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US Election Cycle Will Create Increased Volatility
Throughout recent history, the US Presidential election cycle has prompted increased volatility and price consolidation. This happens because the US Presidential elections are really the biggest change of leadership on the planet for all economies and people. This year, the show is getting started a bit earlier than most…
Unless you were following our research, see below, and were already aware of the many warning signs we’ve been posting in our continued efforts to help traders and to help educate skilled investors, you were probably caught completely off guard by the news of near trade tariffs last Sunday, May 5th. Let’s face it, the short position in the VIX was an indication that institutional and retail investors had gone “all in” on this rally and had failed to even consider anything disrupting the narrow range price rally that had been in place over the past 45+ days. Well, all of that changed on Sunday night and many traders woke up Monday morning to the INDU down nearly -500 points.
The most incredible facet of this rotation was that the markets had already discounted the trade tariff news and began to rally almost immediately after the opening bell on Monday. Sure, we are not out of the woods at this time with the potential for continued price volatility and price rotation, but the fact that the US stock market was capable of rallying back from a very deep opening price shows just how resilient the US stock market and the economy really are. The issue this time, we feel, will be felt in the global market and in foreign currency rates. We’ll get into that more as we continue.
In case you missed our most recent research posts, we suggest you take a few minutes to review the following posts to bring you up to speed with our analysis/research. Reviewing these posts may help you to better understand the rest of this article and our expectations for the next 60 to 90 days.
March 31, 2019: Proprietary Cycles Predict July Turning Point for Stock Market
https://www.thetechnicaltraders.com/proprietary-cycles-predict-july-turning-point-for-stock-market/
April 10, 2019: Intra-Day Fibonacci Modeling Shows Volatility Is About To Spike
https://www.thetechnicaltraders.com/intra-day-fibonacci-modeling-shows-volatility-is-about-to-spike/
April 17, 2019: US Stock Markets Setting Up For Increased Volatility
https://www.thetechnicaltraders.com/us-stock-markets-setting-up-for-increased-volatility/
April 22, 2019: Prepare For Unknown Price Action As New Highs Are Reached
https://www.thetechnicaltraders.com/prepare-for-unknown-price-action-as-new-highs-are-reached/
April 28, 2019: Markets Are Setting Up a SHAKE-OUT – Be Prepared
https://www.thetechnicaltraders.com/markets-are-setting-up-a-shake-out-be-prepared/
Now that we’ve covered a bit of our past research, allow me to attempt to summarize things a bit.
_ First, we continue to expect new high prices to be established over the next 30+ days. Yes, volatility will be larger than it was 30 days ago, but we believe the “Shake-out” is just starting and we believe the US stock market will continue to push higher – at least for the next 3+ weeks.
_ Second, we are very cautious of the July/August 2019 Cycle Predictions, see above. We believe these cycles could be a warning of a major price trend change that prompts some type of “dynamic shift” in the global markets. Right now, it appears a “Shake-out” in China/Asia may be in play. But we believe a bigger “Shake-out” may be brewing somewhere else in the world.
_ Lastly, we believe any top formation in the US Stock market will result in a Pennant/Flag formation, rotational top formation, that will give traders ample time to reposition their trades and reduce risks.
Just a few days ago, we posted this research to help traders understand just how close the markets are to topping and what to expect – see below. We continue to believe this “Shake-out” is more about disrupting low volatility expectations and less about a major market top in the US stock market
April 30: How Close Are The Markets From Topping?
https://www.thetechnicaltraders.com/how-close-are-the-markets-from-topping/
The Chinese stock markets will likely continue to drop as new expectations are suddenly realized and trade issues, especially IP and future IP partnerships, become a major contention moving forward. Every step China takes, right now, is very fragile in terms of US expectations and the ability to show the world China is willing to become a responsible player in the technology field. If China fails to realize this, the world will clearly see that China’s intention is to take as much as they can from global technology leaders while stuffing their pockets full of foreign cash – it will not end well.
The Shockwave that has just started to unfold across the global stock market/financial world is that trade, economic expectations, and currency valuations will continue to “revalue” to address these ongoing concerns until some formal resolution works itself into place. In the meantime, any new issues that become present could further complicate these “revaluation” efforts. The concert just started, folks. We have a long way to go before this is all over with.
