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Critical Price Level Could Prompt A Big Move After Holiday

As technical traders and researchers, we’ve been paying very close attention to the GREEN ARC Fibonacci resistance level on the SPY as a key level for the US stock market and any hope of a continued upside price rally.  The SPY has traded near this level for the past three weeks and appears to be attempting a bit of an upside breakout right now.  Yet, we understand a long holiday weekend is upon us in the US, Memorial Day, and after a big upside GAP on Monday, the US stock market has stalled over the past few days.

Our researchers believe this GREEN ARC is still acting as critical price resistance and believe the SPY may sell off into the end of the week resulting in a failed attempt to breach this key resistance level.  If this happens, the failed attempt to break this resistance could prompt a change in price trend and initiate a new downside price trend.  If this resistance level is broken by the end of this week, then we have a pretty solid indicator that continued bullish price trending may continue.

Absent of any real news that may drive the market trend this holiday weekend and with most of the US still in shutdown mode, we believe the US stock market has continued to trade within this no man’s land area for many weeks now.  From the end of April till now, we’ve seen moderate upside price action in certain sectors, yet other sectors continue to show signs of weakness.

SPDR S&P500 ETF WEEKLY CHART

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TRANSPORTATION INDEX WEEKLY CHART

This Transportation Index Weekly chart is a perfect example of the weakness that is evident away from the S&P500, NASDAQ, and Dow Industrials.  Compare the last 6+ weeks of trading on this TRAN chart to the SPY chart above.  Notice that the TRAN chart shows a very congested sideways price channel (highlighted in YELLOW) as well as a much deeper upside price move from the lows near March 20.  While the US major indexes have rallied substantially, the broader market indexes are not experiencing the upside price advance and continue to suggest overall weakness.

This disconnect in the markets suggests speculation is driving the US major indexes higher and not real fundamental appreciation based on earnings and revenues.  When this speculation ends, typically when speculators realize the price has been driven a bit too high compared to reality, then the trend can change in an instant.

ISHARES RUSSELL 2000 ETF WEEKLY CHART

This IWM Russell 2000 ETF Weekly chart highlights a similarly week upside price rally since the March 20th bottom.  The WHITE LINE on this chart represents a support/resistance level from early trading low price levels in 2017.  Our research team believes these levels represent a very important support/resistance level for the Russell 2000 ETF as this level coincides with the GAP in price that was generated within the recent selloff on March 9, 2020.  That GAP cleared this key support/resistance level with a very big downside price move.  We believe this level will act as intense resistance as price attempts to fill the GAP.

CONCLUDING THOUGHTS:

Overall, the US stock market has continued to trade within this no man’s land recently.  There have been some pretty decent upside price moves in certain sectors over the past few weeks.  Precious metals, certain travel/leisure stocks, and, of course, technology and services stocks.  Yet, we continue to warn our friends and followers to be very aware that the US stock market is far from immune to more downside price activity.  A deep selloff like we experienced will very often react with a “recovery move” – a dead cat bounce type of move.  While the NQ has been a big mover, these other sectors suggest we may be nearing a tipping point and we urge technical traders to stay very aware of the risks as we head into this long holiday weekend.

I’ve been trading since 1997 and I’ve lived through numerous market events.  The one thing I teach my members is that risk is always a big part of trading and that’s why I structure all of my research and trading signals around “finding profits while reducing overall risks”.  Sure, there are fast profits to be made in these wild market swings, but those types of trades are extremely risky for most people – and I don’t know of anyone that wants to risk 50 or 60% of their assets on a few wild trades.

You don’t have to spend days or weeks trying to learn my system.  You don’t have to try to learn to make these decisions on your own or follow the markets 24/7 – I do that for you.  All you have to do is follow my research and trading signals and start benefiting from my research and trades.  My new mobile app makes it simple – download the app, sign in and everything is delivered to your phone, tablet, or desktop.

Please take a moment to visit www.TheTechnicalTraders.com to learn more.  I can’t say it any better than this…  I want to help you create success while helping you protect and preserve your wealth – it’s that simple.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

US Markets, Metals, and Oil

Cory Fleck and Chris Vermeulen share their outlook and trading strategy for US markets, precious metals, and the oil price. When it comes to US markets the biggest question is – Do the US markets have another leg higher in them? After the pop on Monday, there are some near term levels to watch.

