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SPY Breaks Below Fibonacci Bearish Trigger Level

Our research team wanted to share this chart with our friends and followers.  This dramatic breakdown in price over the past 4+ days has resulted in a very clear bearish trigger which was confirmed by our Adaptive Fibonacci Price Modeling system.  We believe this downside move will target the $251 level on the SPY over the next few weeks and months.

SOME RECENT HEADLINE ARTICLES WORTH READING:

On January 23, 2020, we issued a warning that the Put/Call ratio was warning of a potential Flash Crash

On January 24, 2020, we issued a research post related to the Wuhan Wipeout the markets

On January 26, 2020, we issued this research post about the start of a Black Swan event

On January 29, 2020, we issued this research post about a potential WaterFall selloff

Clearly, we were well ahead of this correction and issued multiple warnings to our friends and followers. This week we locked in 9.48% on GDXJ at the open on Monday, and today we are writing to suggest that $251 on the SPY is real support (see the magenta/purple area/line on this chart) and pay attention to the real risks at play in the markets.

This would suggest that the major markets will wipe out about 25% of the valuations in the major averages (ES, NQ, and YM), before finding any real support.  Obviously, there is a level near $208 that appears in RED on this chart.  If $251 fails to hold as support, then we immediately start to look at that $208 level for ultimate support.

This is the time when you want skilled researchers and traders backing you up and sourcing real solid trade opportunities for you.  We’ve been warning about this move for many months, suggesting that 2020 was going to be an incredible year for skilled traders and warning that a large downside price rotation was likely after August 2019.

In fact, one of our researchers predicted this move back in February/March 2019.  Visit www.TheTechnicalTraders.com to learn how we can help you stay ahead of these massive trends and find real opportunities in the markets.

Make sure to opt-in to our free market trend signals newsletter before closing this page so you don’t miss our next special report!

Chris Vermeulen
Technical Traders Ltd.

Is The Technology Sector Setting Up For A Crash? Part I

One thing that continues to amaze our research team is the total scale and scope of the Capital Shift which is taking place across the globe.  For almost 5+ years, foreign investors have been piling into the US stock market chasing the stronger US dollar and continued advancement of US share prices.  It is almost like there is no other place on the planet that will allow investors to pool capital into such a variety of strong assets while protecting against foreign capital risks.  Yet the one big question remains – when will a price reversion event hit the US stock market?

So many researchers, even our team of researchers, believe we have found the keys to unlocking when the price reversion event will take place.  Time-honored technical analysis techniques have set up very clear triggers that were negated by higher prices and continued upside trending.  What is certain at this point is that the Capital Shift is going to continue until it stops – at some point in the future.

Our research team decided to take a look at the FANG index and the individual symbols that make up that sector to see where the real strength and weakness exist.  Our goal was to attempt to understand how and when a potential price reversion event may take place and how this event may be correlated to the global contraction event related to the Coronavirus spreading across the planed while paralyzing certain economies.  Could the Coronavirus event be the catalyst that sets off a breakdown in the technology sector?

There are three components we want to start our focus on in this, Part I, of this research article.  First, the very real possibility that we are “rallying to a peak” at some point in the near future.  Second, the Custom Volatility Index highlighting continued overbought price action and the very real potential for a breakdown in price from these inflated levels.  Lastly, the FANG index itself suggesting we are very near to upper price boundaries after capital has poured back into the US markets in early 2020.

These three components suggest a market that is full of over-enthusiastic optimism and capital that has poured into the US stock market chasing gains that were clearly expected as 2019 came to a close.  Yet, in early 2020, a new risk suddenly became known, the Coronavirus, and this risk has already begun to devastate China’s economy and economic activity.  What happens if this sudden collapse in economic activity spreads over the next 30+ days and how will it change future expectations in the US stock markets?

CUSTOM TECHNOLOGY INDEX WEEKLY CHART

This Custom Technology Index Weekly chart highlights what we clearly believe is the “rally to the peak” type of price action related to the continued Capital Shift taking place in the global markets.  The breakout to the upside in November 2019 prompted a concentrated pooling of capital into the US markets.  After the end of the year, when institutional investors started engaging in the markets again, it was rumored that more than multiple-billions reentered the markets in early January 2020.  It is obvious when you look at this chart.

By the second week of the new year, capital continued to pour into the technology sector – pushing it higher by nearly 15% in less than 45 days.  That is an amazing rally to start off 2020 and could possibly be the “rally to the peak” process we’ve been hinting about.

CUSTOM VOLATILITY INDEX WEEKLY CHART

This Custom Volatility Index Weekly Chart is something we use to determine how overbought or oversold the US stock market is in relation to historical VIX weighted price ranges.  When this index is above the GREEN middle range, the US stock market is reaching into extremely bullish trending and overbought territory.  When this index is below the GREEN middle range, the US stock market is reaching extreme bearish trending and oversold territory.  The GREEN middle range is a neutral zone for trading.

