placed under severe pricing pressure and markets continue to implode.

What this means for skilled technical traders is that opportunities will be endless over the next 12+ months to target real gains through skilled technical trades.  As capital shifts from one sector to another – avoiding risk and attempting to capitalize on the opportunity, skilled technical traders will be able to ride these trends and waves to create substantial gains.

Protect your portfolios now.  Don’t fall for the overly optimistic “follow the NQ higher” trade as risks are still excessive.  Wait for the right setups and determine how much risk you can afford to take on each trade. This is not the time to bet the farm on one big trade – wait for the right setups and wait for the collateral damage to play out.

It doesn’t matter what type of trader or investor you are – the move in Gold and the major global markets over the next 12+ months is going to be incredible.  Gold rallying to $2100, $3000 or higher means the US and global markets will continue to stay under some degree of pricing pressure throughout the next 12 to 24 months.  This means there are inherent risks in the markets that many traders are simply ignoring.

I keep pounding my fists on the table hoping people can see what I am trying to warn them about, which is the next major market crash, much worse than what we saw in March. See this article and video for a super easy to understand the scenario that is playing out as we speak.

If you want to learn more about the Super-Cycles and Generational Cycles that are taking place in the markets right now, please take a minute to review our Change Your Thinking – Change Your Future book detailing our research into these super-cycles.  It is almost impossible to believe that our researchers called this move back in March 2019 in our book and reports.

If you have been following me for a while, then you know my analysis and trades are the real deal. You also would know that I made over $1.9 million from the financial markets during the 2008 crash and recover into 2010. I have been semi-retired since the age of 27.  I continue to follow, predict, and trade the markets because its the ultimate business and my passion.

A bear market and its recovery can make your rich in a very short period. I believe this is about to happen again, so why not follow my super simple SP500 ETF investing strategy?  Trade with your investment account and become a stock market success with me!

I’m offering my investing signals for the next few years to those who want to know their investment capital is in the asset. Let face it; there is a time to be 100% long stocks, to own an inverse fund, and when to sit in cash. Your financial advisor would NEVER recommend a cash position, why because he is not allowed, he and his firm will not make money. Instead, they will keep you long stocks, with some bonds, and you will have to ride out the bear market rollercoaster again.

During the March Market crash, the BEST position was cash for short term trades. EVERY asset fell in value (stocks, bonds, gold, commodities) two months ago. Only one asset rallied, guess what it was? The USD dollar (CASH), moving to USD cash, gained a whopping 11% while most indexes and sectors fell 35-80+%. all you had to do was close all positions in your portfolio, and you would have looked like a hero, and that’s what I did with my account and members of my swing trading newsletter.

Follow me to success. Trade my most simple single ETF investing strategy and know when to own stocks, when to own an inverse ETF, or be in cash. For only $149 you can have the keys to the kingdom during a time when we are going to experience more historical price swings. This is as good as it gets, in my opinion.

Even if we don’t enter a new bear market this year, my investing signals will still nail the bull market and make you a ton of money. This is the most affordable insurance plan for your retirement account, so you don’t lose it – Period! Get Access Here

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

Subscribers of my ETF trading newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. This week we closed out SPY ETF trade taking advantage of this bounce and entered a new trade with our account is at another all-time high value.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Gold Stock About To Rally While Oil Becomes Less Than Worthless, What?

Another great morning talking with the team at TraderTV.live

These guys are nothing short of incredible traders, educators, and entertainers. If you want a morning trading show that timely, gives out trade ideas, and will make you laugh, this is it, guys!

I keep pounding my fists on the table hoping people can see what I am trying to warn them about, which is the next major market crash, much worse than what we saw in March. See this article and video for a super easy to understand the scenario that is playing out as we speak.

