Almost counter to current institutional thinking, the strength in the US Dollar will likely continue to push the US stock market higher over the next few weeks/months and act as a supporting price bias in any event of a short term global/us stock market price collapse. Many traders/investors fail to understand the capacity of the US Dollar to wreak havoc on foreign markets as well as to act as a support level for US equities and US investments.
The support level near $96 is currently acting as a solid price floor. Our researchers believe an attempt to breach the $99 level will happen soon and this continued strength will put further pressures on foreign currencies, commodities, metals and trade issues.
These shifting dynamics of the currency markets are presenting very clear evidence that investors believe stronger, more mature economies are going to continue to perform over the future months that weaker, more at-risk economies. The Japanese Yen, Canadian Dollar, Swiss Franc, and US Dollar are all performing quite well in this Year-To-Date comparison graph (below). The New Zealand Dollar, Euro, British Pound, and Australian Dollar are all dramatically weaker.
Our research team put this comparison chart together to further illustrate the weakness of Asian currencies in relation to the relative strength of the US and major global currencies. This chart attempt to compare currency strength by grouping relative currency pairs and comparing them as an Asian Currency Group vs a Global Major Currency Group. As price advances, the Asian Currency Group is relatively stronger overall. As price declines, the Asian Currency Group is weakening and the Global Major Currency Group is strengthening.
Currently, this chart shows the fragility of the Asian Currency Group. Any break of the lower price channel level and we enter a new downside price trend that may attempt to establish a much lower price support channel for Asian Currencies, Asian Stock Markets, and the overall global markets.
Our researchers believe the continued strength of the US Dollar and the US stock market are pushing historical normal price ranges beyond expected boundaries. As gold increases because of fear and greed, countries with larger gold reserves can attempt to offset certain losses from currency and economic weakness. Yet companies and governments that attempted to leverage the “Dollar Carry Trade” environment from years ago may find themselves in very dangerous territory as Asian currencies continue to weaken.
A stronger US Dollar will attempt to mute the upside price activity of Gold and Silver while pushing these currencies into deeper and deeper valuation declines. See our recent charts and short term dollar/gold forecast here. A continued shifting of capital away from “at-risk” economies/nations could push these currencies into a death spiral type of free-fall over time.
We believe the US Dollar will continue to move moderately higher over the next 4+ weeks and likely attempt to move towards the $99 price level. This move will somewhat mute the advance of Gold and Silver, yet we believe the weakness that is likely to unfold in the foreign currency markets will prompt renewed fear and greed – pushing Gold prices much higher – even as the US Dollar continues to strengthen.
Once the XAUUSD level breaks the $1440 level – it should rally up to the $1615 to $1625 level very quickly. This would likely be the breaking point for the Asian currencies as well. A move like that would likely push these Asian currencies below historical price envelopes and create a panic-type of a capital shift away from risk.
Our research team believes this move will likely happen sometime between Mid-August and early September 2019. This means we are only about 35 to 45 days away from an incredibly volatile price swing in the global markets. This is something that most traders/investors have failed to even begin to comprehend or consider.
What would happen if the Asian capital markets and currencies collapsed on broad weakness and a major credit/debt crisis event? An event where currencies devalue to a level that suggests forward operations are severely threatened, the rising price of Gold is not offsetting losses and commodity prices collapse pushing even further pressures on commodity/currency backed loans/debt?
Be prepared for these incredible price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our Wealth Building & Global Financial Reset Newsletter. You won’t want to miss this big move, folks. As you can see from our research, everything has been setting up for this move for many months – most traders/investors have simply not been looking for it.
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I can tell you that huge moves are about to start unfolding not only in currencies, metals, or stocks but globally and some of these supercycles are going to last years. A gentleman by the name of Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. 2020 Cycles – The Greatest Opportunity Of Your Lifetime
As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.
I’M GIVING THIS GOLD BAR AWAY WITH 2-YEAR MEMBERSHIPSAND 1OZ SILVER ROUND TO 1 YEAR SUBSCRIBERS
https://thegoldandoilguy.com/wp-content/uploads/2019/07/104.png508850adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-07-09 12:05:442019-07-09 12:05:44US Dollar Strength Will Drive Markets Higher
The Federal Reserve announced they were leaving rates unchanged on Wednesday, June 19. The markets were expecting this or a quarter percent price decrease. Initially, the markets reacted to the news by moving to the downside recently. The markets immediately reversed the upside rather dramatically showing that investors believed that that may move into an easy stance within a few months.