This Weekly YM chart showing our proprietary Fibonacci price modeling system is suggesting we have a “long way to go” before we could consider any downside price rotation a major risk. The recent price highs in this YM chart have prompted a Bearish Fibonacci Trigger Price near the December 2018 lows (see the RED line near the $21,450 level). You might be asking, “why so low?”. This “learning modeling system” attempts to learn from price and attempts to identify where key price levels are that MUST be reached for a confirmed trend change. As price has continued to rotate within a very wide range over the past 7+ months, the Fibonacci modeling system is suggesting that price could fall all the way back to near the December lows WITHOUT triggering a new “long term” bearish price trend.
In other words, the current price range that would constitute “normal price volatility” is anywhere between $21,450 and $26,950. When we said to expect increased volatility, we really meant it. This is a $5,500 range in the YM that could become a “normal volatility zone”.
The NQ Weekly chart, on the other hand, is providing us a much clearer Bearish Fibonacci Trigger level, near $7,393. Once the price is able to close below this level, then we would consider the NQ entering a new Bearish trend as long as price stays below the $7,393 level. If it was to rally back above this level, then the trigger is negated as long as it stays above the trigger level.
Pay very close attention to the YELLOW price channels that originate back in early 2018. Those levels are likely to play a very important role in going forward as price attempts to establish new price ranges/channels throughout this expected price rotation and volatility.
Lastly, we’ve been warning that the Financial Sector could come under some intense pressures over the next 5 to 16+ months as all of this “Shockwave” plays out. The reason we believe the Financial sector is vulnerable to this crazy volatility is that the exposure to multiple levels of capital risk could complicate the long-term earnings capabilities of this sector. Almost all of these firms are involved in Personal, Corporate/Business, Real Estate, Trade, Global financing, Currency, and Bond related business ventures. These firms are not remotely immune to any “Shockwave” – they are located right in the Bullseye/Target zone.
We believe the XLF may come under increased pressure over the next 3~6+ weeks as the Shockwave event continues to unfold. We believe issues with Personal/Consumer credit will be the first sign of a Shockwave event and further pressures from Corporate/Business/Global/Currencies would likely be the second shoe to drop over the next 8+ months. We believe a rotation in the XLF to near $25 is very likely over the next 3~6 months and that this move could be the result of extended risk factors originating from the “Shockwave event” we’ve been suggesting is currently unfolding.
Skilled traders should be watching technology stocks, the NASDAQ, the INDU, the Financial Sector and commodity prices over the next 4+ months for any signs that the Shockwave event is increasing in amplitude. Additionally, pay very close attention to how currencies are moving and where the US Dollar is moving in relation to other currencies. Gold and Silver should also be on your radar over the next few months as well. Lastly, prepare for the major cycle event in July/August 2019.
The past four tradings sessions with volatility has kept us busy check out our most recent index trades on the SP500
Our advice continues to be to look for opportunities as the volatility increases and continue to expect an upside price bias in the US stock market – at least until we have any strong evidence that price trend has changed. Don’t buy into the doom-sayers just yet. In our opinion, this US upside price move is not over yet.
If you want to become a technical trader and pull money from the markets during times when most others cannot be sure to join the Wealth Trading Newsletter today. Plus, for a few days only I’m giving away and shipping Free Silver Rounds to subscribers who join our select membership levels.
Chris Vermeulen
www.TheTechnicalTraders.com
Precious Metals traders have been hanging on every turn in the markets over the past 2+ years. The upside price move in early 2016 setup a very strong expectation that further upside price moves were about to result in an upside price explosion in metals. Remember, 2016 was a very big US Presidential election year. 2020, being the next big US Presidential election year, is only about 7 months away and the rancor has already started in the news cycles.
Our proprietary Fibonacci price modeling system is suggesting that Silver has set up an ABC bottom in Oct/Nov 2018 and has already initiated an A/B upside price leg that should result in a C or C/D/E price advance over the next few months. Our Fibonacci price modeling system is suggesting an upside price target of $22 per ounce for this move, which breaks the previous July 2016 highs of $21.22. We believe the ultimate upside target of this next bullish move is bear $28 to $29 based on longer-term Fibonacci price modeling.
Initially, this upside move must break the $16.30 level, which represents immediate resistance. Then, it must push above the $18.66 level, which represents secondary resistance. Once Silver passes the $18.66 level, the last leg higher will attempt to break the $21.22 level and push up into new recent highs (higher than the 2016 highs).
We believe the current US Presidential election cycle will be full of twists and turns – most of which will be very public and explosive. We believe this election cycle will create a certain level of fear in the markets that are above and beyond what we have seen over the past 15+ months. In a method that is very similar to what happened in 2016, the public will become entrenched in the election cycle process and the global economy may suffer slightly as the political shenanigans continue to play out on our TVs, newspapers and web browsers.
