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Emergency Technical Traders Market Crash Update & Video Analysis

The US stock market opened Sunday, March 8, 2020, dramatically lower.  Oil collapsed 25% to near $30.  Gold shot higher to levels just above $1700.  All of the major US indexes were lower than 5%.  As of this morning, the US major indexes are lower by 6.40%, and oil down 23%. Bonds are set to open 7-8% higher at this time.

As mentioned in yesterday’s update, we could see metals and miners get hit with margin calls, and silver took a beating last night down over 5%, and miners are down 5% in pre-market, so things could get uglier yet.

The war on oil has officially started. To me, it’s a typical bully/bad guy move. When everyone is bleeding, and in trouble like the financial markets, everyone’s mental state, and our health, the true bullies and bad guys (sharks) come out of the woodwork. Russia is being difficult and will keep production high for oil; the Saudis are giving out hug discounts on oil and jacking up their production to flood the market with their oil and take as much of the market share possibly. When blood is in the water, the sharks attack.

This oil war is going to devastate the USA and Canadian oil sectors and businesses if the price of oil trades between $20-35 per barrel, which I think is what will happen and could last a few years.

The US futures for stock hit a circuit breaker and halted futures trading of the Indexes once a 5% drop took place, but ETF and regular stocks will continue to trade. The next round of circuit breakers are only during regular trading hours and was implemented after the May 10, 2010, flash crash.

This new set of circuit breakers have never been hit before which are:
A drop of 7% stock halt for 15 minutes.
A drop of 13% stocks halt for 15 minutes.
A drop of 20% stocks halt for the rest of the session.

This is a huge breakdown in the US markets and indicates much greater weakness within the global markets and further concern that the COVID-19 virus may continue to disrupt the US and European markets (as well as others).

The potential that multiple billion-dollar disruptions in the US and other foreign markets, including travel, leisure, autos, hospitality, and many others, may see a continued decline in sales and incomes over the next 6+ months.  We don’t believe we will truly understand the total scope of this COVID-19 virus event until possibly well after July 2020.

The crazy part is I’m in a little secluded town in Canada, and people are starting to panic and buy food and toilet paper for their bunker stash. Almost everyone I talked to this weekend while out snowboarding has been affected by manufacturing, trade show cancellations, travel restrictions, etc..  We are in a full out global crisis that seems to affect everyone in some way no matter their location, occupation, or business.

There will be some great opportunities to find and execute incredible trading opportunities – yet the risks are very high right now for volatility and price rotation.  Think of the markets like a body of water in a severe storm.  The waters are very choppy, unstable, and chaotic – just like the markets.

Unless you have the right information, skills, and vehicle to navigate these waters, there is a very high probability that a dangerous outcome could happen. I closed out our last position on Friday with our TLT bond trade for a 20.07% profit and we are 100% cash watching this market VS trying to survive it.

Right now, Cash is king.
Waiting for proper setups and understanding risks is critical.  Timing your entries and targets is critical.  Learning to stay away from excessive risk is essential.

We’ll scan the markets for you and find the best opportunities that set up over the next week.

We appreciate your loyalty and want to continue to deliver superior analysis and research.  Please be well aware that the current market environment is very dangerous for traders.  The VIX recently touched above 50.  We believe it could reach levels above 75~90 still.  These are incredible levels for the VIX.

WATCH VIDEO ANALYSIS

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Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

Financials Setting Up An Island Top Formation

As we continue to scan the charts for setups and trigger to alert our followers, we’ve come across a setup that may be more ominous than what it appears.  Recently we’ve posted articles about how the SPY and the NQ have pushed into new all-time high price territory and how Gold is setting up for a momentum base that should launch precious metals to near highs.  We’ve also discussed how we believe the current upside price bias in the US stock markets should last another 10~35+ days before new price weakness sets up – possibly pushing prices lower in late May or early June 2019.

Our research team has been scanning the charts looking for anything that could give us an edge to the potential setup for this price weakness in the future.  We believe the Transportation Index and the Financials could be keys to understanding how far the upside rally can continue and when a price peak may begin to warn of a potential price top or rollover.

An Island Top is a pattern that sets up with an upside price gap followed by sideways price action above that gap.  In theory, this type of setup should promote the gap to be filled with downside price action before any further upside price move can continue.  Although, gaps to the upside are fairly common in strong uptrends.  Given the strength of the earnings data released early this week and the expectations that we have for some continued upside price bias over the next 10~35+ days, we are watching these Island Top formation in the Financials for any signs of weakness to alert our followers.

This Daily FAS chart highlights the GAP as well as the Resistance levels that are currently acting as a ceiling.  A breakout above the resistance level would indicate that we have more room to run higher.  Any failed breakout to the upside, where price briefly rallies above the resistance level, then falls back below it, would be a pretty strong indication of a rotational peak.  The Financials could fall 10% from current levels and still be within the range of the March/April lows.  It would take a much bigger move to qualify as a breakdown bearish trend.