If you are using our free public research for your own trading decision-making and/or using it as an opportunity to find and execute successful trades, please remember you are the one ultimately making the decisions to trade based on our interpretation and free research posts.  We, as technical traders, will continue to post new research articles and content that we believe is relevant to the current market setups.

If you want to improve your accuracy and opportunities for success, then we urge you to visit www.TheTechnicalTraders.com to learn how you can enjoy our research and our members-only trading triggers (see the first chart in this article).  If you are managing your retirement account or 401k, then we urge you to visit www.TheTechnicalInvestor.com to learn how to protect your assets and grow your wealth using our proprietary longer-term modeling systems.  Our goal is to help you find and create success – not to confuse you.

Our researchers will generate free research on just about any topic that interests them.  As technical traders, we follow price, predict future price moves, tops, bottoms, and trends, and attempt to highlight incredible setups that exist on the charts.  What you do with it is up to you.  Visit www.TheTechnicalTraders.com/FreeResearch/ to review all of our detailed free research posts.

In closing, we would like to suggest that the next 5+ years are going to be incredible opportunities for skilled traders.  Remember, we’ve already mapped out price trends 10+ years into the future that we expect based on our advanced predictive modeling tools.  If our analysis is correct, skilled traders will be able to make a small fortune trading these trends and Metals will skyrocket.  The only way you’ll know which trades to take or not is to become a member.

Chris Vermeulen
Chief Market Strategist
Founder of Technical Traders Ltd.

Where’s the Bottom? – Cycles Paint A Clear Picture

Has the selloff ended?  When will it end?  What will the bottom look like and am I at risk of taking further losses?  What should I do?

Do you want to take a guess at how many of our friends and family members are calling us over the past week or so asking these questions?  Personally, I get bombarded with dozens of emails every day from friends and other family members asking “where’s the bottom?  What should I do?”.

This post is going to help you understand the structure of the markets and what is really happening.  Price always attempts to seek out new price highs or new price lows.  In this case, we are seeking out new price lows with a downside price rotation.  Price structure, which is normally discussed in Elliot Wave structures is the process of setting up new higher high or lower low waves as price rotates in a defined wave structure.  Keep in mind the broader wave structure that is currently unfolding.

Over the past 16+ months, we’ve suggested that the price rotation in 2018 was a Wave 4 downside price rotation of a Wave C upside price structure.  If our analysis is correct, the last rally we just experienced (ending near February 1, 2020) was the end of a Wave 5 upside price move that completed the Wave C upside price structure.  This would indicate a very real possibility that the current downside price trend is a Wave 4 downside price move.

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For readers that are not familiar with the Elliot Wave process/structure, each major wave (1 through 5 or A through C) can consist of various types of minor wave structures (as you can see from the middle chart in the example above.  The major wave 1 could consist of a 5 wave minor wave structure (as shown).  The major wave 2 could consist of a 3 wave minor wave structure (as shown) or even a downside 5 wave structure.

Going even further, each of these minor wave structure could consist of even smaller price wave structures.  These types of price rotations often populate in 1, 3, 5, 7, 9, 13 and 21 wave structures.  Unlocking the major wave count and minor wave count can help us unlock swing trading and day trading opportunities.

So, to put into context what we are attempting to convey to you is that we believe the peak in early February 2020 was the end of a major wave 3 and the start of a major wave 4 (to the downside).  Because the upside price wave 3 originated after the 2009-10 price bottom, we believe true support in the markets is likely the midpoint of the 2018 price rotation range or near the low price levels of 2018.  These price levels represent a very clear support level and low price target level that continues to follow the price structure rules of Fibonacci and Elliot Wave.  If the 2018 lows are breached and the markets continue to push lower, then we fall back to the 2016 price lows and midpoint level.

