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US Markets “Roll Over” On Earnings and Economic Data At Channel Highs

As we near the end of October 2019, a very interesting price setup is taking place across many of the US market sectors recently.  We only have a total of about seven trading days left in October 2019 and the Financial Sector ETF is rolling over with what appears to be an Engulfing Bearish price pattern near price channel highs.  Additionally, the tech-heavy NASDAQ (NQ) has been mostly weaker compared to the ES and YM.

On September 30, 2019, we published this research post that highlighted why our predictive modeling systems suggested the S&P 500 and NASDAQ market sectors would become much more volatile than the Dow Jones Industrials: MODELING SUGGESTS BROAD MARKET ROTATION IN THE NQ & ES.

We believe this research is still very valid given the current price rotation near these price channel highs and given the potential that the Dow Jones stocks may become relatively stronger alternatives than the S&P 500 and NASDAQ sector stocks.

We believe a downside price rotation is setting up in the US and global stock markets and we believe the potential for large price moves exists in at-risk sectors like the Financials, Technology, Biotech, Energy, Services and other sectors that do not directly relate to what we feel are “essential consumer staples”.  The Dow Jones Industrials Index is full of companies that traditionally perform better in a consumer-based economic contraction for investors – which is why we believe the YM will present a very unique opportunity going forward for skilled traders.

FAS DAILY CHART, THE DIREXION FINANCIAL BULL ETF

This first FAS Daily Chart, the Direxion Financial BULL ETF highlights the price channel in YELLOW and highlights the recent price rotation near the $80 price level which constitutes a potential “new lower high” price rotation.  Our longer-term cycle analysis tools predict a downside price move initiating over the next 7 to 10 trading days.  We believe this new downside price trend could push price levels below the lower price channel level if this move is associated with external news or economic data that panics the markets.

IWM, RUSSELL 2000 ETF, DAILY CHART

This IWM, Russell 2000 ETF, Daily chart highlights an “island Doji top” formation that is setting up as a very unique price formation.  When Doji type candles form with a gap above the previous bars, this is often considered an “island top” type of formation.  Doji candles represent indecision and uncertainty.  They are often found near-critical top and bottom formation.  In this current formation, we believe the island top formation is a very clear warning that a major price top is setting up in the Mid-Caps which would also be considered a “new failed price high” formation.  Ultimately, the $144.50 level becomes critical support if price falls.

SSO, PROSHARES ULTRA S&P 500 ETF, DAILY CHART

This SSO, ProShares Ultra S&P 500 ETF, Daily chart highlights a similar price range setup.  Notice how all of these sectors have rotated into these ranges over the past few months – very similar to what happened in 2015/16 prior to the 2016 elections.  We believe the uncertainty related to global trade, global economics and the US political “circus” will continue to put pricing pressure on the US stock market and global markets.  We believe the inability to achieve “new price highs” throughout many sectors is a very clear warning that a larger downside price move, a type of price reversion, maybe setting up and we have been trying to warn our followers to be very cautious in taking unnecessary risks at this time while trading.

If our cycle research and predictive modeling systems are correct, we could be setting up for a downside price move that may act as a “true price exploration/reversion event” and potentially target levels that may be below the June 2019 lows.  If this move is associated with some external news event or global crisis event, we may see prices fall to levels below the December 2018 low price levels.

Overall, we urge all skilled technical traders to stay very cautious over the next few months.  Target solid trades that present very clear opportunities and properly position your trades to attempt to mitigate unknown risks.  This is not the time to go “all-in” on anything as the markets are far more capable of being irrational than you are likely to be able to handle the risks that are associated with a crazy market move.

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 urge you visit my ETF Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Bar!

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site to learn how to take advantage of our members-only research and trading signals.

Black Monday 1987 vs 2019 – Part II

Our research team has been attempting to answer the question that seems to be on everyone’s minds right now – are we setting up another Black Monday type of event in the global markets and what should traders/investors know before the event potentially takes place.  Our research team has spent the past few weeks trying to better understand the global economic events that took place 8 to 20+ years before the Black Monday event happened and have been particularly interested in the 10+ years just before the Black Monday event.  Additionally, we’ll focus on the recovery event that took place after the Black Monday collapse completed.