 

This Daily XLF chart highlights a similar pattern to the FAS chart.  The key element of the XLF chart is that the Resistance level provides more key fundamental price peaks than the FAS chart.  On this XLF chart, we can see that the current Resistance level aligns perfectly with the Nov/Dec 2018 highs.  We can also see a short GREEN Fibonacci trigger level line in early March 2019 above the Resistance level.  That Fibonacci trigger level is still valid and any move above that level would constitute a new bullish price trend trigger.

Any failure to break the Resistance level would qualify as a price rotation to fill the GAP and potentially set up a move back to near $25 looking to find new support.  Overall, the Financials are poised for a move – up or down.  Our research suggests the US stock market is not done rising, thus we are concerned that certain sectors may begin to show signs of weakness as the broader market continues to rise.

 

Our research team believes a critical peak formation is likely near the end of May or in early June 2019.  It is because of this belief that we are warning traders to play the next 15~25+ days very cautiously.  Watch the Financials, the Transportation Index, the US Dollar, and Precious Metals.  We believe any early signs of weakness will be found within these symbols.

With a total of 55 years of technical analysis and trading between Brad Matheny, and myself Chris Vermeulen, our research and trading signals makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and Trading Courses are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.

Chris Vermeulen

Our April 21~24 Gold Call Is Here

One of the most important things about making calls about any future price movement is to have confidence in your research team and systems.  The second most important thing is to make these calls public so everyone can see if you were right or wrong about your predictions.  Predicting the future, often many months in advance, is not an easy task.  We like to ask people, how many people do you know that can predict something in the future, almost to the exact day, and find they were accurate more often than being wrong?

Well, this is the time we’ll see if our predictions are accurate or not.  Back in October 2018, we issued a research post indicating that Gold would rally above $1300, then stall, then set up a momentum base between $1260 and $1275 near mid-April or early May.  Here is a link to that public post: https://www.thetechnicaltraders.com/45-days-until-a-multi-year-breakout-for-precious-metals/

In February/March 2019, our research team honed in on the April 21~24 dates as a key cycle date for a very likely momentum bottom setup.  You can read our research here.  We believe these dates will be key to the future rally in Gold and they may very well be the last time we see sub-$1300 price levels for a while, but gold does need to reverse to the upside this week.

Currently, Gold is trading at $1278.10 with a recent low at $1273.  Remember our original prediction that the momentum base would likely setup between $1260 and $1275?  Right now, we believe this Momentum base is setting up exactly as we predicted back in October 2018 – over 6 months ago.

As we continue to watch this Momentum Base setup play out, we urge skilled traders to watch the outlying symbols for signs of confirmation and validation.  The news about the Iran Oil Sanctions, today, may become a key element going forward – but it is too early to tell right now.  We believe some global economic event will drive prices of Gold much higher over the next 30+ days.

Gold has moved lower over the past 30+ days from the $1340 level down to near the $1270 level – just as we predicted as well.  The timing of this recent downswing in price is perfect for our April 21~24 Momentum Base call.  We do believe there is still a chance that a $1255 to $1260 level may be seen this week or next.  The Momentum Bottom/Basing formation may form over a 7 to 10+ day range.  So, pay attention to these opportunities in Gold over the next few days and weeks.

NUGT (3x gold miners bull ETF) continues to fall as Gold Bases.  In fact, NUGT has fallen to levels that we have not seen since January 2019.  The reality of the matter is that NUGT may be the best confirmation tool/symbol we have right now for timing the end of our Momentum Base in Gold.  When NUGT rotates higher and forms the base, it will very likely mark the end of weaker prices for the entire precious metals sector and the beginning of the upside price rally we have been predicting.

As our research team likes to state – this is “do or die” time with regards to our predictions from many months ago.  We’ve stuck by them for months, telling anyone who would listen this setup would be the last time you see sub-$1300 levels in Gold for many months – possibly years.  If our analysis is correct, we suggest you pay attention to these symbols and lower Gold price levels right now.  Once this move begins to rally, it could take the markets by surprise.

Our expectations are that by mid-May, or so, we should already be in an upside price swing that should be targeting the $1450 to $1550 level.  This means we have about 7 to 15 trading days until we start to see some real upside price move in precious metals.

We should remind you that gold needs to find a bottom this week and price could become choppy and volatile.

Get ready and follow our research.  How many other research firms do you know that are capable of calling the markets 6+ months in advance with this type of accuracy?

Please visit www.TheTechnicalTraders.com to learn how we can help you find and execute better trades for your future.

Chris Vermeulen