The big movers after the bad news which we expected were in gold, silver, miners and the US dollar. Subscribers locked in another 17.4% winning trade on this fed news while the US dollar rotated lower on Tuesday, June 18 prompting a further downside move after the bad news. It is very likely that the US dollar will move lower an attempt to retest support near 96.50. A weakening US dollar will help to support the US stock market and precious metals prices. Additionally, a weaker US dollar will help support trade, economic growth, employment, and GDP output.
We believe the US stock market is nearing upper resistance. We still believe the US stock market will eventually attempt to move about the psychological levels of 3000 for the S&P, 30,000 for the Dow and 340 SPY. This move to new all-time highs will likely result in a ”scouting party” type of price pattern where price attempts to identify new resistance, slightly above the psychological levels, then reverses back below these levels to retest support.
Our continued belief that a large pennant/flag formation is unfolding has not changed. As technical analysts, we need to wait for the new price peak form before we can identify where the upper channel of the pennant/flag formation is trending. We would urge traders to be conscious that any outside move in the stock markets as a very limited upside potential from current levels. The SPY is trading at 293 and we believe upper resistance will be found slightly above 300. Thus, we really have about a $7 or $8 move to the upside from current levels – only about 3% to 4% more room to the upside.
The transportation index paints a very clear picture of price channels, support and resistance, and expected price rotation going forward. The current price channels indicate a high target area near 5250. This upward channel range is still only 3% or 4% higher from current levels.
After this peak level is reached the market should reverse downward attempting to retest support. We believe we are very close to a market top at this point and believe that the US stock market may attempt to move above the major psychological levels – as indicated above.
There are a few items which could change our outlook currently.
A. Positive news regarding trade issues with China
B. Renewing or new central bank easing policies
C. Any type of dramatic positive economic news
D. China attempting to resolve banking issues by taking the problems and addressing them with capital/gold reserves.
Ideally, there are quite a few opportunities for the stock market rally far beyond the psychological levels. Yet with only about 14 months to go before the US presidential elections and no indication that any of our four critical components for renewed price advance are anywhere close to being accomplished, we hold to the belief that the markets will complete the Pennant/Flag formation as we have originally been stating.
We urge traders to pay attention to precious metals and the US and foreign stock markets as we enter this critical phase of the market. We believe the US stock market will continue to rotate within the channels clearly on the transportation index chart. We believe any excessive fear will become evident in the bond markets and precious metals well before the US stock market rotates lower.
In our opinion, this is not the time to buy into technology or the US stock market expecting a massive breakout to the upside. We are urging our clients to be very cautious over the next 30 to 60 days and to trade with short profit targets in mind. There are a lot of moving components throughout the global economy and we are urging our members to be very aware of the larger patterns that are setting up.
Our super cycle research has given us a very clear picture as to what to expect over the next 16 months or longer.
We have a good pulse on the major markets and can profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts. Visit our website to learn how you can see what this research is telling us.
I am going to give away and ship out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. You can upgrade to this longer-term subscription or if you are new, join one of these two plans listed below, and you will receive:
The US dollar rallied nearly half a percent off recent support near $96.50. This upside price move confirms the capital shift we have been talking about. Foreign capital is pouring into US markets and US dollar as strength in the US economy continues to dominate.
This new upside move in the US dollar has established a new lower price channel that should continue to act as price support going forward. Fibonacci price structure dictates that a higher low and a higher high price rotation may follow. We would expect some resistance just below the $98 level and if the Fed lowers the rate the dollar will likely pullback and consolidate for a few weeks to digest the news, but investors will still see the USD as the strong currency and keep buying it longer term.
It is important to understand the strength in the US dollar and the US economy should continue unless something interrupts the growth and continued out what from the US. It is very likely capital will continue to seek out the best returns and the best safety which we believe is available only in the US right now. Eventually, things may change where foreign markets become more opportunistic for investors and capital begins to shift away from the US markets. Until that happens we believe the US markets will continue to drive higher and likely push towards new all-time highs.
The strength of the US dollar is muting the upside potential in precious metals as well as the US stock market. We believe the underlying strength and opportunities resulting from the capital shift, where capital is rushing into US markets, will eventually override the strength of the US dollar. In other words, investors will continue to pour money into US stocks and into precious metals as a protection mechanism against risk while the US dollar continues to rise. If and when the US dollar does rate below the lower price channel, the US stock market may likely breakdown as well and precious metals should skyrocket higher. Until that time, we expect a moderate price advance to continue in the US stock market major and mid-cap sectors, the US dollar, and precious metals.