The October/December 2018 lows were, most likely, the lowest price levels we will see going forward. Additionally, the current price levels, below $15 per ounce, may be the last time we’ll have the opportunity to see prices this low in a number of years. Our price modeling is suggesting that Silver and Gold will begin a Momentum Base Rally from these lows that may last many years.
If you want to know when we get long Silver next be sure to join our Wealth Trading Newsletter and get our trading signals. In fact, we are giving away and shipping FREE Silver rounds for select membership levels for the next few days.
Chris Vermeulen
UNIQUE OPPORTUNITY
First, we typically see stocks sell-off and as the old saying goes, “Sell in May and Go Away!”
So what does this mean? It means we should start to see money flow into the safe-haven assets like the Utility sector, bonds, and most importantly precious metals.
Second, my birthday is this month, and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.
For May I am going to give away and ship out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter for the first 25 subscribers. You can upgrade to this longer-term subscription or if you are new, join one of these two plans, and you will receive:
1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)
2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)
I only have 25 silver rounds I’m giving away
so upgrade or join now before its too late!
SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!
Happy May Everyone!
Chris Vermeulen
The US Federal Reserve announced today they are leaving rates unchanged based on their latest meeting. The markets should take this as a sign of relief. Yet, hear all-time highs and expecting the Fed may actually decrease rates a bit, the market reacted with quiet price rotation near these highs.
The US Fed could have shaken up the markets even more, but we believe this move by the Fed will be interpreted as “Fed Uneasiness” with regards to the overall US and global economy at the moment. A failure to prompt a rate increase could be seen as weakness by the Fed and uneasiness over the fragility of the US and Global economies. Once this shake-out settles, the markets will go back to doing what the markets always do – interpreting future fair values.
The $INDU rotated much lower today, ending the day almost exactly at a key support channel level (the YELLOW line). Further price weakness could push the $INDU below $26,000 fairly easily if the current high price level is fragile and weak. Price rotation is one of the most basic aspects of all price activity. The price must rotate in order to establish new price highs or lows. As volatility decreased over the past 30+ days, it would not be unexpected to see price retest the $26,000 level, or lower, in an attempt to resume a price trend or re-establish price support before attempting another move higher.
The move in the NQ today was much broader than the move in the $INDU. The Technology heavy NASDAQ 100 rotated downward, below the historical price support channel, and is currently resting just above the previous all-time price high near $7724. Again, the Fed’s inaction may be interpreted as an expectation of market weakness over the next few months. Thus, traders reacted to this move by interpreting this weakness in the Fed to raise rates by selling.
Overall, leaving rates unchanged may be very healthy for the US and global economies. The US Dollar continues to strengthen and this shake-out may be just what is needed before the Summer season for the price to continue trending.
We’ve recently warned that the US major Indexes are nearing our Fibonacci upside price targets and that we believe the upside price move may continue for another 20+ days still. This current rotation may be very short-lived – possibly only 5~10 days of lower/sideways price action before trends resume an upside price bias. Time will tell.
Overall, our prediction that a shake-out was about to happen appears to be unfolding just days after we made the claim. Our longer-term analysis is still the same – continued upside price bias as earnings and fundamentals drive prices closer to our Fibonacci price targets before any bigger price reversal may set up sometime in July/Aug 2019.
UNIQUE OPPORTUNITY
First, we typically see stocks sell-off and as the old saying goes, “Sell in May and Go Away!”
So what does this mean? It means we should start to see money flow into the safe-haven assets like the Utility sector, bonds, and most importantly precious metals.
Second, my birthday is this month, and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.
For May I am going to give away and ship out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter for the first 25 subscribers. You can upgrade to this longer-term subscription or if you are new, join one of these two plans, and you will receive:
1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)
2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)
I only have 25 silver rounds I’m giving away
so upgrade or join now before its too late!
SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!
Happy May Everyone!
Chris Vermeulen
Now that most of the US Major Indexes have breached new all-time price highs, which we called over 5+ months ago, and many traders are starting to become concerned about how and where the markets may find resistance or begin to top, we are going to try to paint a very clear picture of the upside potential for the markets and why we believe volatility and price rotation may become a very big concern over the next few months. Our objective is to try to help you stay informed of pending market rotation and to alert you that we may be nearing a period within the US markets where increased volatility is very likely.