WEEKLY YM CHART – DOW JONES

This Weekly YM chart highlights the two lower MAGENTA lines that we believe represent clear price support for the Dow Jones (24,000 & 21,450).  At this point, the YM has already moved below the 24,000 level and closed trading on Monday, March 9, near 23,900.  Although this price level has breached the 24,000 level, we do not consider “support” a hard level (like concrete).  It is like water in many cases and it matters what price does when it reaches this level.  If price finds support near this level, it will begin to bottom out and potentially trade sideways before attempting to move higher.  If not, the price may stall near this 24,000 level before breaking down to the 21,450 level (or lower).

We do believe the INDU/YM will put in a bottom before the ES and NQ do.  Thus, we believe support will be found in the INDU/YM well before support is found in the other major US stock market indexes.

SPY WEEKLY CHART – S&P 500

This SPY Weekly chart highlights the same setup with the two MAGENTA lines we’ve drawn.  The first level of support for SPY is $261~$262.  We believe this midpoint of 2018 high to the low trading range will offer a fairly strong support level for the SPY to attempt to set up a price bottom.  Below that, the $234 level (the lower range of the 2018 trading year) would provide very clear support for the SPY.

The same type of price theory and expectations are at play on this chart as with the YM chart above.  The YM has already reached our first level of support, yet the SPY is still $12 away from this first support level.  This would suggest the YM may begin to set up some type of price support while the SPY may continue to trail a bit lower over time.

If this first level of support does not hold, then we would be looking for the 2018 price low levels (near $234) to become the next target for support.  Ultimately, the price must either continue to attempt to break previous low price points as it attempts to establish “new price lows” or, at some point, it will fail to break past lows and that is where it will find support.  The midpoint, often called the “belt line” (a Japanese Candlestick term) is used by technicians for two reasons: first, it represents 50% of a defined price range and, second, Japanese Candlestick theory teaches us the BeltLine is “the center of control” or price.  Once price breaks this level, then further trending may continue.

NQ WEEKLY CHART – NASDAQ

Lastly, this NQ Weekly chart with the three MAGENTA lines drawn on it.  The top line is the 2018 price peak level.  The middle line is the midpoint of the 2018 trading range.  The lower line is the bottom of the 2018 trading range.

The NQ has been the high-flying sector in the US stock market for many months.  You can see the massive rally that took place near the end of 2019 pushing the NQ up to nearly 10,000 before the recent correction.  Compared to the YM and SPY charts, it is easy to see the NQ rallied much stronger than the others.  This is why we believe the downside price move in the NQ could also be far greater in scope than the YM or SPY.

If the NQ falls to our midpoint level (near 6795), the NQ must call another -1100 points to reach this level.  Whereas the YM has already reached this critical price level and the SPY is only about $12 away from that same level.  Therefore, the NQ, in our opinion, could continue to trend broadly lower throughout Q1 and possibly into Q2 before finding any real support.

The low price range of 2018 puts final support for the NQ near 5,832.  From current levels, if price falls to this support level, it would total an additional -2066 point decline (-26.11%).  It would also represent a massive -40% selloff from the peak set in February 2020 (near 9763).

Where’s the bottom?  What’s next?  Our advice would be NOT to chase this selloff and NOT to attempt to bottom pick this move.  We believe the Covid-19 virus event will last well past April/May 2020 and we believe both Q1 and Q2 results will be far below expectations.  Therefore, we don’t believe any real bottom will setup before May, June or July of 2020 – after Q2 earnings are announced and contingent on the virus event subsiding and earnings starting to recover.  Otherwise, we could be “searching for a bottom” for quite a while yet.

Still, massive price rotations are taking place in the major markets and various sectors.  If you are a skilled trader and are able to manage risk properly, you should be able to identify multiple opportunities over the next 90+ days for incredible trades.  We know we certainly are finding them.

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 short-term swing traders.

Visit my ETF Wealth Building Newsletter and if you like what I offer, and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
www.TheTechnicalTraders.com

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.

Vix Warns Of Imminent Market Correction

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX.  These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance.  This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. You can get all of my trade ideas by opting into my free market trend signals newsletter.

VIX VALUE DROPS BEFORE MONTHLY EXPIRATION

When the VIX falls to levels below 12~13, this typically very low level is usually associated with an extreme peak in price.  Throughout history, after the VIX has collapsed to these types of low price levels, the markets have a tendency to revert/correct in ranges that are typically in excess of 3.5% to 5.5%. In some cases, these corrections have been as large as 11% to 18% or more.