In Part I of this article, we attempted to highlight some of the similarities of today’s global economic world to the scenario in the early 1980s.  Many of you may not be old enough to remember the 1960s or 1970s, but at least one individual on our research team is old enough and was actively trading in 1985.  His interpretation of the economic events prior to the 1987 Black Monday collapse and how they may be similar to today highlight some very interesting facets for our readers.

The late 1970s was a period where most Americans worked hard, tried to play by the rules and struggled to attempt to get ahead in a world that seemed to be a little out of order.  The 1960s was a period of awakening in America where music, culture, and people shifted away from the WWII era and post-WWII era thinking.  Vietnam, Korea and a host of other issues, as well as rising US interest rates, presented very real problems for many Americans.  By the time the US entered the 1980s, Americans had already experienced the assassination of John F. Kennedy, the race to the moon, multiple wars, victories and defeats, a cultural shift to near the extremes and another shift moving our culture back closer to center, Oil/energy crisis events, a moderate malaise of economic prosperity, and continually higher US interest rates.  Then the US elected Ronald Reagan.

It seemed to everyone that Ronald Reagan had unlocked secrets to the American opportunity that had been somewhat lost over the previous few decades.  In reality, the first 2 to 3 years of the Reagan Presidency resulted in very mixed economic results – almost identical to President Carter’s.  The biggest identifying factor that our research team found was that the US Federal Reserve altered its rate policy in the early Reagan years from a “raising stance” to a “declining stance”.  Throughout Carter’s term, the FFR rate change averaged +2.08.  Throughout the first four years under Reagan’s term, the FFR rate change averaged -0.7825.  By 1984, the US Federal Reserve had lowered rates, twice, by an average of over 7% after raising rates every year since 1977.

(source: https://einvestingforbeginners.com/us-gdp-growth-history/)

Is this similar to what is happening today?  The US Federal Reserve began raising rates in December 2015 and continued to raise rates until August 2019 – nearly 3.7 years of rate increases after nearly a decade of near-zero interest rates prior to 2016.

Another interesting facet is what our research team calls the “capital shift” that has taken place since just before 2015 – where foreign capital has poured into the US stock market and asset markets for safety, security, and returns.  Prior to the point where capital controls were instigated in China (in 2015), a moderate capital shift event was already taking place.  Once China installed these new capital controls, attempting to prevent capital from fleeing their local economy, a broader shift took place where the US markets began to rally and where foreign capital was more actively attracted to the US stock/asset markets because of the strength of the US Dollar and the continued rally in the US stock market.  This is similar to what happened in 1983 through 1987.

These comparison charts of the 1980s and the current 8+ years of the S&P 500 charts highlight some very interesting facets of both peaks.

_  Support set up nearly 24 months prior to the collapse in 1987. This support channel became the ultimate price channel level to break as Black Monday hit.

_  Price was able to rally above the upper price channel three times before the breakdown event began.  This upper price channel mirrors the lower price channel slope and is anchored near the tops after the initial support bottom is setup.

_  The final rally attempt before Black Monday initiated near early January 1987 – nearly 9 months before the peak and 10 months before the price breakdown began.

Within the current S&P 500 chart, some slight variations are present.

_  Support set up nearly 44 months prior to the peak in 2019. This support channel is the ultimate price channel level that acts as ultimate support for the price trend.

_  Price has been able to rally above the upper price channel four times since the ultimate support level was set up in 2016

_  The most recent rally attempt initiated near early January 2019 and has lasted nearly 9 months before the current peak.  As of today, we are nearly a full 10 months into this new price rally.

Although there are subtle differences in the price setup, rotation, and trend lengths, we can certainly see a similarity in between these two chart and we believe the recent price advance in the US stock market, along with the fact that capital has continued to pour into the US markets over the past 3+ years, sets up a similar type of event where current price levels, valuation, and risks may have been under-weighted dramatically.