Longer term, many years into the future, our predictive modeling systems are suggesting this upside price swing is far from over. Our models suggest that price rotation will become a major factor over the next 12 to 15+ months – headed into the US Presidential election cycle of November 2020. Our models are suggesting that the second half of this year could present an incredible opportunity for skilled investors as price volatility/rotation provide bigger price swings. Additionally, our models suggest that early 2020 will provide even more opportunity for skilled traders who are able to understand the true price structure of the markets. Get ready, thing are about to get really interesting and if you are not following our research or a member of our services, you might want to think about joining soon.
We are focusing this research post on the NQ, ES and YM futures charts (Daily). We will include a longer-term YM chart near the end to highlight longer-term expectations. Let’s start with the NQ Daily chart.
The NQ Daily chart, below, highlights our ongoing research, shows the 2018 deep price rotational low and the incredible rally to new all-time highs recently. The most important aspect of this chart is the “Upside Target Zone” near the $8040 level and the fact that any rally to near these levels would represent an extended upside price rally near the upper range of the YELLOW price channel lines. We believe any immediate price rotation may end near the $7500 level (between the two Fibonacci Target levels near $7400 & $7600) and could represent a pretty big increase in price volatility.
This ES Daily chart highlights the different in capabilities between the NQ and the ES. While the NQ is already pushing into fairly stronger new price highs, the ES is struggling to get above the Sept/Oct 2018 highs and this is because very strong resistance is found between $2,872 and $2,928. It is very likely that the price volatility will increase near these highs as price becomes more active in an attempt to break through this resistance. It is also very likely that a downside price rotation may happen where price attempts to retest the $2,835 level (or lower) before finally pushing into a bigger upside price trend. The Upside Target Zone highs are just below $3,000. Therefore, we believe any move above $2,960 could represent an exhaustion top type of price formation.
This YM chart is set up very similarly to the ES chart. Historical price highs are acting as a very strong price ceiling. While the NQ is already pushing into fairly stronger new price highs, the YM continues to struggle to get above the Sept/Oct 2018 highs and this is because very strong resistance is found between 25,750 and 27,000. Please take notice of the very narrow resistance channel (BOX) on this chart that highlights where we believe true price support/resistance is located. We believe it is likely that a downside price rotation may happen where price attempts to retest the $26,000 level (or lower) before finally pushing into a bigger upside price trend.
As you can tell from our recent posts and this research, we believe price volatility is about to skyrocket higher as price rotates downward. Our predictive modeling systems are suggesting that we are nearing the end of this current upside move where a downward price move will establish a new price base and allow price to, eventually, push much higher – well above current all-time high levels.
We’ve issued research posts regarding Presidential election cycles and how, generally, stock market prices decline 6 to 24 months before any US Presidential election. We believe this pattern will continue this year and we are warning our followers to be prepared at this stage of the game. No, it will not be a massive market crash like 2008-09. It will be a downside price rotation that will present incredible opportunities for skilled traders. If you want more of our specialized insight and analysis, then please visit www.TheTechnicalTraders.com to learn how we help our members find success.
Lastly, we’ve included this Weekly YM chart to show you just how volatile the markets are right now. Pay very close attention to the Fibonacci Target Levels that are being drawn on this chart. The downside target levels range from $16,000 to $21,060. The upside target levels range from $30,000 to $32,435. Top to bottom, The Fibonacci price modeling system is suggesting a total volatility range of over $16,000 for the YM Weekly chart and this usually suggests we are about to enter a period of bigger price rotation and much higher price volatility.
Right now, we suggest that you review some of our most recent posts to see how we’ve been calling these market moves, visit www.TheTechnicalTraders.com/FreeResearch/. It is important for all of our followers to understand the risks of being complacent right now. The markets are about to enter a period of about 24+ months where incredible opportunities will become evident for skilled traders. If you know what is going to happen, you can find opportunities everywhere. If not, you are going to be on the wrong side of some very big moves.
Chris Vermeulen
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
The DOW Transportation Index continues to test resistance near $10,050 as earnings drive the NQ well past historical all-time highs. Our interest in the Transportation Index is because it acts as a fundamental indicator for the US and global economies in terms of future transportation/shipping expectations. When the Transportation Index rises, it is a good sign that business and consumers have faith in the future economy and the continued demand for goods to be supplied to retailers and distribution centers.
The fact that the TRAN is back to near December 2018 highs means we have reached an expected economic expansion level that equals that level just before Christmas 2018. A continued rally would push expectations even higher going into the Summer months. With earnings hitting the market hard today driving a strong rally in almost all the major US stock indexes, we are surprised that the TRAN did not move a bit higher on the news.