Gold will likely rally from the 1340 level to just below 1380 on the next leg. Then Gold will likely cause and rotate to near 1360, pause briefly, then rally to levels above 1400. We believe this rally may happen before July 12-15, 2019.
Follow our research to stay ahead of the market moves. We’ve been warning our followers for months that 2019 and 2020 will include incredible opportunities for skilled traders. We’ve also been calling these major moves very accurately. With the US elections only 15 months away, we urge all traders and investors to pay very close attention to our research and insights.
We have recently suggested that a major price may set up in late August or early September 2019. Once we get to this date or closer to this inflection point, we’ll provide more insight as to what our modeling systems are suggesting.
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Now, I have a few silver rounds here at my desk I am going to give away and ship out to anyone who joins me with a 1-year, or 2-year subscription to Wealth Trading Newsletter. You can upgrade to this longer-term subscription if you a current subscriber or join one of these two exciting offers below, and you will receive:
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Chris Vermeulen
https://thegoldandoilguy.com/wp-content/uploads/2019/06/25.png462700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-06-19 11:30:192019-06-19 11:30:19US Dollar Rallies Off Support But Is This A Top Or Bottom?
One of the biggest movers of the day on Friday was the US dollar. The US stock market appeared very weak prior to the opening bell and precious metals, especially gold, appeared to be rocketing higher. Almost right from the open, the markets washed out the fear and changed direction. The US dollar did the same thing.
This renewed strength in the US dollar continues to baffle foreign investors and foreign governments as they continue to try to support their economies and currencies against a stronger and more agile US economy and currency. Even as the US dollar strength is frustrating many investors, it is also attempting to keep a lid on traditional safe havens such as precious metals.
This further complicates many foreign nations because their gold reserves are not appreciating at the same rate that their currencies are devaluing. Couple that with capital outflows, consumer protectionism, waning economic outputs, and the need to protect local currencies to avoid populist panic, and King Dollar seems to be riding high.
A friend of ours and foreign currency trader suggested we read the article below today.
Does China have enough US dollars to survive the US trade war?
We’ve authored many articles about the US dollar over the past few months. We believe the strength in the US dollar will continue and that a support level above $92 is likely to continue to support the price for some time. That being said, the current price rotation near $96.50 provides a recent low price rotation level that could turn into future support after recent highs near $98.40 are broken.
Many times you’ve probably read our comments about a “capital shift” and how this shifting capital across the planet will be driving future investment in the US and other foreign markets. At this point in time, it’s almost like a dog chasing its tail. The more support the US dollar receives, the more pressure there is for foreign markets to support their currencies and economies. The weaker foreign economies become and foreign currencies devalue, the more demand for US dollars increases to help offset local weakness. It starting to become a vicious cycle.
We believe the defined price channel between the two magenta colored lines will continue to dominate US dollar price activity until price breaks through either the upper or lower range of this price channel. The current support near $96.50, will likely turn into a new price floor once price breaks above $99.
There are a number of factors that could ease the upward pricing pressure in the US dollar. First, increased economic output and activity in foreign markets illustrating economic growth and prosperity would likely ease the capital shift into the US stock market and US dollar. Once foreign markets begin to act as though real opportunity exists over an extended period of time, then the dominance of the US dollar may begin to weaken.
Additionally, suitable trade deals, such as we witnessed between the US and Mexico recently, will help to alleviate currency pricing pressures on foreign currencies. This strength in foreign currencies presents an opportunity for global investors to take advantage of pricing gains.
Stronger foreign currency valuations and economic output will help to ease the US dollar dominance eventually. Until that happens, as traders we need to be aware of the pricing issues related to the capital shift that is taking place, the pricing pressures on precious metals, and the likelihood that foreign investors will continue to pile into US equities while King Dollar is dominating.
Pay very close attention to foreign market weakness and news of banking issues or government bailouts of foreign banks. Much like the US credit crisis in 2008/2009, bank failures and extended credit risk exposure can lead to waterfall events. This would be our biggest fear for the global economy if foreign governments and banking institutions are not properly prepared for extended devaluation periods. If things really started to crumble overseas we could see gold and the dollar move up together, it has happened before in times of crisis.
We’ll keep you informed as we see things transpire. In the meantime, King Dollar rides high end of the sunset and foreign governments/nations will continue to attempt to support their economies and currencies. Eventually, the fear factor will push precious metals broadly higher.
We have a good pulse on the major markets and can profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts.
I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these super cycles are going to last years. These super cycles starting to take place will go into 2020 and beyond which we lay out in our new PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime
Happy Fathers Day Guys!