Obviously, as VIX spikes and price levels collapse, we can see this Custom Volatility Index falling to levels below 6.0.  As price trends higher with moderately low VIX levels, we continue to see this Custom Volatility Index hover above 12~14.  The downside rotation in the US stock market (the -600 pt Dow day) pushed this Custom Volatility Index from near 22 to 14 – a big reversion event on this chart.  Now, the current level is back above 18 and pushing higher – the rally to the peak is setting up.

FANG WEEKLY CHART

Lastly, this FANG Weekly chart highlights the concentration of capital that has pushed the technology sector, and particularly the FANG stocks, much higher in 2020.  The reality of the situation is that until forward expectations, guidance or global economic functions change, this rally will likely continue for some time.  Our concern is that global market expectations could change very quickly in relative terms because of global economic functions and contractions related to the Corona Virus.

We recently authored an article suggesting that the entire Belt Road sector could become a risk factor if China is pushed into a very deep economic crisis.  China’s banking sector recently underwent a stress test where China’s economy dipped below expected GDP levels.  Nearly 15% of China’s banks will become insolvent if GDP drops below 5.5%.  Nearly 50% of China’s banks will become insolvent if GDP drops below 4.5%.  What happens if China’s GDP drops to 0.5% for a 4 to a 6-month span of time and the Chinese economy sputters in recovery after this Coronavirus event settles?

What happens to the Belt Road Initiative and the projects/relationships China has with those nations if, all a sudden, China enters a “Credit Crisis” in excess of $5 to $6 trillion US dollars.  Bloomberg recently reported that China Home Sales plunged 90% in the first week of February.  You don’t have to be a genius to understand the risks associated with that type of plunge in a key economic growth component.

If our research team is correct, this “rally to the peak” will continue in the US for as long as risk factors stay mildly calm for the US.  Once risk levels elevate across to a point where the US investors and economy may become threatened, then traders will likely begin to bail out of overvalued sectors, like Technology, and into safe-haven investments.  It is critical that skilled traders be prepared for this move because when it happened, it may happen very quickly and violently.

Join my Market Timing Signals Alert Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

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.

Range-Bound Into The End Of 2019?

Two of our favorite charts for following the US markets are suggesting the markets are range bound headed into the end of 2019.  The news may continue to push the price higher as the overall bias has continued to be to the upside.  Yet, our Fibonacci predictive modeling system is suggesting the current price trend has begun a “scouting party” type of move which may end in a moderate price correction fairly quickly.

IWM RUSSELL 2K STOCK INDEX CHART

Our Adaptive Fibonacci price modeling system is capable of learning from past price activity and attempts to present key price data and trigger levels that are important for future trending.  The GREEN and RED horizontal lines on the right edge of this chart shows where the TRIGGER LEVELS are for the Fibonacci system.  The bullish trigger level (GREEN) is 2.5% above the current price levels.  The bearish trigger level (RED) is nearly 16% below the current price level.  This suggests that price would have to target either of these levels to establish a new price trend, or continue rotating within these levels to setup new minor peaks and valleys in the price – thus creating revised TRIGGER LEVELS. Get my updates by joining my free trend signals email list.

What we find interesting is the current “scouting party” type of rally that is taking place on the right edge of this chart.  This upside price move is above historical resistance (the CYAN LINE) and appears to be an attempt to test the support levels above the $160.50 level.

If the price is successful in establishing support above this level, a new bullish trend may begin.  If not, the price will rotate lower and potentially begin a new bearish price trend.  Remember, the downside Bearish Trigger level is 16% below the current price – so that the downside move could be quite dramatic.

TRANSPORTATION INDEX WEEKLY CHART

This TRAN Weekly chart highlights a similar range-bound price setup where the bullish and bearish Fibonacci TRIGGER LEVELS are well above/below the current price.  The upside Bullish Trigger Level is 4.15% above the current TRAN price level – thus price would have to rally at least 4.5% higher to qualify as a breach of this Bullish Trigger Level and qualify as a potential new bullish trend.  The Bearish Trigger Level is near 18.4% below the current price level – thus the price would have to fall 18.5% from current levels to breach this Bearish Trigger Level and to qualify as a new Bearish Trend.

Where does this leave us headed into the end of 2019?  Our researchers believe the Santa Rally that most traders expect maybe more like a lump of coal in 2019.  We don’t expect any big breakout rally to happen over the next 35+ days and we don’t expect a massive 40% price correction either.  Our Fibonacci price modeling system is suggesting that any rotation within this 20% price range would be considered “absolutely normal” given the ranges that have been set up over the past 2+ years.

Last week we share these charts on the VIX that paint a clear picture of what is likely to unfold in the next week. This current week is one of the strongest months of the year so

Therefore, the downside price move of 6 to 12% would be completely normal.  And the upside move of 2~3% from current levels would be completely normal.  Any price rotation within the GREEN/RED Fibonacci triggers levels would be considered “normal price rotation” given the established price ranges, peaks and valleys.

We’ve been saying for months, 2019 and 2020 are certainly going to be interesting years for traders.  We believe any price rotation or breakout could lead to a wide range of price rotation that may shock skilled technical traders.  At this point, a 22%+ “normal” price range has setup in the markets.  Prices could rotate within this range and “not really go anywhere” in technical terms.