Should the resistance level near $11,050 continue to operate as a ceiling for the TRAN, we’ll know soon enough as price should begin to move back below $11,000 and possibly attempt to retest $10,800. A key Fibonacci trigger level currently rests near $10,800 that would indicate a potential for a new bearish trend if this level is broken.
This Weekly TRAN chart, below, highlights just how important the current resistance level really is. This $11,050 level actually plays a key role in the 2018 price rotation and is the key resistance level for the December 2018 rotation peak.
As we’ve continually suggested, Fibonacci price theory suggests that price must always attempt to establish new price highs or new price lows. If this new price high, above the $11,050 fails, then price should attempt to rotate lower and attempt to break the $10,000 low level created in early April 2019.
We suggest traders take a very cautious long-biased stance in the markets right now. Weakness could come out of the shadows fairly quickly as earnings hit. The Iran Oil news hit the markets quickly on Monday. We could wake up to some dire earnings news this week that could send the markets lower and push some of these resistance levels into a topping formation.
Additionally, as you look at this Weekly chart, pay attention to the fact that we could be setting up a Right Shoulder of a Head-n-Shoulders pattern if new all-time highs are not reached. There are many ways to attempt to read this chart and the TRAN should lead the markets if a price move does breakout.
Our research says we should continue to see an upward price bias for at least another 10~35+ days before any real sign of weakness shows up. We are still urging traders to take a very cautious approach to their trading until we see the TRAN break to new highs. We feel it is wise to trade this area very cautiously over the next 30+ days.
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Chris Vermeulen
One of the most important things about making calls about any future price movement is to have confidence in your research team and systems. The second most important thing is to make these calls public so everyone can see if you were right or wrong about your predictions. Predicting the future, often many months in advance, is not an easy task. We like to ask people, how many people do you know that can predict something in the future, almost to the exact day, and find they were accurate more often than being wrong?
Well, this is the time we’ll see if our predictions are accurate or not. Back in October 2018, we issued a research post indicating that Gold would rally above $1300, then stall, then set up a momentum base between $1260 and $1275 near mid-April or early May. Here is a link to that public post: https://www.thetechnicaltraders.com/45-days-until-a-multi-year-breakout-for-precious-metals/
In February/March 2019, our research team honed in on the April 21~24 dates as a key cycle date for a very likely momentum bottom setup. You can read our research here. We believe these dates will be key to the future rally in Gold and they may very well be the last time we see sub-$1300 price levels for a while, but gold does need to reverse to the upside this week.
Currently, Gold is trading at $1278.10 with a recent low at $1273. Remember our original prediction that the momentum base would likely setup between $1260 and $1275? Right now, we believe this Momentum base is setting up exactly as we predicted back in October 2018 – over 6 months ago.
As we continue to watch this Momentum Base setup play out, we urge skilled traders to watch the outlying symbols for signs of confirmation and validation. The news about the Iran Oil Sanctions, today, may become a key element going forward – but it is too early to tell right now. We believe some global economic event will drive prices of Gold much higher over the next 30+ days.
Gold has moved lower over the past 30+ days from the $1340 level down to near the $1270 level – just as we predicted as well. The timing of this recent downswing in price is perfect for our April 21~24 Momentum Base call. We do believe there is still a chance that a $1255 to $1260 level may be seen this week or next. The Momentum Bottom/Basing formation may form over a 7 to 10+ day range. So, pay attention to these opportunities in Gold over the next few days and weeks.
NUGT (3x gold miners bull ETF) continues to fall as Gold Bases. In fact, NUGT has fallen to levels that we have not seen since January 2019. The reality of the matter is that NUGT may be the best confirmation tool/symbol we have right now for timing the end of our Momentum Base in Gold. When NUGT rotates higher and forms the base, it will very likely mark the end of weaker prices for the entire precious metals sector and the beginning of the upside price rally we have been predicting.
As our research team likes to state – this is “do or die” time with regards to our predictions from many months ago. We’ve stuck by them for months, telling anyone who would listen this setup would be the last time you see sub-$1300 levels in Gold for many months – possibly years. If our analysis is correct, we suggest you pay attention to these symbols and lower Gold price levels right now. Once this move begins to rally, it could take the markets by surprise.
Our expectations are that by mid-May, or so, we should already be in an upside price swing that should be targeting the $1450 to $1550 level. This means we have about 7 to 15 trading days until we start to see some real upside price move in precious metals.