Chris Vermeulen
Founder of Technical Traders Ltd.
https://thegoldandoilguy.com/wp-content/uploads/2019/06/7.png404700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-06-16 17:40:182019-06-16 17:40:18King Dollar Rides Higher Creating Pressures On Foreign Economies
As we’ve been warning over the past few weeks and months, the current price rotation in the US stock market is very much related to the strength of the US Dollar and the continued Capital Shift that is taking place as trade issues and currency valuations drive investors into the US equity and debt markets as protection against risk. We talk about some of these new Super-Cycles starting and how we can take advantage of them in this new guide.
The US Dollar stalled today after a recent price decline from just above $98 to a current level near $96.60. Over the past 15+ months, the US Dollar has risen from lows near $88 to highs near $98 – an 11.2% price rally. Meanwhile, many other foreign currencies have collapsed over this same span of time.
We believe the continued Capital Shift is driving further investment in the US stock market and debt market as a way to avoid the risks of further currency valuation declines and as a means of protecting wealth. Until this currency dynamic changes, we expect the strength of the US economy and US Dollar to continue to push investors into the US equity markets.
This being said, a very interesting dynamic is starting to set up. Gold and Silver have started to move higher while Oil, Natural Gas and other commodities are pushing lower. This type of activity in the commodity markets suggests some increased fear is driving investors away from speculating on increased global economic activities and pushing capital into expectations of a market top or deeper correction.
We’ve read recently where institutional traders have started initiating heavy short positions in the US markets and we believe these investors have jumped the gun a bit. We don’t see how or where a massive US market collapse is likely given the current strength in the US Dollar and the US economy. Yes, at some point this dynamic may shift and at some point, we may see a fairly deep correction of 12% to 18%. We believe that a top may happen in August or September 2019 – after the US stock market (DOW) reaches new all-time highs above $30k.
Right now, we believe the first rotation of our expected Pennant/Flag formation is starting to set up and we look for early signs in the DOW and TRAN charts.
This TRAN chart shows price rotation near the CYAN resistance level originating from the late April peak and spanning the early May price high. We believe this resistance level may play a key role in understanding how and when the next upside price leg begins to advance. We expect a downside price rotation to take place pushing the TRAN towards the $9600 level over the next few days/weeks.
This YM chart highlights a similar price pattern, but clearly illustrates one key difference – the New Price High. This fundamental element of Fibonacci price theory is that any attempt to break a past critical price high which results in a “new price high” designates the current trend as Bullish. Within Fibonacci price theory, price is always seeking to establish new price highs or new price lows – AT ALL TIMES. Therefore, a new price high or new price low is very significant.
The TRAN chart may continue to consolidate below the CYAN resistance level whereas the YM chart may attempt to push higher, with a bullish bias, setting up a Pennant/Flag formation as we expect. This would indicate that even though economic and transportation expectations are waning, the bullish bias in the YM suggests the Capital Shift factor is still pushing the US stock market upward.
Pay close attention to that big blue ellipse near the top of the chart. We drew that in place many months ago as an indicator of where we believe critical resistance is should the markets attempt to push higher and attempt new all-time highs.
We still believe this resistance is valid and as price rotates into the Pennant/Flag formation, we’ll extend this resistance forward – carrying the same slope and angle forward. If the YM is going to attempt a move to above $30k before our expected August/September 2019 top setup, it will have to push well above this resistance zone to accomplish this move.
Watch Gold and Silver over the next 3 to 4 weeks as any perceived weakness will push the precious metals higher still. We believe Gold will reach $1450 this summer and possibly higher before August as smart money rotates into the safe havens in anticipation of a bear market.
If you wanna become a technical trader with use and trade ETFs then be sure to join our Wealth Building Newsletter today and get our daily video analysis and swing trade alerts. In the past 17 months, our newsletter trade signals have generated 91% ROI for its subscribers, be sure to join before the markets start making new big moves and profit with us!
Chris Vermeulen
www.TheTechnicalTraders.com
https://thegoldandoilguy.com/wp-content/uploads/2019/06/29.png387700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-06-13 11:38:152019-06-13 11:38:15US Stock Market Setting Up A Pennant Formation
Closing out the first week in June 2019, the US stock market rallied hard from recent lows and prompted many traders/investors to rethink their future plans. At the same time, Gold and Silver began a decent price rally of their own while Oil found support just above $50. It certainly has been an interesting week for traders. One that was full of incredible opportunity as many symbols rotated 6 to 12% or more over the past 10+ days.