Could another Black Monday type of event happen in today’s global markets?  Certainly, it could.  All it would take is for global traders/investors to suddenly realize there is a new degree of risk or excessive price valuation that currently exists in the markets and to begin liquidating assets in a mass event.

What would it take for something like this to happen?  Quite possibly, China or Hong Kong could, again, present a very real risk for the global markets if a threat to the lower price support channel becomes threatened.  A collapse in true value would relate as a potential “true price exploration” event (a reversion event) where global traders may attempt to retest substantial historical support.

Our belief is that true historical support currently resides near 1860 on the S&P 500 – which aligns with the same type of price reversion that occurred in 1987.

Time will tell if we are currently set up for another Black Monday event.  In fact, we may know as early as Monday, October, 21.  Until the lower support channel is seriously threatened by any new downside price move, the chances of this type of event happening are fairly low.  As you are well aware.. things can change very quickly.  Pay attention to near originating out of Hong Kong, China or Asia over the weekends as any type of real risk could spill over into the UK and US markets very early on Mondays.

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 urge you visit my ETF Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Today to Get a Free 1oz Silver Bar with a subscription – Offer Ends This Week!

Chris Vermeulen
www.TheTechnicalTraders.com

Black Hole In Global Banking Is Being Exposed

Almost a decade ago, the global financial crisis of 2008-09 exposed billions of people to the risks within the global financial/banking sector.  With all this money flowing around the globe and with banks able to facilitate greater and more diverse risk/derivatives investments, the central banks and insurance companies are left with an incredible “black hole” of exposed risk that is almost impossible to quantify.  When we add the shadow/gray market banking risks into this equation and begin to understand the complexity of commodity-backed or Purchase Order backed financing that has become commonplace throughout the planet, we have to ask ourselves one question – “what would it take for these risks to become another crisis?”

Deutsche Bank Massive Exposure Could Cripple Europe

A recent article we found on ZeroHedge highlights the risk exposure from Deutsche Bank and how that derivatives/banking risk could spill over into another global financial market crisis again.

The ZeroHedge article stated that Deutsche Bank has $49 trillion dollars in derivatives exposure, making it the single greatest danger to Europe and global financial institutions imaginable at this time.

This additional article from TheStreet, from May 2016, highlights the continued risks associated with the global financial system and the level of derivatives risk that is inherent in the system.

Here is a quote from that article that attempts to rationalize debt exposure…

”Let’s take the latest data in Deutsche Bank’s annual report for 2015. It shows that the bank’s total, notional exposure to derivatives transactions is 41.9 trillion euros ($46.8 trillion). While that’s more than 35% lower than its 2013 exposure, it still looks huge.

However, after offsetting the positive and negative exposures against each other, the net exposure is a much more manageable 18.2 billion euros ($20.3 billion).”

The data that we’ve been able to find regarding US exposure to the global derivatives market is rather limited in scope.  The Federal Reserve Bank of St. Louis provides some data, but we believe this data fails to include shadow/gray banking risks.  Traders must be aware of the fact that the global economy has been running on ether after the 2009 market collapse.  Global central banks have poured capital into the markets and foreign economies have consumed vast amounts of easy-money capital to run up huge debt levels while creating massive shadow/gray level financial systems.

In our opinion, the current global banking situation is far more fragile now than it was 10 years ago. The US is in a far better position to handle risks and exposure to risks than it was in 2008-09 and the real issue before us is the level of unknown risks that are a complete black hole in the foreign markets.

Ray Dalio Says Gold Is the Best Asset During Global Financial Reset And Eric Sprott Likes Gold Also.

A recent article by Ray Dalio, he stated gold is the asset in which we should all be accumulating as it will be a top performer globally when things start to fall apart. On May 31st Eric Sprott talked about my gold forecast in detail. Since then I have accumulated more gold and silver from Eric Sprott’s company https://www.SprottMoney.com/ and you should too.


Eric Sprott Gold & Silver

Federal Reserve Bank Data Is A Warning Sign

Ok, now take a look at these graphs from the Federal Reserve Bank of St. Louis to see the data that is currently being reported.