If you want to learn more about the Super-Cycles and Generational Cycles that are taking place in the markets right now, please take a minute to review our Change Your Thinking – Change Your Future book detailing our research into these super-cycles.  It is almost impossible to believe that our researchers called this move back in March 2019 in our book and reports.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

Subscribers of my ETF trading newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. Yesterday we closed out SPY ETF trade taking advantage of this bounce and our account is at another all-time high value. Exciting times for us technical traders!

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Real Estate Crash Is The Next Shoe To Drop

The past few weeks and months have been very interesting to see how the global central banks and governments have attempted to position themselves ahead of this COVID-19 virus event.  We continue to suggest that we are just starting the process of navigating through this potentially destructive virus event.  We believe the sudden onset of the virus pandemic has sent a shock-wave throughout the globe in terms of expectations and valuations that are, just now, starting to become “real”.  Let us try to explain our thinking and how this relates to Real Estate…

Before we continue much further, we suggest taking a moment to review our previous research articles related to the Real Estate market which we predicted the selloff and falling values. Both of these articles were at the top of the Yahoo finance and Google with hundreds of thousands the week we posted them:

Real Estate Crash Predicted Part I – Click Here
Real Estate Crash Predicted Part II – Click Here

The COVID-19 virus event is a global crisis event that is currently in the very early stages of consumer psychological processing.  All types of crisis events prompt some forms of typical human reaction.  We believe the Real Estate market may be the next big asset revaluation event as consumers continue to process the COVID-19 virus crisis and the consequences of this event.

REAL ESTATE CYCLES

Real Estate cycles typically transition through the following phases as supply and demand functions work through the markets.  Pay attention to the middle of this cycle chart.  In the Expansion and HyperSupply stages, once supply peaks and prices somewhat peak/stabilize, a transition takes place in the market where buyers chase premium properties and push price levels moderately higher.  The Recession Cycle is typically a disruptive cycle that is the result of an economic/income disruption.  When people can’t earn enough to satisfy their debt obligations and or provide for their families, then the Real Estate cycle begins to contract.

An event like this, the COVID-19 virus event, would typically start out as a regional/local event.  This did happen as it roiled certain areas of China in late 2019.  Watching how China attempted to manage and hide the extent of the virus explosion within their country was painful to watch.

The Chinese state media was pushing out information and numbers which didn’t match anything seen on the streets and being reported by others within China/Hong Kong.  This “disconnect” and the misinformation presented within this early virus pandemic event is critical to understanding how the world will now deal with this mess.  So, keep in mind, everything was somewhat “clicking right along” in late 2019 and early 2020 as China was fooling the world.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

AS IT UNFOLDED…

The Chinese New Year celebration fell on January 25, 2020 (Year of the Rat).  Near this time in China, hundreds of millions of people travel “back home” to celebrate the New Year with their families and friends.  As this travel starts typically 4 to 5 weeks ahead of the date of the New Year, China allowed potentially infected people to travel throughout the world before shutting down travel within China on January 23, 2020.  This locked infected and uninfected people into areas within China while the Chinese government began extended efforts to control the virus outbreak.

By early February 2020, the virus had been confirmed in India, Philippines, Russia, Spain, Sweden, the United Kingdom, Australia, Canada, Germany, Japan, Singapore, the US, the UAE, and Vietnam.  In essence, the Chinese lock-down presented a very real opportunity for those that had visited China and left to be “locked into location” outside the quarantined areas within China.  If they were infected or asymptomatic carriers, these people now became source-spreaders.  On February 3, 2020, Chinese President Xi Jinping indicated the Chinese government knew about the virus well before the public alarm was raised – as reported by the Chinese state media.