The fact that Oil is finding support above $50 while Gold and Silver continue to rally suggests that fear may be entering the metals market while Oil may have found a temporary price bottom near $50 to $51. Weakness in the US Dollar is also helping both Oil and Metals to push higher. Our recent research suggests that the US Dollar will find support near $95 indicates the US Dollar may fall a bit further – pushing Oil and Metals a bit higher.
The strength in the US stock market near the end of the week suggests fear of any US collapse or future economic concerns appears to be abated. It is very unlikely the US major indexes would rally as they have on any extreme fear of any major US calamity or economic concerns. A slightly weakening US Dollar and moderately strong US economic data continues to suggest the US stock market may continue to be the repository of funds for foreign investors for many years to come – or until something dramatic changes in the US.
It is rather simple to understand the capital process that is at work in the global economy at the moment; until foreign market valuations and expectations appear to be opportunistic for future returns, the US Dollar and the US stock market are the most likely targets for foreign investment and safety. Weakening currencies, weakening global economies and weakening commodity prices will push capital away from foreign markets and into safety. Safety will be found in the US markets, precious metals and possibly Crypto currencies. Anything that avoids deflationary risks and credit/debt risks.
This YM Weekly chart highlighting our Fibonacci price modeling system shows how dramatic the upside price reversal was by the end of last week. The closing candles created an Engulfing Bullish candlestick pattern which is typically quite bullish. The fact that price closed above the GREEN Fibonacci trigger level is further indication that a renewed price rally may begin soon. Support near $24,000 appears to be quite strong and any further downside price risk must first break this level. As long as support holds and price continues an upside bias, there is a very strong potential for a move to above $28,000 in the works.
This NQ chart highlights a similar price pattern and suggests the NQ needs to climb above $7600 before a true rally can begin. Ultimately, the upside targets for this move are near $8500 or higher based on current price rotation. Support near $6800 is critical – so price must stay above this level for any future rally to continue.
We authored a VIX/Volatility article just a few days ago that highlighted our believe that the VIX would trade lower, within a sideways price channel till near the end of July or August 2019 – then begin another VIX Spike move upward. This coincides with the current research we are seeing where the US stock market will likely continue to push higher, very possibly setting new all-time highs again, before any real risk of any downside price collapse happens.
Follow our research and don’t miss these opportunities. We’ve been warning our followers for months that 2019 and 2020 are going to be incredible years for skilled traders. These recent 10 to 20% moves in Gold, Silver, Oil and many ETFs are just the beginning. Our research team and trading team are ready to help you find and execute for better success.
Chris Vermeulen
www.TheTechnicalTraders.com
https://thegoldandoilguy.com/wp-content/uploads/2019/06/21.png387700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-06-10 10:26:172019-06-10 10:26:17US Markets Rally Hard – Could Another Big Upside Leg Begin?
The US Memorial Day weekend is set up to become a very interesting time for investors. The EU voting is complete and the change in EU leadership may move the markets a bit. China appears to be playing a waiting game – attempting to hold the US/Trump at bay until after the 2020 US elections. This week is certain to be very interesting for traders/investors.
The European stocks moved higher in trading on Monday as the relief from the EU election event and support for auto shares pushed the markets higher. The transition in the EU over the next few months will solidify into a political and social agenda. The EU leadership must acknowledge these future objectives of all parties in order to maintain some level of calm. It is evident that many EU nations are relatively satisfied with the current leadership while others are transitioning into more centrist leadership. The next 4+ years will be full of further transition in the EU.
China is another global issue that is relatively unsettled. We’ve been doing some research with regards to China and the potential future political and economic pathways that may become evident in the near-term future. Our biggest concern is that China has been inflating their economic levels for decades and the true scope of the Chinese economy may be much weaker than everyone expects. If our suspicions are correct and China has been inflating economic levels for many years, then the transition to a consumer/services-driven economy may be dramatically over-inflated and the US/China trade issues could be biting much harder than the Chinese want to admit.
The “Sell in May and go away” market saying may become absolute truth in 2019. Our expectations are still suggesting that an attempt at new market highs may take place before August 2019, but the current market rotation (lower) is setting up a very strong potential for further downside price action at the moment. Our proprietary Fibonacci price modeling system is suggesting the $7294 level in the NQ is key support. Below this level, the NQ could break much lower and potentially target $6850 or lower.
The YM is setting up a similar price pattern with resistance near 25,840. We believe this resistance will push prices lower as we move further into early June. The potential for some type of surprise economic data or Fed/Global market move after this weekend is somewhat higher than expected. There is a lot of shifting taking place throughout the globe and we believe this turbulence will reflect in the US market soon enough.