I want to wish everyone a Happy Thanksgiving and if you find this type of analysis interesting be sure to visit my website and sign up to get both my swing trade and investing ETF trade signals at 41% discount, plus a free bar of silver or gold with my Black Friday Offer Today! Visit: www.TheTechnicalTraders.com

Chris Vermeulen
Technical Traders Ltd.

Indexes Struggle and TRAN Chart suggests a possible top

Nearing the end of October, traders are usually a bit more cautious about the markets than at other times of the year.  History has proven that October can be a month full of surprises.  It appears in 2019 is no different.  Right now, the markets are still range bound and appear to be waiting for some news or other information to push the markets outside of the defined range.

We still have at least one more trading week to go in October, yet the US markets just don’t want to move away from this 25,000 to 27,000 range for the Dow Industrials.  In fact, since early 2019, we have traded within a fairly moderate price range of about 3200 points on the YM – a rotational range of about 11% in total size.  Historically, this is a rather large sideways trading range for the YM – nearly 3x the normal volatility prior to 2015.

DAILY YM CHART

This Daily YM chart highlights the trading range that has setup over the past 5+ months with the YELLOW LEVELS.  Price continues to tighten into a more narrow range as we progress towards the end of 2019.  Our researchers believe a moderate price breakdown will occur near the apex of this move which will act as a “price reversion event” and allow the markets to rally into 2020 and beyond.  We are using our proprietary price modeling tools to attempt to identify any signs that can help us validate this research.  Until we have some type of validation of the move, we can only wait as the risks associated with taking trades at this time are much higher than normal.

The SP500 cycle analysis I did last week provides some solid forward-looking direction as well.

TRAN – TRANSPORTATION INDEX

The TRAN (Transportation Index) is also confirming our analysis of a sideways price range with very little opportunity at the moment for a high-risk trade.  The TRAN gapped higher on October 21 which may set up a massive top pattern formation, possibly a Three River Evening Star pattern of a massive Engulfing Bearish pattern.  We’ve highlighted the resistance range in RED on this chart and the support range in GREEN.  Caution is the name of the game right now.  Let the markets tell us what is going to happen next.

THE WEEKLY CHART OF THE TRAN

This Weekly chart of the TRAN shows a clearer picture of the sideways price range that is setting up and how close we are to the APEX of the Flag/Pennant formation.  Again, we know the markets are going to break clear of this Flag/Pennant formation, but the direction of the breakout will likely depend on future news events that we can’t predict.  Any global failure or crisis may push the markets lower.  Any global victory or success may push the markets higher.  Right now, we believe the risk factors are very high and we are suggesting that traders need to be extremely cautious throughout the end of the year.

CONCLUDING THOUGHTS:

There are still massive opportunities in sector ETFs and commodity ETFs for traders that want to find quick/short-term trades.  Gold and Silver are setting up major momentum bottoms.  Natural Gas continues to set up a massive momentum bottom and Technology continues to set up a major topping type of pattern.  The shift in capital away from risk will surely drive some really big trends over the next few weeks and months.  A clear picture of what to expect looking forward up to 45 days I still rely on my market trend charts to know when I should be buying or selling positions. Skilled technical traders will be able to find incredible opportunities if they are patient and don’t “blow up” their accounts chasing risky rotation.

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!

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.

Chris Vermeulen
www.TheTechnicalTraders.com

The Russell and Transportation Tell A Completely Different Story

We’ve been writing about the broader US stock market for many months – highlighting the Pennant/Flag formations that have continued to set up since early 2018.  Sometimes, the keys to really understanding what is transpiring behind the scenes in the US markets is to pay attention to various market segments and to consider applying some “outside the box” thinking. Before you continue, be sure to opt-in to our free market trend signals newsletter.

Our research team would like to fall back into price analysis using the Russell 2000 and the Transportation Index as “additional measures” that mirror the US major stock market in terms of price, volatility and future price targets.  The interesting facet of this type of analysis is that we can study any symbols we want and apply the different techniques, patterns and insight we learn to the total scope of the broader US stock market.  Thus, we can attempt to identify how and when certain price actions may become more intense or volatile while comparing how our predictive modeling systems and other tools share unique outcomes.

The Russell 2000 and the Transportation Index should be on every skilled traders radar – along with the three major US stock market symbols (ES: S&P500, YM: Dow Jones, and NQ: NASDAQ).

Additionally, all traders should follow the US Dollar, Gold, Silver, Oil, VIX and a handful of other key market sectors.  The old saying is “it is not a stock market – it is a market of stocks” is very true.

After the two day selloff, many traders still have questions about what lies ahead for the US markets.  We’re reading some reports of a “collapse taking place in the US stock market” and others, like our research team, believe this move in the markets is related more closely to a “move away from risk and a capital shift into safety”.  So which is it?  A collapse in the making or a sideways shift of capital into various safe-havens?  Let’s look at the charts.