By Mid February 2020, China had over 40,000 infections and over 900 confirmed deaths related to the COVID-19 virus.  Nearly a week later, near February 19, China reported more than 74,000 total cases and 2,100+ deaths.  By this time, general global panic had already been set up and this is the point of this article – how consumers respond to a crisis event like a virus pandemic. (Sources: www.aljazeera.comwww.businessinsider.com)

The reason we went through all of this detail is to illustrate how the virus event started as a localized event in China, near the end of 2019.  Yet, by early February 2020, less than 35 days later, the virus event suddenly became a global event – panicking the world.  The COVID-19 virus event has now turned into a global economic disruption event that has dramatically reduced most people’s ability to earn an income.  Businesses and individuals will feel the consequences of this event and we believe the economic contraction is just starting. How do consumers respond to an event like this?

In PART II of this series, we’ll continue to delve into the reasoning behind our research and why we believe the Real Estate market will become very risky for investors over the next 24+ months.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

The Fed Induced Twilight-Zone

The past three weeks have been filled with intense drama, incredible highs and lows, political battles that continue to this day, and millions of questions from people throughout the world.  Throughout this COVID-19 virus event and the collapse of the US and global markets, one continued belief has prevailed – the US Fed will attempt to rescue the global markets (again).

Late last week, President Trump announced a task force to evaluate how and when to reopen the US economy and more than US nine states have already committed to a staged reopening process.  COVID-19 virus being what it is, the US is going to attempt to lead the way forward.  This means every resource and every effort will be taken to engage in a proper process to protect our future while battling this virus outbreak.

This was also a pivotal week for the US Stock market. With the US Fed in buying mode attempting to counter the recent weakness in the markets, literally trillions of dollars have poured into the US stock market over the past 5+ days.  The Dow Jones Industrial Average rallied 532 points (+2.2%).  The NASDAQ rallied 581.50 points (+7.06%). The S&P 500 rallied 89.25 (+3.2%).  Obviously, capital is pouring into the NASDAQ faster than the other major indexes and this suggests investors believe in the earnings and future capabilities of technology companies over more traditional market segments.

Continued global economic weakness and shuttered US states will have a chilling result on Q2 outcomes and revenue growth.  We continue to believe Q2 and Q3 of 2020 will be much weaker than investors are expecting and we believe the US Fed has lulled many investors into believing a “deep V bottom” is the most likely outcome.  Over time, we believe the loss of 20+ million working Americans and the destruction of the shuttered global economy will translate into much weaker global market price levels.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

NASDAQ (NQ) WEEKLY CHART

This NQ weekly chart highlights the real potential for downside risks.  The appreciation in price from the 2016 levels are a direct result of investor anticipation of growth after the 2016 election.  What’s changed is that a major risk to the markets has unraveled more than all the growth we’ve accumulated over the past 2+ years.  Investors should stop to consider the real economic outcome over the next 2+ years before jumping into the Fed-backed Twilight Zone.

As the total scope of the global economic environment continues to shift, it does make sense that certain technology companies may benefit from any type of extended virus event.  Gaming companies, technology suppliers and resellers, certain software companies and a host of streaming and content firms may gain users and incomes over the next 12+ months.  Yet, we continue to believe the COVID-19 virus event may continue to present risks in the markets going forward.

The NY Federal Reserve issues a GDP Nowcast which attempts to translate forward economic GDP outcomes in near-real-time.  The current level for Q1 2020 GDP is -0.4% and -7.9% for Q2 2020.  This suggests the second, and possibly third, quarters could be substantially weaker overall than what we’ve just experienced over the past 50+ days.    Even though the stock markets began to collapse on February 25, 2020 – we really didn’t begin to understand the total scope of the economic contraction until nearly the middle of March (very late in Q1).  Q2 may reflect the complete global economic burden of this virus event and we believe investors are failing to comprehend the total scope of this risk at the moment and how it relates to future earning capabilities.

Weakness in Q2 and possibly Q3 earnings for 2020 could have a shock-wave across many sectors of the US and global markets which we are somewhat blindly ignoring.  Asset values, belief in a “V” type bottom setup, lack of disruption for state and local governments and others seem to continue to be the prevailing attitude.  With the US Fed to the rescue, somehow investors seem to believe the recovery process will only take a few weeks or a few months.