As of right now, our expectations are that a brief upside price rally will take place over the next 4~7+ days before a continued downside price trend may become evident. Pay attention to the news cycles for key elements that could drive the US stock market lower. We will continue to update you with regards to our proprietary research and expectations. The next 7+ days will likely be nothing but sideways price rotation within a Pennant/Flag formation.
Read our research to understand how this setup coincides with the GOLD price setup and why it is important to understand why July 2019 is so important. Please take a minute to review these recent research posts that focus more on the US Dollar and Gold, and also the July turning point for US Stocks.
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We continue to see money flow into the safe-haven assets like the Utility sector, bonds, and most importantly precious metals. I anticipated this and our XLU utilities ETF taken with members for 4.4% already, and our VIX ETF trade we closed for a 25% last week.
For May I am going to give away and ship out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. You can upgrade to this longer-term subscription or if you are new, join one of these two plans listed below, and you will receive:
https://thegoldandoilguy.com/wp-content/uploads/2019/05/27.png368700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-05-27 14:58:242019-05-27 14:58:24US Memorial Day Weekend Market Analysis
Chris Vermeulen joined us today. He believes that the stock market is topping out if it hasn’t already. This will lead to increased volatility and a move back to safe haven assets, i.e. gold. He believes that oil will break down briefly into the ’50s and then come roaring back shortly thereafter. The bigger and faster the decline, the fast the bounce back. Interest rates are headed lower.
The incredible strength of the US Dollar over the past 12+ months has put downward pricing pressure on Gold and Silver. I believe this downward pricing pressure could be muting any upside price advanced in Gold and Silver by as much as 20% to 30% or more.
The US Dollar has turned into the global “safe-haven” for international investors and foreign governments. Over the past 6 to 12 months, or more, the US Dollar has been the only fiat currency to see any strength and upward trend. All the other major global currency levels have fallen – some dramatically lower.
The EUR, GBP, AUD, CAD, and CHF have all fallen sharply over the past 6 to 12 months as the strength of the US Dollar and US Economy continued to surprise many. We’ve been calling this a “capital shift” that started back in 2015~2016 – when the 2016 US Election cycle began and China began to implement capital controls. At the same time, foreign nations such as Brazil and Venezuela began to shift into an economic abyss while the UK dealt with BREXIT negotiations. All of these external factors created an environment where the US Dollar became a global safe-haven for global investors – all of which were seeking US equities and US Dollars to hedge weakening foreign currencies and weak foreign stock market performance.
I think that the US Dollar strength, in combination with the continued foreign Gold acquisitions has amounted to a resolved “reversion” in Gold prices that could reflect a 10% to 20% price anomaly. In other words, the strength of the US Dollar has muted the advancing price of Gold by our estimates of 2x to 2.5x the strength of the US Dollar. Over the past 12 months, the US Dollar rallied from 89.42 (April 2018) to 97.92 (May 2019: current price). This reflects a 9.60% increase in the value of the US Dollar.
If my research is correct, the price of Gold should have rallied by about 18% to 26% from the April 2018 levels IF the US Dollar had not appreciated in value as it has. Therefore, the true price of Gold should be somewhere near $1600 (18% above April 2018 levels) to $1700 (26% above April 2018 levels) if we attempted to eliminate the “reversion effect” of the US Dollar strength.
We come to this conclusion by statistically analyzing the US Dollar strength after April 2018 and how Gold reacted to this strength – by falling over 12.5% from near $1350 to a level near $1170. That range of time reflected an 8% price advance in the US Dollar. Thus, a ratio of 1.5 to 1 has clearly been established within that move. More recently, from August 2018 till now, the US Dollar has rallied 1.47% while the price of Gold has rallied 8.87%. The current price of Gold is -5.60% below the April 2018 price level.
If we were to assume that the rally in the US Dollar deflated the price appreciation of Gold by nearly equal ratios, then we take the April 2018 price of Gold ($1350) and add the related price variances of Gold over this span (essentially reverting the price of Gold to April 2018 US Dollar levels : $1350 * 1.27) and we end up with $1714.50. This reflects a greater than 30% price anomaly from the current price of Gold.
We need to ask ourselves one simple question, what would it take for Precious Metals and the global stock markets to revert back to these expected price levels? Would it be a move away from the US Dollar? Would it be some shift in foreign currency valuations? Would it be a combination of factors that drive greater fear into the markets and reflect a US Dollar valuation decline? In the second part of this article, I will explore some possibilities and explain why I believe we are just days or weeks away from finding out exactly what will cause this price anomaly to revert along with my proprietary gold price cycle forecast.