CURRENT CONTINOUS VIX PRICE CHART

The current VIX level, near 12, is near the lowest historical levels of the past 12 months.  Every time the VIX has fallen to near these levels, a peak in price has set up within just a few days potentially.  Each time this setup has occurred, the price has rotated/corrected downward by at least 5.5%.  Is that about to happen again in the US markets?

CUSTOM MARKET CAP INDEX

Our custom Market Cap Index is also suggesting a market peak has setup and that price may likely revert to lower levels. Historically, when the price reaches these extreme price ranges, a rotation/reversion price event takes place.  We believe a price reversion may be setting up in the US/Global markets that traders may not be prepared for.  The current rally in the US stock market suggests a broader market rotation may take place.  This suggests a deeper reversion event may be setting up.

Last week I talked about the 3-year record high outflows in the GLD gold bullion ETF and how it’s warning us that investors are not fearful of falling stock prices. This along with the vix, and our custom index paint a clear contrarian signal that a top is near!

CONCLUDING THOUGHTS:

As we near the end of 2019, the current bullish price trend may come to a dramatic end as the VIX charts and our custom Index charts suggest the US/Global markets may have reached levels that support a price rotation/reversion event may be setting up.  Traders need to be prepared for the risks associated with such an event and plan for extended risks.

If you find this type of analysis interesting be sure to video my website to learn more about how you take full advantage of this analysis every week at www.TheTechnicalTraders.com

Chris Vermeulen
Technical Traders Ltd.

Could Hong Kong Disrupt China & The Global Markets Further?

Reading the news this weekend and watching the chaos in Hong Kong, one has to wonder how this violence and disruption in commerce is really affecting the Asian and global markets.  Many different news sources are already reporting that Chinese economic data continues to show weakness over the past 4 to 5+ months. Additionally, Hong Kong, being a strategic source of income and business for the western world, has been disrupted with riots, protests and not violence as a result of a political battle between Chinese rulers and local Hong Kong residents. It seems obvious to anyone outside of this situation that neither side is about to stop their actions any time soon and that means we are going to experience even further disruptions to the global markets and local markets.  Right now, our greatest concern is that the disruption in economic activity in China/Asia will result in a “cold” in the US and other foreign markets. Our August 19th call for a potential US market breakdown was stalled because of recent news that China and the US would begin talks again attempting to resolve the trade issues.  Yet, we know these talks may last many months with no real progress in terms of lifting tariffs or real concrete outcomes.  We don’t believe the US is going to remove tariffs or ease up on trade-related factors until we see real progress made by China.  This would suggest we are in for a long-haul in terms of real relief in the markets. Our research team still stands behind our August 19th breakdown call.  Our super-cycle research suggests that the US and global markets are poised for a price breakdown and we believe the recent news events have stalled this price move.  Particularly, we point to the nearly -1100 point price drop on August 22 through 26, just days before the news that China was willing to engage in new talks with the US about trade.  This move would have likely continued to break lower, as we predicted, had the Chinese not announced their intent to try to relieve pressures on the economy and the global economy. Before we get into more details, be sure to opt-in to our Free Market Forecast and Trade Ideas Newsletter We may have to give the Chinese credit for moving the markets by simply making an announcement that they were “willing” to engage in talks at a critical time when a price breakdown appeared to be executing.  That one statement changed the way the markets perceived the future.  Global traders rotated to a perspective of “hey – maybe the Chinese are finally going to negotiate a solution”.  We believe this is a stall tactic while the Chinese attempt to work another angle to protect their markets/assets.

Hang Seng Index Weekly Chart

The Hang Seng Index Weekly chart highlights the extreme weakness of price over the past 12+ week.  A dramatic downturn from $30,000 to $25,725 has transpired and support near a previous trend channel is now acting as a final floor for price.  Once this level is broken, we believe the Hang Seng Index could fall to $21,500 or much lower and set off a wave of corporate bankruptcies and bond defaults.