We found this information very interesting in terms of how local governments generate revenues and how the virus event may present a very real 20 to 40% revenue contraction for state and local governments over the next 24+ months.  Based on this data, nearly 40 to 50% of annual revenue to state and local governments may be at risk.  When we consider the 20+ million people in the US that have recently filed for unemployment (nearly 6% of the total US population and 8% of the total working population), we can’t expect a stellar economic output.

S&P 500 (ES) MONTHLY CHART

This ES Monthly chart highlights our expectation that the US Stock market will attempt to establish a deeper bottom in price that may take the form of a FLAG formation setup.  We don’t believe the continued disruption to the global markets will do anything to support the past 3+ week recovery in the US markets.  Global investors will likely end up backing the US as the leader in this recovery, yet we believe the actual bottom in the markets will take place over the next 12+ months and likely complete just before the November 2020 elections.

CONCLUDING THOUGHTS:

Our proprietary modeling systems have reflected the recent strength in the US stock market adequately – yet they have failed to result in any changes regarding allocation into the markets.  For right now, everything stays the same as it was.  We do believe the Fed’s buying will potentially prompt a “false trigger” if the rally continues.  We will assess the trigger when and if it happens in the near future.

Until we get a more accurate understanding of the risks, we feel it is much safer to assume the worst-case scenario going forward.  There is simply no way to paint a positive picture when people throughout the globe are losing their jobs, incomes, and all sense of normalcy.  The reality is that this disruption in the global banking and financial sector is certainly a big one that could last well into summer. If you read this article or watch the video you will understand the magnitude of this market top that looks to be forming.

As of right now, skilled investors are preparing for a potentially deeper price bottom and watching what is happening in the markets with interest – waiting for the right trigger to jump on the next big trend.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Banking & Finance Expected To Get Crushed

Big news out today on CNBC about Gilead drug cured all 125 people from serious COVID-19 conditions within 5 days, This is amazing to hear, stocks are popping today up 3-5% which is to be expected for this type of news but the damage to the financial markets has already been done.

But early data recently published suggests the Banking and Finance sector may continue to get crushed under a massive weight of real losses and exposure to risk in the Derivatives Markets.  As with the 2008-09 Credit Crisis, Derivatives losses extended compound risk factors by 10x to 20x or more for in some instances.  We believe the banking and finance sector may be setting up for a massive implosion if global derivatives implode as leveraged accounts collapse.

Two very interesting news articles that may assist readers in understanding the current Financial market contagion event are:

Bank Earnings Armageddon by TheInstitutionalRiskAnalyst.com

Xi fears Japan-led manufacturing exodus from China by Asia.Nikkei.com

The Chinese/Asian economy is built upon the premise that global demand will continue without interruption over the next many decades.  Additionally, China and Asia have leveraged capital systems and financial functions by deploying a very shadowy measure of lending and banking functions.  We’ve all heard the stories of how collateral-based loans were offered many times over as stock in Copper or other raw materials were simply moved from one location to another to secure loans on the same material.

As with any great Ponzi scheme – it all starts to collapse when investors decide they don’t want to play games any longer.

FEDERAL RESERVE – RETAIL & FOOD SERVICES SALES

These recent St. Louis Federal Reserve charts paint a fairly clear picture that retail and food services sales have collapsed to below levels of 4+ years ago – and this is just getting started.

FEDERAL RESERVE – BORROWER DELINQUENCY RATE

This next chart shows that sub-prime borrower delinquency rates have already peaked above both the 2000 and 2008-09 peak levels.  The current virus event collapse is a completely different beast of destruction than what we’ve experienced before.

This is why we believe the Banking and Financial sectors are about to get hammered over the next 6+ months as a massive credit and debt deleveraging process continues to take place.  Consumers recently displaced from the workforce will suddenly find themselves without the ability to pay their bills and credit card balances.  This is not just happening in the US or select areas – this is happening throughout the world right now.  Banking and Finance are staring into a black hole in terms of just how big and destructive the displacement of consumer jobs/earnings capacity really is.