WEEKLY RUSSELL 2000 (IWM) CHART

This Weekly Russell 2000 (IWM) chart highlights the rotation that has been in place throughout much of 2019.  The MAGENTA support level near 144.25 has proven to be intermediate support through multiple downside price cycles.  Ultimate Support resides at 125.00.  The current downside price move is still above the intermediate support level, although that could be breached over the next few trading days if price weakness resumes.  Therefore, until the 144.25 level is breached, we would presume that price may attempt to find support or form an intermediate basing pattern near recent lows.  Our ADL predictive modeling system suggests the YM (Dow Jones) may have already bottomed.  Thus, any continued weakness in the US stock market may result in a “wash-out” price low point near Ultimate Support.

TRANSPORTATION AVERAGE (IYT) WEEKLY CHART

This Transportation Average (IYT) Weekly chart shares a similar price setup as the Russell chart.  Again, we can see the recent downturn in price has only really moved back towards intermediate support near 174.25 and has yet to really attempt to breach into “new low price” territory.  Because of this, we can assume the downside moves in the ES, NQ, and YM which did result in “new low” price formations can’t be completely confirmed until the IWM and IYT also break into “new low” price formations.  Ultimately, the MAGENTA support levels are key to understanding if this is a “collapse” or a “shift in capital” as we suggest.

CUSTOM WEEKLY MARKET VOLATILITY INDEX

One of our favorite tools for understanding market price volatility and potential is our Custom Volatility Index.  This Weekly Custom Volatility Index chart highlights the current downside price rotation in historically rational terms.  Much like the two charts above, this chart shows the current price levels are still well above the previous two base/bottoming price levels – thus, we have little confirmation of a breakdown or collapse in prices (yet).  If the price of our Custom Volatility Index were to move lower and close below 8.00 on an END OF WEEK basis, then we would see a new “closing price” low that would immediately send up warning flags of a possible price collapse in the US stock markets.

Ultimately, without this type of price move happening, we are well within the standard deviation ranges of normal price rotation and strongly believe this rotation to be a shift in capital away from risk and towards value, safety, and Blue Chips.  Think of it like this, traders and investors are shifting their investments away from what has been “high flying” and moving their capital into more traditional blue chip/dividend-paying assets.

CONCLUDING THOUGHTS:

Of course, time will tell if our analysis and predictions are correct or not.  We urge you to also read our recent ADL predictions research post suggesting the ES and NQ will see broader price rotation and volatility than the YM in this recent post here.

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.

Be sure to ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Round or Gold Bar and SPECIAL OFFER – CLICK HERE

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these supercycles are going to last years. This quick and simple to understand guide on trading with technical analysis will allow you to follow the markets closely and trade with it. Never be caught on the wrong side of the market again and suffer big losses. PDF guide: Technical Trading Mastery

Chris Vermeulen
www.TheTechnicalTraders.com

US Indexes Continue To Rally Within A Defined Range

This week ended with the S&P, Dow Industrials and Nasdaq stalling near recent highs.  From a technical perspective, both Thursday and Friday setup small range price bars (Doji candles or small Spinning Top type bars) after the upside price move on Wednesday.  These are indicative of price consolidation and indecision.

The news events that initiated this rally, nearly a week ago, continue to drive sentiment in the markets.  Yet the news from the ECB that new stimulus efforts would begin with $20 Billion Euros monthly invested in assets until they decide it is not required any longer suggests the EU is desperate to support extended growth and some renewed inflation.  This move by the EU pushed banks and the finance sector higher while the US stock market stalled near the end of the week.

At these lofty levels, almost all of our indicators and predictive modeling systems are suggesting the US stock markets are well within an overbought mode.  Of course, the markets can continue in this mode for extended periods of time as central banks and external efforts to support the asset/stock market continues, at some point investors/traders will recognize the imbalance in price/demand/supply as a fear of a price contraction.

We are very cautious that the market is setting up a lofty peak at this time.  It is important for traders and investors to understand the global situations that are setting up in the markets.  With precious metals moving higher, it is important to understand that FEAR and GREED are very active in the markets right now.  The continued capital shift that has been taking place where foreign investors are shifting assets into US and more mature economies trying to avoid risks and currency risks is still very active.  Yet the lofty prices in certain segments of the US stock markets means that this capital shift may take place where investment capital is shifted away from more risky US assets (high multiple speculative stocks) and into something that may appear to be undervalued and capable of growth.

The shifting focus of the global markets, the EU and the continued need for stimulus at this time is somewhat concerning.  Our view is to watch how the global markets play out and to maintain a cautious investment strategy.  We shifted into an extremely cautious mode back in February/March as the US market completed the October/December 2018 breakdown and precious metals started a move higher.  We continue to operate within this extremely cautious investment mode because we believe the foundation of the global markets are currently shifting and we don’t believe the stability of the markets is the same as it was after the February 2017 market collapse.

What do we believe is the result of this shift in our thinking?  This is very simple.  We are entering into the final 13+ months of the US presidential election cycle, the trade wars between the US and China continue to drag on with is muting economic activity, the EU continues to battle to find some growth/inflation while Great Britain attempts to work out a BREXIT deal as soon as possible.  Meanwhile, we continue to try to find opportunities in the markets with these extreme issues still pending.  We don’t believe any real clarity will happen until we near October/November 2020. Be sure to opt-in to our Free Trade Ideas Newsletter to get more updates.