Custom Smart Cash Index Weekly Chart

Our Custom Smart Cash Index Weekly chart is set up in a similar format.  It shows that the peak in value near early 2018 was the true peak in economic activity and price valuation.  Everything beyond that peak has resulted in weaker and more contracted price moves.  This suggests global traders have already been pulling capital out of the markets in preparation for some type of price correction.  It certainly does not align with the most recent “new price highs” in 2019 for many of the US major Indexes.

YANG Fibonacci 100% Measured Move

We believe a very strong potential for a Fibonacci 100% measured move in YANG ETF exists on a price breakdown as a result of the chaos and turmoil that will likely continue in Hong Kong and China.  We’ve seen at least two of these 100% measured moves complete over the past 6 months and our Fibonacci price modeling system is suggesting a target level above $75 which happens to align with another 100% Fibonacci measured move. Current support near $55 would be an excellent area for a stop level and targets near $65 & $72 would be appropriate for skilled technical traders.  The risk at this time is related to the support level near $55 and the potential for some positive outcome in Hong Kong or other trade-related news.  Any further deterioration of the situation in Hong Kong could result in a very quick price drop in the Asian markets.

CONCLUDING THOUGHTS:

As we’ve been suggesting for more than 12 months, 2019 and 2020 are going to be fantastic years for skilled technical traders.  The potential for big trades (20% or more), like this YANG trade, will continue to set up in different sectors and global markets.  All we need to do is stay on top of the opportunities to find ways to profit from these moves. 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 our super-cycle research and other proprietary modeling systems are suggesting that price weakness will dominate the markets for the next few months. 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

Markets Ready to Pop, But Up or Down?

CONCLUDING THOUGHTS:

Be sure to opt-in to our free market forecast newsletter Ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. 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. 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 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

US Fed Set To Rattle Global Markets – Part I

With less than 24 hours to go before the US Fed rate decision announcement, all eyes are watching how the US stock market is reacting to the possibility of a rate cut (25 basis point) that has been telegraphed by the US fed many weeks in advance. Almost as if the US stock market is moving against all odds, the S&P and NASDAQ have pushed higher into new all-time high territory while the Dow Jones index currently trades just below recent highs.  What should traders expect with the Fed announcement and beyond?

Probability of Rate Cut Percent

First, we need to understand the global markets have already priced a 25 basis point rate decrease into the markets based on expectations.  The CME Fed expectations data suggests the market is 78.1% confident that a 25 basis point rate decrease will happen.
Source (CME) This suggests that global traders are already prepared for this move and we may not see much volatility if the US Fed does not surprise anyone with their language/future expectations. We believe the US Fed is taking this rate decrease to ease the supply of US Dollars throughout the world.  Over the past 18+ months, the strength of the US Dollar has prompted a shift away from weaker global economies and into the US equities market, US Treasuries and the US Dollar.  We believe this shift is reaching a critical moment in time where the fragility of the foreign markets has reached a tipping point.

Weekly US Dollar chart

You can see from this Weekly US Dollar chart that the rally from the bottom in early 2018 has been tremendous – +11.25% and climbing.  While this US Dollar rally has taken place, many foreign currencies have continued to weaken while the global economy has recently slowed to a crawl.  As long as the US Dollar stays within the magenta price channel moving forward, we expect this trend to continue.
The shift in how capital is being deployed and the stress that continues throughout the globe with regards to economic activity and output is related to something that we believe took place back in 2007 through 2016 – the global effort to support a very weak global economy. We highlighted some of our thoughts in this recent research post about the black hold in global banking. Overall, we believe the actions by the global central banks and the US Fed from 2007 till 2016 created a “setup” in the global markets that very few people foresaw or understood.  This shift happened at a pace and fever that few people could comprehend and came to a head in November 2016 when President Trump was elected.  We believe it happened somewhat like this… 2004~2006: Greenspan raises rates on an unprecedented scale (over 450%) pushing the US/global banking/credit sector into crisis in 2007-08 2008~2010: As the biggest global banking/credit crisis unfolds, the US Fed and global central banks do everything possible to save the world from decades of economic malaise and destruction.  US Fed lowers interest rates to near ZERO creating a run on US dollar debt/credit.