We believe the recent recovery in the US stock market was a reactionary event prompted by the US Fed stepping in to “stick their finger in the dike” as an effort to thwart the downside price collapse.  When the reality of the situation really begins to settle in about 60 days, banks and other financial institutions are going to have a difficult time explaining losses and exposure to derivatives risks that were clearly evident in March and April 2020.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

WEEKLY CHART – NASDAQ REGIONAL BANKING INDEX

This first Weekly chart of the NASDAQ Regional Banking Index shows just how destructive the initial downside price move has been.  Even though the US Fed stepped in with a massive $5+ trillion rescue plan, the recovery in this sector has been minor.  We believe that is because most investors understand the true risks in this sector are likely in the hundreds of trillions range with derivatives and leveraged positions.

UCC WEEKLY CHART – CONSUMER SERVICES SECTOR

This UCC Weekly chart shows a bit more of a recovery after the US Fed stepped in to save the day.  Yet, we fully believe a deeper price low is likely to set up as the full extent of total newly unemployed put additional strains on expectations.  Consumers without income can suddenly collapse multiple trillions in credit/debt over a very short period of time.

XLF FINANCIAL SECTOR WEEKLY CHART

The XLF Financial Sector Weekly chart paints a very clear picture of the downside risks current in play.  After a massive initial collapse, a brief sideways recovery has taken place.  Yet the true risk for this sector takes place over the next 24+ months as these newly displaced workers attempt to manage with little or no income and attempt to satisfy debt levels that were acquired expecting pre-2020 income expectations.  New cars, new homes, new credit card debt, new everything purchased on credit has suddenly become the beast that destroys the financial/banking sector.

CONCLUDING THOUGHTS:

Our researchers believe the true scope of this crisis won’t be known for at least another 30 to 60+ days.  The closer we get to the end of Q2, the more likely we are to see real data reflecting real risks in the Banking and Financial sectors.

Until we get a more accurate understanding of the risks, we feel it is much safer to assume the worst-case scenario going forward.  There is simply no way to paint a positive picture when people throughout the globe are losing their jobs, incomes, and all sense of normalcy.  The reality is that this disruption in the global banking and financial sector is certainly going to be a big one that could last many months or years and if you read this article or watch the video you will understand the magnitude of this market top that looks to be forming.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

If Investors Crunched Data This Their Expectations Would Change Dramatically

New economic data being released as earnings start to hit may alter how investors perceive the recent price recovery in the US and global markets.  Many institutional analysts began suggesting “the bottom is in” and recently began to issue stronger forward guidance.  The new data suggests we are seeing an economic contraction that, in some cases, maybe 2x or 3x the contraction that took place in the 2008-09 Credit Crisis.

The US stock markets reacted to this news and earnings data by collapsing over -2% in early trading.  Gold and Silver are both lower as we write this article which would indicate weakness across the broader market.  We continue to believe a deeper price low will set up in the near future with the US and global stock prices attempting to retest recent price lows – possibly falling below these levels.  We believe the collateral damage to consumer engagement, manufacturing, transportation, retail/leisure, real estate and other sectors of the economy is just now starting to become evident.  What the economy may look like near Mid-May is anyone’s guess.

MANUFACTURING OUTPUT INDEX

One of the most interesting data items published recently in the US Manufacturing Output Index which reported at -6.3%.  This is the largest downside (negative) print going back over 20 years.  It is nearly 2x larger than the deepest levels from the 2008-09 Credit Crisis and nearly 6x the levels of the 2001 9/11 terrorist attacks.  This time it really is different.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

NEW YORK EMPIRE STATE MANUFACTURING INDEX

The New York Empire State Manufacturing Index was no different – posting a level at -78.20%.  This massive negative number is nearly 2x the deepest levels printed during the 2008-09 Credit Crisis and clearly illustrates how the COVID-19 virus event has disrupted manufacturing output across the globe.  Depressed manufacturing translates into decreased shipping, decreased supply, decreased demand, and decreased overall economic engagement (employment, support services, taxes, and others).  A number similar to the lows of 2008-09 would be sufficiently terrible.  A number that is 2x below the lowest levels in 2008-09 is absolutely destructive to forward expectations.