I just highlighted the strength of the US Dollar in comparison to other foreign currencies and suggested this US Dollar strength may have created a “price anomaly” setup in Precious Metals – specifically Gold. I believe a very unique setup is happening in the global markets right now and that the price of Gold is substantially undervalued compared to risks that are present throughout the global economies. I believe the strength of the US Dollar has muted the upside potential of Gold by at least 20% to 30% over the past 12+ months and I believe a shift is taking place where Gold is starting to break these pricing constraints.
If the analysis is correct, I believe traders only have about 3~6+ weeks before we’ll find out why and what will cause this price anomaly to revert back to what I believe is “price normalcy”. The strength of the US Dollar, as well as the continued global “capital shift” where foreign investors are piling into the US stock market and US Dollar related investments, have continued to put incredible pricing pressures on Precious Metals. We believe this “shift” may be about to revert back to some levels of normalcy in term of Precious Metals pricing.
I believe a major Pennant/Flag formation is setting up in Gold where this price anomaly event will be resolved. This type of price anomaly reset, or reversion will prompt a massive upside price advance in Gold and Silver that will attempt to restore proper pricing levels to the Precious Metals commodities. I believe we are just weeks away from the completion of this Pennant/Flag apex/breakout event and believe the upside price targets identified align with a series of key events that are likely to unfold over the Summer months of 2019. Take a few minutes to read the recent three-part research post regarding these events and how they relate to the global stock/commodity markets here.
Our predictive modeling systems have been warning that a price advance in Gold and Silver will take place between April/May of 2019 and Aug/Sept or 2019. We are calling this the “initial upside price leg” because we believe this upside price move will be just the beginning of a much larger move higher for Precious Metals. We’ve highlighted some of the biggest concerns we currently have related to the global stock market price appreciation levels and the concerns related to the US Presidential Election cycle in precious articles – Please read them here :
We believe it is imperative to alert all investors/traders of this event and to attempt to allow all investors/traders to plan for what may become one of the biggest global stock market swings in recent history as well as one of the biggest moves in Precious Metals in history.
My proprietary cycle analysis and trade signals are suggesting a mild price recovery in Gold will prompt moderate upside pricing pressure over the next 10~20+ days. This aligns perfectly with our Pennant/Flag formation, see the previous chart. It would be expected that Gold prices would form a moderate price support level near $1270 before moving back up to the upper Pennant price channel, near $1295. Then, price should set up the “Apex Breakout” move – which will likely be a “washout-low” price rotation (somewhere near or below $1270) with a very quick reversal to the upside – breaking $1330 and rallying much higher. This type of rotation is very common and often prompts traders to jump into short positions on the “washout-low” formation before getting clobbered on the reversal/rally. Be prepared.
Lastly, we want to alert everyone to a chart we’ve been following that could become a determining factor for the future of the global stock market levels, the US Dollar and Precious Metals. The one thing we don’t want to see is a massive decline in yield in the 2 Year Treasuries. This would indicate failed growth expectations throughout the globe and, in particular, reflect concerns that the US markets could contract/decline in-line with further global market devaluations.
We’ve already been trying to warn investors that the US Presidential Election cycle will likely create a stalling price pattern in the US stock market. We’ve been warning, for the past 18 months, that Gold is setting up a massive bottom/breakout formation. We’ve recently highlighted the global concerns (Europe, China, US, and others) that may combine to create something like a “perfect storm” for currencies and the global equities markets. If that translates into “yield weakness” in the US Treasuries, think about how that would translate into the Precious Metals “reversion” that we are suggesting is only a few weeks away?
Chart courtesy of www.crescat.net
We strongly urge investors to pay very close attention to our research and prepare for this event. Yes, the Capital Shift event is still taking place and as long as nothing disrupts this shift, capital will continue to flow into the US Dollar and US Equities. Our concern is that the charts are telling us we are very near to the end of this event cycle and we are alerting all of our followers so they can prepare for this move. It may start out mildly – it may not. We do know that our predictive modeling systems are suggesting that July/August 2019 are on our radar for a major price rotation/event.
UNIQUE OPPORTUNITY
First, we typically see stocks sell-off and as the old saying goes, “Sell in May and Go Away!” which is what has been happening.
So what does this mean? It means we should start to see money flow into the safe-haven assets like the Utility sector, bonds, and most importantly precious metals. I anticipated this and our XLU utilities ETF taken with members has already hit our first profit target, and our VIX ETF trade also hit out 15% profit target and we the balance of it is still up 25% as of yesterday.