Net US Acquisitions of non-derivatives assets have been relatively tame over the past 6+ years.  We can see from this chart the continued acquisition of assets from 2002 through 2007-08 – just before the credit crisis event.  Then, we can see how dramatically the assets were dumped between 2007 and 2009.  We’re not seeing that type of setup or event play out currently in the US.

This next chart highlights the US financial derivatives net position and we can see the peak in 2008-09 and the dramatic deleveraging that has taken place over the past 8+ years.  This chart shows the US financial derivatives levels are less than 25% of the levels from the start of 2008. ($31B vs $125B).

This last chart highlights the fact that US investors and institutions have been deleveraging from derivatives recently – as shown by the net negative transactions data on this chart.  This suggests that investors are worried about the future and have been attempting to remove risk from their investments since the peak in early 2018.  Notice similar net transaction declines in 2014-15 and 2009-10.

We believe the dips in these assets are related to US Quantitative Easing actions and investor concerns regarding the elimination of easy money policies.  We will take a look at when and how these correlations to risk aversion and QE actually take place in Part II.

In the second part of this article, we’ll explore how the US economy, US Fed and global banking sector could be complicating this derivative risk exposure and how traders need to prepare for this event – if it takes place as we suspect.

If you want to see 5 other crucial warning signs about the US markets and global economic downturn just take a look at this short video and charts.

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here.

I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused mainly on the SP 500 index and the gold miners index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here.

On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis.

More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

On June 17th I showed my chart of the transportation index forming a double top formation. It’s known that the transportation index leads the broad stock market and if the transports are breaking down then we must expect the bear market is close. I then went on to talk about the precious metals breakout with silver and silver miners leading the way. Gold miners broke out as well while gold continued to hold its bullish formation. See Transportation index double top.

CONCLUDING THOUGHTS:

In short, you should be starting to get a feel of where stocks are headed along with precious metals for the next 8-24 months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter.

This bear market has been a long time coming, but finally, almost all the signs are showing that it’s about to start. As a technical analyst since 1997 having lost a fortune and made fortunes from bull and bear markets I have a good understanding of how to best attack the market during its various stages.

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.

Join me with a 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis.

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 starting to present themselves will be life-changing if handled properly.

FREE GOLD OR SILVER WITH MEMBERSHIP!

Kill two birds with one stone and subscribe for two years to get your FREE PRECIOUS METAL and get enough trades to profit through the next metals bull market and financial crisis!

Chris Vermeulen – www.TheTechnicalTraders.com

Financial Crisis Bear Market Is Scary Close

Everyone knows something bad is brewing not just in the USA but globally within the financial systems. Most countries are bankrupt, and almost all currencies have been losing value for the past year. Everyone is playing the game of musical chairs and getting creative with how they borrow, lend, create, and steal money in hopes the world does not catch on to just how corrupt and bad things really are.

It’s just a matter of time before we see another financial market meltdown and what I show you here today gives you an idea of just how close we could be to a market collapse.

The financial markets rarely repeat the same type of crisis, but most crisis’ cause the stock market to sell off and crash in the same way. Human nature and emotions do not change, and because traders and investors drive the price action of stocks we are able to profit from bear markets.

In fact, bear markets can be life-changing in a good way for those who know how to trade these market conditions. Because stocks fall 3-7 times faster than they rise, you can generate the same amount of returns someone who invested at the beginning of a 10-year bull market and sold at the top, but you can do this in 8-12 months because of how quickly prices fall.

Three Leading Sectors To Watch
Transports, Industrials, Small-Cap Stocks

The transportation sector refers to the transportation of goods or customers using major and regional airlines, railroads, shipping firms, ocean freight haulers, trucking, etc… It is these companies that see a slow down in the economy before almost everyone else as less shipping is required when sales slow or the economy is tightening using less food, fuel, or buying things in general.

The second sector is industrials. This works much like the transportation sector.