NAHB REAL ESTATE INDEX

Real estate is starting to feel the pinch too.  The NAHB Real Estate Index came in at 30.  The only times in history where this level has been reached were September 1990, October 2006, and June 2007.  These areas in history clearly point to an early recession indicator in the markets.  We found it interesting that September 2001 (9/11) didn’t experience any major downside print in the NAHB index.  The lowest level reached after 9/11 was 46 (November 2001).  The current 30 level is shocking.  If history is any indication of what to expect in the future, this real estate index may attempt to set up an extended bottom near or below 15 to 20 over the next 12+ months.

REDBOOK INDEX

Lastly, the Redbook Index – which printed a level of -8.3.  This index of over 9000 retail locations is one of the broadest market indicators of consumer/retail-based activity in the US.  Obviously, with the shutdown taking place within the US and across the globe, we were not expecting any type of fantastic number. Yet our concern is that consumer engagement continues to slowly emerge from the shutdown over the next 12+ months and the collapse in retail may become prolonged

Historically, this is the deepest level printed on the Redbook Index since 2008-09.  We believe the continued shutdown and disruption to traditional manufacturing, supply and retail will continue to present very negative outcomes for global economic measures.  Thus, we believe the risks to the US and global stock market are still very real for skilled traders.

CONCLUDING THOUGHTS:

The US Fed and global central banks are doing everything possible to support a shocked global economy – yet they can’t print enough money to replace the global activity of consumers, manufacturers, and traditional economic functions. They can just attempt to “patch things up” while they wait for consumers and manufacturers to begin operating near-normal levels.

It is very important for skilled traders to understand the bigger economic risks that are at play and to understand the process of price moves within the current market cycle.  I was recently interviewed about my market opinions and stated very clearly how investors could fall into a “suckers rally” trap.  Listen to my talk here.

Be prepared for more downside risks and a potential for a much deeper price bottom over the next 6+ months.  Those individuals/firms suggesting “the bottom is in” are certainly jumping the shark, in our opinion, right now.  It’s a pretty big event to come out right now and tell investors “buy these dips because we believe the US Fed has everything under control”.  Be cautious and use your own skills to wait for a proper bottom setup.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Could This Be a “Suckers” Rally?

Everyone I know who is not involved in the stock market or has little knowledge about it is calling me and asking what stocks, indexes, and commodities to buy because everything is so cheap and dividends are juicy again.

Just look at the market sentiment chart, and price cycles that the stock market goes through, and listen to my talk below while reviewing these to images. It’s not rocket science, but the lack of education on the financial markets coupled with the force of greed to make money and miss out on the next big bull market has everyone getting suckered into this dead-cat bounce, also known as a bear trap, bear market rally.

LISTEN TO MY TALK – CLICK HERE

If you want to see something else really exciting/nerve-wracking/ and real check out this post on the Stock Market Top.

A subscriber to my market video analysis and ETF trading newsletter said it perfectly:

“Always intrigues me how many amateur surfers get to the north shore beaches in Hawaii, take one look at monster waves and conclude it’s way too dangerous. Yet the amateur trader looks at treacherous markets like these and wants to dive right in!!” Richard P.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over we profited from the sell-off in a very controlled way.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Downside Opportunities Everywhere – Watch These Symbols

As the global markets enter the Q1 earnings season where a host of new data and expectations will flood the markets over the next 30+ days, skilled traders should put these three symbols on their watch-list over the next few days and weeks.