This ES Weekly chart highlights the range-bound price rotation that currently dominates the US stock market.  Overall, the US stock market and the economy are much stronger than any other economy on the planet.  The risk factor is related to the fact that the capital shift which has been pushing asset prices higher as more and more capital flows in the US stock market may have reached a point of correction (headed into the US presidential election cycle).  As long as price stays within this range, we believe continued extreme volatility will continue.  Our Fibonacci system suggests price must close above 3178 to qualify as a new bullish trend and/or close below 2577 to confirm a new bearish trend.

This Transportation Index weekly chart shows a similar setup.  Although the Fibonacci price trigger levels are vastly different.  Price would have to climb above 11,475 to qualify for as a new bullish trend whereas it would only have to fall below 10,371 to qualify as a new bearish trend.  Given the past rotation levels, it is much more probable that price may rotate into a bearish trend before attempting to reach anywhere near the bullish price trigger level.

Our Custom volatility index suggests price has rallied last week well into the upper “weakness zone”.  This move suggests the upside price move may already be well into the overbought levels (again) and may begin to stall.  Traders need to be cautious near these level.  We continue to suggest that skilled technical traders should look to pull some profits from these lofty levels to protect cash/profits.  Any extreme volatility and/or a bigger price rotation could be disastrous for unprepared traders.

We are excited to see what happens early next week.  News will be a big factor – as it always is in this world.  Pay attention to how the markets open early this week and keep your eyes open for any crisis events (wars, bombings or other geopolitical news).  And get ready for some really big volatility to hit the global markets.

This is the time for skilled technical traders to really shine as these bigger moves roll on.

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.

So, if you believe in technical analysis, then this is the newsletter and market condition for you to really shine, especially with my trading indicators coming online.

Be prepared for these 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.

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.

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 

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Chris Vermeulen – www.TheTechnicalTraders.com

Transportation Index Points To Stock Markets Weakness

The recent news that the US and China will restart trade talks resulted in a fairly large upside price rotation as this “good news” suggests that some resolution to the trade issues may be in the works soon. Yet we want to warn traders that the US will likely want to see progress and action regarding any trade resolution before tariffs are reduced and eventually removed.  We can’t imagine that the US would take any promises stated by China as any real progress towards balancing trade or normalizing relations.  We believe the process of resolving the US/Chinese trade dispute could still be many months away from any real opportunities for traders and the global markets. The other issue on the table this week and in the immediate near future is the “no-deal” BREXIT.  News that the Queen assisted Boris Johnson by shuttling Parliament in the UK to help facilitate a “no-deal” BREXIT could send shock-waves throughout the global markets over the next 30 to 60+ days.  Even though the US and UK appear to have settled on some strong trade resolutions to help calm the waters, the fallout in the EU as well as the reverberations that may be felt throughout the world over the next 12+ months. Before we get into the details, be sure to opt-in to our Free Market Forecast and Trade Ideas Newsletter

Weekly Transportation Index

Overall, we are relying on some of our favorite alternate charts to help us understand what the markets are really showing us in terms of price action and direction.  One of our favorites, the Transportation Index, has recently crossed below the Bearish Fibonacci Trigger Level (early Aug 2019) and continues to trail below 10,400. A double-bottom setup has formed near the 9695 level that appears to be a fairly strong level of support.  If this level is broken in the future, our Fibonacci price modeling system is suggesting downside price targets below 8500 (below the lows in December 2018).  This would suggest that any real downside risk could extend the US indexes below the December 2018 lows on a breakdown move.

SP500 Daily Index Chart

]As we try to translate the Transportation Index analysis into the ES chart, the very first thing we focus on is the tight, sideways price range that continues to “coil” before a breakout/breakdown move.  The low set up in early August 2019 (near 2775.75) is still the most recent critical low in price formation.  The other recent low present a very interesting setup – a potential Double-bottom setup near 2817.75, yet we also see a recent “new low” setup from the dip in price on August 26 (with a low of 2810.25).  This new low follows the Fibonacci price theory rules to support a bearish/downside price trend setup that should continue to dominate the markets until we see any type of “new highs”.  Therefore, the analysis of the TRAN chart and the current setup in the ES continues to suggest a breakdown move is likely.