Last but not least is the Russell 2ooo small-cap stock index. These small and volatile stocks are the first to show signs that traders and investors are tightening their risk-reward ratios because they feel the stock market is overpriced and that a bear market could be near, and the last type of stock you want to own during a bear market are small-cap stocks.

2016 – 2019 Custom Chart of Three Sectors
Trans (IYT) + Industrials (XLI) + Russell (IWM) / 3

The chart below shows the recent and current day price action of these three leading sectors. Notice the long multi-year rally into the high of 2018 followed by the sharp distribution selling that warns the big money players unloaded their positions in these leading and leveraged sectors.

The 2019 rally has been strong but when you look at the big picture, the price is far from its 2018 highs and the price pattern is bearish (it points to lower prices) from a technical analysis standpoint.


2004 – 2008 Custom Chart of Three Sectors

The last bull market looks nearly identical in terms of the run-up in price, the top in 2007, and the distribution sell-off in these sectors. The 2008 rally was strong as well, but far from the 2007 highs as well.

What I want you to notice is the fact that these charts have moved nearly the same. Just like I mentioned earlier how bear markets price patterns repeat, so do bull market price patterns. The 2009 price action and 2019 price action are nearly identical and when you see the next chart you will see why the financial market is scary close to the next crisis/bear market.


2009 Market Crash Custom Chart
Trans (IYT) + Industrials (XLI) + Russell (IWM) / 3

Bases on the 2008 weekly chart below the US stock market could be literally 2-6 weeks away from collapsing. What makes this even scarier is that the market liquidity is the worst its been in my 23 years of trading meaning when the selling starts we will likely see some sort of flash crash as we saw in 2008, 2015, and 2018. Price drops so quickly by the time you figure out what you want to do and get your money properly positioned most of the move is already completed.


Eye Opening Gold Miners Charts and Analysis from 2008-09

There are several other really intriguing things happening that further confirm this analysis like how gold miners are outperforming US stocks, the gold : silver ratio above 85, the presidential cycle, the decade cycle and many more. It was actually all these other things that made me review these leading sectors here today. I’ll touch on these other topics in the next few articles later this week

The chart below shows you what the stock market and gold miners did just before the bull market topped and what they did after. Be aware, if you’re a gold bug you may not like this chart but you can’t argue with the truth of what miners did during the bear market and other bear markets for that matter.

See my updated chart showing where gold miners and the stock market is as of today within this cyclehttps://www.thetechnicaltraders.com/next-bull-and-bear-markets-are-now-set-up/


Concluding Thoughts:

In short, the bear market has been a long time coming, but finally, almost all the signs are showing that it’s about to start. As a technical analyst since 1997 having lost a fortune and making a fortune from bull and bear markets I have a good understanding of how to best attack the market during its various stages. Stay Tuned for Part II 

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.

Join me with a 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a 1oz Silver Round or Gold Bar Shipped To You Free.

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 AWAY – FREE GOLD & SILVER WITH MEMBERSHIPS

So kill two birds with one stone and subscribe for two years to get your
FREE PRECIOUS METAL and get enough trades to profit through the
next metals bull market and financial crisis!

Chris Vermeulen – www.TheTechnicalTraders.com

My index trend and trading strategy signal

Last week was a great week for trading as we locked in profits on a trade and raised our stops to protect the rest of our open positions.
take a look at how my trading system identifies trends, trades, and targets in the chart below.

If you want to become profitable technical traders join my educational trading newsletter and trade alerts complete with entry, targets and stop pricing.

Today we closed two winning trades at the open, and entered a NEW trade this morning markets are getting very tradable again. So ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next set of crisis’.

Soon I will be adding this trading system chart in the member’s area where it updates through the day for you to follow alone and trade with me. I should mention that the newsletter pricing will be going up soon. If you subscribe before the price increase you are grandfathered in at the old/lower rate.

EDIT: September, 26, 2019. New Terms and Conditions are in effect. Grandfathered rates may no longer apply. Please read the Terms and Conditions available on the sign-up page of www.thetechnicaltraders.com.

GET WINNING TRADES AND A FREE BAR OF GOLD – CLICK HERE

Chris Vermeulen

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