We’ve been writing about how we believe the downside risks within the US and global stock markets are still very real.  Many industry analysts believe the bottom has set up in the US stock market already – we don’t believe this is the case.  Our Adaptive Fibonacci Price Modeling system continues to suggest a deeper downside move is in the works and we believe this potential retest of recent lows will setup another incredible opportunity for skilled traders.

Recently, we’ve posted a number of research articles to help you understand what is really taking place in the global markets.  The COVID-19 virus has set-off a consumer demand contraction event that will ripple across all sectors of the global economy.  There is no other way to interpret the data right now – if consumers don’t come back into the economy at levels near the late 2019 engagement levels, then the global economy will continue to contract.  Consumers make up over 85% of GDP values.

HERE ARE SOME OF OUR MOST RECENT ARTICLES TO ASSIST YOU…

Now, onto the three symbols setting up an incredible upside opportunity if the global markets rotate lower as our predictive modeling is suggesting…

FAZ – DIREXON INVERSE FINANCIAL SECTOR ETF

The first symbol is FAZ.  This ETF moves higher as the financial sector stocks move lower.  These include banks, financial institutions, and other financial services companies.  The reason we believe FAZ has a potential to move higher is that we believe the lack of consumer engagement in retail, restaurants, leisure shopping and other types of normal spending activities will put incredible pressure on business loans, consumer loans, commercial and residential real estate, business credit lines and many other aspects of the financial sector.  Simply put, it would be foolish to think that some level of default and/or extended risks would not come from any type of consumer disengagement from the economy.  Again, consumers make up over 85% of the total GDP levels.  If we take away even 20% to 30% of these consumers, we could see a dramatic collapse in certain sectors of the economy.

Thus, we believe the Financial sector is poised for another downside price move which will prompt a rise in FAZ from current levels to near $50~$60.  This represents 65% to 85%+ upside potential.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

MZZ – PROSHARES ULTRASHORT MIDCAP 400 ETF.

The MidCap sector is uniquely vulnerable to any economic contraction related to consumer activity.  Many of the Midcap companies are uniquely consumer-based and/or consumer sector related.  Thus, should another market downtrend attempt to retest recent lows or attempt to set up a deeper price bottom, the Midcap 400 ETF may see an incredible upside price move.  Upside price targets are near $29 to $30 – which is 55% to 65% higher than the current price level. Ultimately, any deeper price lows set up because of a deeper price bottom setting up in the US and global markets could push MZZ well above $35.

QID – PROSHARES ULTRASHORT QQQ ETF

The last symbol we believe could see a big upside move related to increased future risk in the US and global markets is QID – the NASDAQ Inverted ETF.  The reason we believe risks in the US and global major markets may bleed over into this ETF is that the NASDAQ has been a major component of US & foreign investment over the past 24+ months.  Global investors continue to believe that technology firms will out-perform the general market – thus, more capital has poured into this sector of the market over the past 20+ months than many other sectors.

This capital influx also creates an opportunity for contrarian traders if the markets fail to recover – as many people believe will happen.  This capital that has recently poured into the NASDAQ may become “at-risk” if another deeper downside price move takes place.  Investors may have hard stops in place and forced selling may take place if the markets attempt to establish a deeper price bottom in the near future.

Conservatively, an upside price move in QID to levels near $27 (45%) is the first Fibonacci target. Further upside target levels near $30.50, $42.50 and $44.25 also exist. Of course, these higher target levels would be the result of a much deeper global market collapse where a deeper bottom in price is established.

CONCLUDING THOUGHTS:

We believe these three symbols present very real opportunities for skilled technical traders.  Wait for the right setup and confirmation before jumping into these trades. If the US and global markets begin to move lower on poor earnings or economic data, jump over to these charts to see how they are reacting to price weakness.  There is a very real opportunity for 20~40+% profits in each of these charts with the right setup in place.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.