SP500 Weekly Index Chart

This Weekly ES chart highlights how the Fibonacci price modeling system is interpreting the recent volatility and price rotation over the past 18+ months.  Pay very close attention to the current Bullish and Bearish Fibonacci Trigger Levels.  While you are at it, pay very close attention to the previous Bullish and Bearish Fibonacci Trigger Levels.  What you will notice is that the current price rotation over the past few weeks is right between the current and past Fibonacci trigger levels for both the Bullish and Bearish price rotation going all the way back to the downside rotation in November/December 2018.  This would suggest that the current price level is very fragile in terms of future direction. We are not seeing any real clear price direction or trend right now, the current Fibonacci price trigger levels are more than 100 points away from the current price (either direction) and the support level near 2800 is still holding.  The Daily chart suggests price is attempting to hold above support near 2880.  Yet the new low on the Daily chart suggests price has recently shown a Fibonacci Trend with potentially confirms price weakness and a potential bearish outcome. How are traders to interpret all of this information and make decisions?
Headed into this weekend, our research team suggests pairing back any open long positions you may have in your portfolio off of these recent highs and preparing for a bigger price move going into the end of 2019.  Our researchers still believe a breakdown in price will occur as the BREXIT, US/China trade issues and further economic contractions continue to undermine real growth opportunities going into the end of 2019.  But time will tell if we are correct in our interpretations or not. Check out these other exciting trading tools and chart full of opportunities that we will be sharing. We believe the news events are artificially supporting the markets with expectations that may prove to be many many months away.  Watching the other “alternative” charts (like the TRAN, XLF, IWM, YINN, and others), we can clearly see the price recovery in the ES, NQ, and YM are somewhat isolated price moves related to news related expectations.  The rest of the market is not reacting like these major indexes. We would advise traders and investors to take advantage of these higher prices to pull profits out of open long positions and take some risk off the table at this juncture in price. We entered a new trade today and our portfolio is primed and ready for big moves going into next week. We believe super-cycle research and other proprietary modeling systems are suggesting that price weakness will dominate the markets for the next few months. We are only 5 to 11 days away from a new major event 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 and recession. In short, you should be starting to get a feel of where commodities and asset class is headed for the next 8+ 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.

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Chris Vermeulen – www.TheTechnicalTraders.com

PART II – Silver, Transports, and Dow Jones Index At Targets – What Direct Next?

As you can probably imagine, we’ve received a ton of emails and questions about our recent predictions for precious metals and the August 19 breakdown date in the global markets.  It seems everyone is reading our research posts and is curious about how to prepare for these moves and how we came up with these predictions months in advance.  In this second part of our metals & Aug 19 update post, we’ll try to highlight our expectations going into the weekend prior to the Aug 19 breakdown date (Monday). In the first part of this research post, we highlighted what we believe is the imminent completion of the MID Leg 1 upside move in precious metals.  Our research continues to suggest that we are still setting up a major LEG 1 upside move which should be considered a larger Elliot Wave structure.  Within this Wave (Leg) 1 formation, a typical 5 wave structure is likely to continue forming.  Currently, we are creating the Wave 3 of the total of 5 waves that will complete a finished upside Wave (Leg 1).
If our analysis is correct, the peak that ends Wave 1 could be well above $2000 for Gold and well above $24 to $28 for Silver.  Then, of course, we’ll set up for a corrective Wave #2 before another, BIGGER, upside wave #3 sets up in precious metals. Taking a look at this Weekly Silver chart, you may be able to see the waves as we see them. _  The upside price move from Dec 14, 2015, to July 4, 2016 sets up the initial upside Wave 1 leg. _  The low in November 2018 sets up the end of corrective wave B from the initial bottom on December 14, 2015. _  This setup suggests we are currently starting a Wave 3 upside move which is usually 1.5x larger (or more) than Wave 1. _  Keep in mind that we believe all of these “minor wave” formations are part of a much larger 5 wave structure that is setting up. As you look at the Fibonacci diagram, above, remember that within each of those waves (1 through 5), a typical complex price wave formation (1, 3, 5, or other more complex wave formation) will set up to complete the broader wave formation.  Therefore, as you review the chart below, keep in mind that we believe everything originating from the bottom on December 14, 2015, till now is still part of the WAVE 1 formation on that Elliot Wave chart.  We are just getting started with this move, folks.

Silver Weekly Chart with Wave 1

The YELLOW arrows we’ve drawn on this Silver chart are our expectations for Silver over the next 6+ weeks and will potentially complete the initial upside minor wave 3 formation/ Leg 1.  We do understand that Elliot Wave counting can be difficult to understand, but please allow use to preface this research by suggesting that every larger wave consists of smaller waves.  And those smaller waves, consist of sets of even smaller waves.  And so it continues all the way down to sub-one-minute charts. The point we’re trying to make is that the $21 endpoint on this chart is very likely just the end of Wave 1, subwave 3, impulse move C which may target a total of D moves before reaching the end of subwave 3.  To put it in more simple terms, we are only about 20% into this upside move right now based on our expectations.
Why is the move in precious metals so important for our August 19 breakdown date prediction?  Because we would expect precious metals to begin a massive price rally if the global stock markets were expecting some type of major downside rotational event.  A more into metals is a safety play for global investors.  If something is happening in the markets and fear becomes more evident, then precious metals should start to rally.  This sets up an expectation that some type of price revaluation event is likely to take place in the near future. Thus, the upside price moves in Gold and Silver align perfectly with our August 19 breakdown expectation.  The key to this, in our opinion, is that Silver has really started to skyrocket on large volume.  This creates “confluence” in the metals group that fear is now driving investors into the lesser Silver market in preparation for a price reversion move soon.