Second, my birthday was this month, and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.
For May I am going to give away and ship out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. You can upgrade to this longer-term subscription or if you are new, join one of these two plans listed below, and you will receive:
1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)
2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)
I only have 25 silver rounds I’m giving away
so upgrade or join now before its too late!
Smart traders are already asking themselves “where is the bottom for this move”. They’ve likely been through these types of rotations in market price before and understand the fundamentals of the US economy are strong enough to support further upside price activity in the near future. The current US/China trade worries could result in a pricing disruption of 4 to 8%, seen as rotation, yet the US Fed is continuing to leave rates unchanged and most US economic numbers are still posting strong levels.
So, smart traders want to know where the bottom in the market is likely to be found and when they should start to accumulate new long positions – which is understandable. We’re here to help.
Our proprietary Fibonacci price modeling system is one of the unique modeling tools we use to hone into any market move. The reason for this is because it shows us so much data that we can “read into” our analysis/research. The other reason is that it is an “adaptive learning” model – which means it continues to learn from price data and adapt its analysis of that data.
Let’s start with the Weekly YM chart. The GREEN highlighted box on this chart shows where the past two Bullish Fibonacci price trigger levels were generated. These, obviously, become key support levels going forward. The narrow ORANGE box near the current peak is the resistance channel we highlighted many weeks ago that suggested a volatility rotation peak may be setting up. We have also drawn an oblique/circle on the chart in BLUE that highlights upside Fibonacci target price levels.
It is our opinion that a further downside leg, possibly to levels below $25,000, are possible as this Shake-Out continues and as the global markets continue to revalue expectations. We are watching the currencies very closely as the Chinese Yuan has devalued extensively over the past few days. This US Dollar strength will keep metals fairly flat while prompting some extra stability in the US stock market over time.
This next chart, the NQ Weekly, shows a similar chart format to that of the YM. Clear resistance can be seen near the recent highs and support is found near the $6600 level from previous Fibonacci Bullish Price Trigger Levels. The NQ, being very heavily weighted in Technology and Internet stocks, may have the ability to fall the furthest within this price rotation – possibly as much as -700 to -800 pts before finding support. Currently, a support level near $7400 is the first level we are watching. If the NQ breaks below this level, then we could see a much bigger move to the downside unfold fairly quickly.
Lastly, the Transportation Index (TRAN) is showing us that the downside price move may have already reached a level that may prompt intermediate price support – or a potential base formation. The $10,400 to $10,500 level, which was already reached, appears to be the initial support level for the TRAN. It would make sense that the TRAN may begin to base near this level over the next few days/weeks while the US stock market attempts to hammer out a bottom.
Ultimately, the $10,000 level has proven to be very strong historical support for the TRAN. So any breakdown in this index would immediately prompt a target level of $10,000 for the next support level. Again, pay attention to the US Dollar and Gold as this movement continues. Any real fear will translate into a weaker US Dollar and increasing prices in precious metals.
In closing, we believe the early signs of a potential price bottom are setting up right now. This may not be the ultimate bottom, but the clear support level in the TRAN is a very good sign that the markets are setting up a support base that may prompt some sideways trading over the next few weeks as the market continues to digest all this global trade news. A deeper “washout-low” price formation may set up in the INDU or the NQ over the next few days which means we may see a deeper price rotation before the downtrend actually ends.
Right now, pay attention to our continued research and we’ll help you find the bottom when it forms. Our current expectations are for a continued downside price move that will establish a washout-low formation over the next 3 to 10 trading days. We’re not out of the woods yet, but we are starting to see the early signs of price support – which means a bottom may not be too far off.
UNIQUE OPPORTUNITY ONLY IN MAY
On May 1st we talked about the old saying goes, “Sell in May and Go Away!” and that is excactly what is happening now right on queue. In fact, we closed out our SDS position today for a quick 3.9% profit and our other new trade started today is up already 10%.
Second, my birthday is only a few days away and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.
Right now I am going to give away and shipping out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. I only have 13 left as they are going fast so be sure to upgrade your membership to a longer-term subscription or if you are new, join one of these two plans, and you will receive:
1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)
2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)
I only have 13 more silver rounds I’m giving away
so upgrade or join now before its too late!
https://thegoldandoilguy.com/wp-content/uploads/2019/05/chart5.jpg14602053adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-05-10 11:02:112019-05-10 11:02:11The Shake-Out Continues – Where Is The Bottom?