We should remind you that gold needs to find a bottom this week and price could become choppy and volatile.
Get ready and follow our research. How many other research firms do you know that are capable of calling the markets 6+ months in advance with this type of accuracy?
Please visit www.TheTechnicalTraders.com to learn how we can help you find and execute better trades for your future.
Chris Vermeulen
We know many of you follow our research posts and have been waiting for the Gold/Silver setup we predicted would happen near April 21~24, 2019 back in January 2019. Well, it looks like our predictions were accurate and the current downward price rotation in Gold/Silver are the opportunities of a lifetime for precious metals traders.
Our original research regarding the predicted Gold price rotation and breakout initially posted in October 2018 and was updated in January 2019. You can read our updated post here.
This research suggested, back in October 2018, that gold would rally above $1300, then stall and setup a momentum base near April 21~24, 2019. Currently, we are actively seeking entry positions in Gold, Silver and many other stock market sectors related to the metals and miners.
We’ll start by highlighting the Gold to Silver price ratio. When this ration moves well above 80, it is generally considered a long term buy trigger. The reason for this is that this ratio attempt to reflect the price of Silver to the price of Gold. When this level reaches above 80, it traditionally reflects an extremely cheap price ratio for both Gold and Silver and usually prompts a big price advance in the near future.
Taking a look at historical price moves for both Gold and Silver, we fall back to the big upward price advance that began after the 2009 market crash. One thing that all traders and investors must understand is that, currently, Silver presents an incredible opportunity for bigger returns than Gold. Yes, Gold will likely rally higher and provide an incredible opportunity for upside gains. Yet, historically, Silver begins to move a bit later than Gold does and the upside potential of Silver tends to be 40~70% greater than the upside potential for Gold.
Take a look at this comparison chart, below, of the 2009 to 2011 price move. Gold shot up nearly 100% – as shown on the chart. Silver shot up over 150% when the breakout move happened a bit after the Gold move started. We expect the same type of price advance pattern in the near future. We expect Gold to begin the move higher and Silver to lag behind this upside move a bit – possibly for a few months. Eventually, Silver will break to new multi-year highs and could rally 130% to 220% above current levels – possibly higher.
Over the next few months, we believe increased volatility in the US stock market may drive prices a bit lower as price rotates near all-time highs. We believe this rotation, coupled with foreign market concerns (think Brexit, Europe, China, South America) as well as the US Election cycle may cause the markets to enter a period of stagnation and sideways trading. These impulses may become a catalyst for precious metals to break recent highs and begin an upward price advance as a general increase in FEAR settles into the global markets.
We do believe Gold and Silver will likely move a bit higher over the next 30+ days as the US stock markets continue to push higher towards new all-time highs. Yet, if the volatility increases, as we expect, and a bigger price rotation takes place (see the chart below), we believe Gold and Silver may experience another price drop to near or below current levels before a massive upside breakout move begins. Historically, the price of Gold contracts throughout the initial price correction phase of the S&P500 and begins to accelerate upward near the end of a correction phase. This is because investors and traders are typically shocked to see the correction take place and move into a protective mode as true fear sets in. When fear subsides, traders move out of precious metals and back into stocks.
Our current expectations are that Gold will continue to push lower, below $1275, in an attempt to establish our April 21~24 momentum base. This base should be at or near ultimate lows for the price of Gold and we would expect a pennant or sideways price channel to complete this bottoming formation. Ideally, any price move below $1250 is a gift for skilled traders. We’ll just have to wait to see where this bottom sets up before we know just how low Gold will fall before the next leg higher.
We believe the next upside price leg in Gold will push prices above $1400 initially, likely in May or June 2019. After that peak is reached, we believe a period of rotation and a potential for a price decline is very real. We believe this next leg higher will really to levels above $1400, then price will stall and retrace – possibly retracing back to levels below $1300 again. It would be at that point that skilled traders should consider this the last opportunity for long entries before the bigger move to the upside.
Our research into this move, which initiated back in October 2018, has called these rotations almost perfectly. If our newest research is correct, you will have at least two opportunities to enter fantastic long trades in Gold and Silver, one setup hitting between April 21 and April 28 and another setup after the initial upside price rally retraces (likely in June or July 2019). After that last retracement, we believe the bigger upside rally will begin and both Gold and Silver will initiate a rally that could be an opportunity of a lifetime for skilled traders.
Follow our research by visiting www.TheTechnicalTraders.com to learn how we can help you find and execute better trades in 2019 and beyond.
Chris Vermeulen