Weekly Transportation Index chart

This Transportation Index chart highlights the fact that investors believe the future 3 to 6 months in the global economy will be moderately slower and that transportation activity and revenues will likely continue to diminish.  The Transportation Index is an excellent measure of future global economic expectations that can be used as a “general market indicator” for future expectations.

Dow Jones Weekly Chart

This YM Weekly chart highlights the key Fibonacci price trigger level that has setup near $26,170.  This is the critical price level for the YM to actually generate a confirmed Bearish price trend (end of week closing bar price level) which may be the initial downside price trigger.  As of the creation of this chart, the YM price was above this Fibonacci trigger level.  But as of right now, the YM price is already below the Fibonacci trigger level and if the YM closes the week below this level, then we would have a new confirmed Bearish Fibonacci price trend.

CONCLUDING THOUGHTS:

The interesting fact behind all of this is that these predictions were made by our research team months before today.  Our Gold prediction was initiated near October 5, 2018.  Our August 19 breakdown date was initiated near May 2019 (originally as a July Topping pattern expectation and later revised to the August 19 breakdown date).  All of these predictions were created using our proprietary price modeling, predictive analysis tools, and advanced cycle analysis tools. We find it absolutely incredible that we are able to make these types of predictions many months into the future and watch the markets do exactly what we suggested would happen.  Obviously, we hope you are finding value in our research posts and modeling systems as well? If you have not already prepared for the August 19 breakdown date prediction, we would suggest that you consider how you would want to protect any open long positions at this time (headed into the weekend) and set up your portfolio for a broader market rotation and upside move in precious metals over the next 3+ months.  It is not too late to take action to protect your assets – even weeks past August 19, you can still act to take advantage of these bigger price moves.  We are simply urging you to plan and prepare for these moves as you read our research posts.

FORECASTED MOVES FOR GOLD, SILVER, MINERS, AND STOCK INDEXES

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 on gold miners and the SP 500 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.

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Chris Vermeulen www.TheTechnicalTraders.com

Small Caps Setup A Very Rare & Interesting Price Pattern

Our researchers have identified a very rare type of price pattern that is typically associated with explosive trend changes and trends.  We call this type of pattern a “Sandwich” pattern because of how price reacts within a range.  The IWM, Russell 2000 ETF, is illustrating a nearly perfect example of this pattern right now.

Daily IWM chart (Russell 2000 Small Cap Index)

This close up view of the Daily IWM chart highlights the Sandwich pattern over the most recent 5 trading days and how price enters this volatile period, rotates around within a range, then settles near the upper or lower end of the range before a price breakout occurs.  Notice the earlier Sandwich pattern setup and how price settled near the bottom of the range before a downside price leg pushed the price much lower. It is our belief that the IWM could be setting up for a significant reversal or breakout based on this Sandwich pattern os be ready for an extended move.

Longer-term View of the Daily IWM chart

Here is a longer-term Daily IWM chart that highlights previous Sandwich patterns for you to review. We go into more detail and a very interesting setup in the IWM and transportation index that took place in 2008, same set up we see now. See charts and report here.
One thing to understand about the Sandwich pattern is that it is an early warning sign that price has reached an inflection point and will likely attempt to break out or reverse down from the ranges set up within the Sandwich pattern. Also, you can see from the examples, above, that these patterns can take many bars to form and are sometimes somewhat convoluted in structure.  The most recent Sandwich pattern is unique because it is very defined over the past 5+ days.  We believe an upside price pop to the upside could turn into a “washout high” price setup. Compare this price activity to the SPY chart and you’ll see that the IWM, Small Caps, are operating as a leading price indicator for the potential breakout/breakdown move that may happen in the immediate future.  We see similar types of price rotation, but nothing as clear as we see on the IWM chart.
The fed news is shaking things up and our analysis stats this month could be the market top. We expect Aug 19th-ish… but this month is the window we feel it may happen. Stay tuned to our research – this is going to be fun to trade.

WARNING SIGNS ABOUT GOLD, SILVER, MINERS, AND S&P 500

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.

CONCLUDING THOUGHTS:

In short, you should be starting to get a feel of where each commodity and asset class is headed for the next 8+ 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. 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. 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.

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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

Major Index Top In 3 to 5 Weeks?

Our researchers rely on a number of proprietary tools and cycle forecasting technology.  Additionally, we use custom index charts to help measure price cycles, trends, support & resistance and many other aspects of the markets.  Recently, we posted an article relating to the US Dollar and foreign currencies using custom index techniques.  In the past, we’ve highlighted our Custom Price Cycle index that we use to gauge market sentiment, topping and bottoming setups.  All of these tools are essential for our team of researchers while they attempt to identify trade setups and larger market events. Currently, we are highlighting a number of our custom index chart that suggest a market top may only be 3 to 5 weeks away and the setup of this market top may surprise many traders. We posted a good forecast chart here also. First, we’ll highlight our Smart Money Custom Index chart on a Monthly charting basis.  As you can see since the ultimate price bottom in 2009, and using the price range from 2015 to 2016 (the rotation prior to the 2016 Presidential Elections) as the basis for the forward envelope, our Smart Money index shows the markets have rallied to levels just above the envelope in January 2018, then rotated lower to levels near the lower envelope levels in December 2018.  This extended price rotation suggests the entire year of 2018 prompted a massive price rotation event that likely resulted in a price revaluation cycle. Our researchers believe the strength of the US Dollar will continue to drive foreign investments into the US stock market and prompt a rally to levels near the middle of this price envelope before stalling and topping in August or September of 2019.  This top formation should result in a price decline in the US stock market of at least 16% with a maximum decline level of somewhere between 24% to 28% overall.  We’ll get into more detail about that later in this article. We want our readers to understand this Custom Price Cycle chart highlights the level at which the price bottom will likely form, near the lower level of the current price envelope, and suggests the current price rally will likely attempt to breach key psychological price levels ($300: SPY, $3000: ES, $30k: INDU) before this new price top completes.
After these new price highs are reached above the key psychological price levels, we believe the new price top will immediately begin to form with a short period of sideways price action, then a price decline back below these psychological levels and likely initiating a downward price decline of at least 11 to 13%.  It is our opinion that this downward price decline in the US stock market will align with increased global market weakness and currency devaluations that are likely to be much greater in scale and scope than the US stock market price decline. We believe the US Dollar will continue to stay strong while staying above $95~96 throughout most of this price decline.  We believe the strength in the US Dollar may be a catalyst for the future global market price declines and may also play out in future activities in precious metals and commodities. The strength of the US Dollar, while foreign markets are contracting, would present a very ominous event as debt, credit and future operational standards of many foreign corporations, nations, governments, and consumers could come under severe pressures. This Custom Price Cycle chart, below, highlights the current price setup of the US stock market in relation to previous high and low points.  The closer we come to the upper price channel, the more likely we are to see price setup and seek out a price top formation.  Although, history has shown that price can move up to these upper levels and continue to trend in an upward price channel for many weeks and months.  So, at some point in the future, we would expect to see this Custom Price Cycle chart revert back to 2017 type price activity where price continually attempts to stay near the upper price channel levels with very mild price rotations. Currently, though, we believe the US stock market is only 3 to 5 weeks away from a major price topping formation and that the downside price move will likely result in a, roughly, -16% to -25% downside price rotation before the end of 2019.  We believe US earnings will push this Custom Price Cycle chart to levels near or above the upper price channel level and that will drive the US Dollar higher as well as a shift in capital deployment prior to the end of September.  The shift will be away from technology and mid-caps and into the safety of cash, metals and large-cap equities.
This shift in capital investments will likely transpire over many weeks before a serious price breakdown begins.  In other words, we expect a top formation to setup somewhere between August 15 and September 16.  This top formation will likely result in 3~6 weeks of sideways downward pricing pressure before a larger price breakdown happens.  We believe the larger price breakdown will coincide with some external economic event and result in a migration of capital away from risk and into cash/metals/safety.  Right now, our estimate is that this external economic event may be a currency devaluation event (Asian currencies breaking down and putting pressure throughout Europe and the rest of the developing world). It is very likely that some issue related to the US/China trade deal prompts this currency devaluation move or that some extended credit/debt crisis event becomes more evident to investors.  We believe the Asian currencies are particularly at risk for this event and that European and development market currencies will likely collapse as a result of the Asian/European currency price declines. The US technology sector could be uniquely vulnerable should this event unfold as we suspect.  Foreign markets and investor are heavily invested in the US technology sector.  Many of these investors have moved their capital into the US Technology sector to avoid risks related to their home country’s currencies and to take advantage of the US Dollar strength.  A decline in the US stock market, of any level greater than 10%, could send a shock-wave through the global markets and cause investors to shift away from risk and into safety.
Expect to see the volatility index to start rising and for the price of options to jump as well. I posted this VIX chart and cycle analysis a couple of days ago and its good for another few weeks in terms of its direction.

IN CONCLUSION:

Our researchers believe we are only a few weeks away from this event and those Q2 US earnings will push the US stock market above these psychological price levels.  It is this event, the push above the key psychological price levels ($ 300: SPY, $ 3000: ES, $ 30k: INDU) that will likely trigger the topping event and set off a chain reaction event that we have described. Pay very close attention to how the foreign currency market reacts over this time-span and pay very close attention to Gold/Silver and the US Dollar.  We believe this topping price formation is going to unfold just as we are suggesting and we believe this will be an incredible opportunity for skilled technical traders. We’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter if you like what I offer, join me with the 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 Free 1oz Silver Round or Gold Bar Shipped To You! I can tell you that huge moves are about to start unfolding not only in 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. IM GIVING THEM AWAY WITH 2-YEAR MEMBERSHIPS
So kill two birds with one stone and subscribe for one or two years to get your FREE BULLION and enough trades to profit through the next metals bull market and financial crisis! SUBSCRIBE -> GET FREE BULLION -> GET WINNING TRADES Chris Vermeulen – Technical Traders Ltd