The Current Market Setup

2011~2015: As foreign market engages in debt/credit expansion, infrastructure projects and an “easy money” rally mode, something begins to change in 2014~2015.  China realizes the nation’s wealth is being exported to the US and other markets as well as a US stock market rotation that shocked the global investors. 2016~2017: The US Elections (2016) took the focus away from the global markets for a period of 15+ months and allowed the easy US Dollar trading activities to continue into hyperspace.  This is when many foreign nations/companies took huge risks leveraging debt and success into future debt/risks based on a belief that “this success will never end”.

Then This Happened…

January 2017: President Trump is sworn in and the US Fed begins raising rates aggressively.  The disruption that resulted from this 2017 combination event resulting in one of the largest “global unwinding” processes we’ve seen in quite a while and it has really only just begun. The downward rotation in the US Dollar in early 2017 as a result of uncertainty in US policy and perceived strength in foreign markets as US interest rates were still relatively low – under 1.4% most of that time.  After US FFR rates crossed above the 1.75% level, the easy US Dollar carry trade became much more difficult to maintain and foreign investors had already setup trillions in debts expecting the US Fed to maintain easy money policies for decades.
Source: https://fred.stlouisfed.org/series/EFFR What is the US Fed expected to do at this time?  Either they lower the FFR so that the global markets can continue to run their credit/debt functions and attempt to deleverage the “setup” over the next 5+ years or the US Fed risks creating a run-away train type of scenario where foreign central banks lack the ammo to support their own economies and the US Fed risks creating hyper-inflation by not acting accordingly.  In short, the US Fed to the global bankers rescues again. Well, here we go with the US Fed setting the policy and expectations for the future as this incredible 1800% FFR rate increase has pushed the global markets into potential turmoil.  We’ll complete our research in the second half of this research post in a few hours stay tuned!

CRUCIAL 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.

FREE GOLD OR SILVER WITH MEMBERSHIP!

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

US Dollar Strength Will Drive Markets Higher

Almost counter to current institutional thinking, the strength in the US Dollar will likely continue to push the US stock market higher over the next few weeks/months and act as a supporting price bias in any event of a short term global/us stock market price collapse.  Many traders/investors fail to understand the capacity of the US Dollar to wreak havoc on foreign markets as well as to act as a support level for US equities and US investments. The support level near $96 is currently acting as a solid price floor.  Our researchers believe an attempt to breach the $99 level will happen soon and this continued strength will put further pressures on foreign currencies, commodities, metals and trade issues.
These shifting dynamics of the currency markets are presenting very clear evidence that investors believe stronger, more mature economies are going to continue to perform over the future months that weaker, more at-risk economies.  The Japanese Yen, Canadian Dollar, Swiss Franc, and US Dollar are all performing quite well in this Year-To-Date comparison graph (below).  The New Zealand Dollar, Euro, British Pound, and Australian Dollar are all dramatically weaker.
Our research team put this comparison chart together to further illustrate the weakness of Asian currencies in relation to the relative strength of the US and major global currencies.  This chart attempt to compare currency strength by grouping relative currency pairs and comparing them as an Asian Currency Group vs a Global Major Currency Group.  As price advances, the Asian Currency Group is relatively stronger overall.  As price declines, the Asian Currency Group is weakening and the Global Major Currency Group is strengthening. Currently, this chart shows the fragility of the Asian Currency Group.  Any break of the lower price channel level and we enter a new downside price trend that may attempt to establish a much lower price support channel for Asian Currencies, Asian Stock Markets, and the overall global markets.
Our researchers believe the continued strength of the US Dollar and the US stock market are pushing historical normal price ranges beyond expected boundaries.  As gold increases because of fear and greed, countries with larger gold reserves can attempt to offset certain losses from currency and economic weakness.  Yet companies and governments that attempted to leverage the “Dollar Carry Trade” environment from years ago may find themselves in very dangerous territory as Asian currencies continue to weaken. A stronger US Dollar will attempt to mute the upside price activity of Gold and Silver while pushing these currencies into deeper and deeper valuation declines.  See our recent charts and short term dollar/gold forecast here. A continued shifting of capital away from “at-risk” economies/nations could push these currencies into a death spiral type of free-fall over time.
We believe the US Dollar will continue to move moderately higher over the next 4+ weeks and likely attempt to move towards the $99 price level.  This move will somewhat mute the advance of Gold and Silver, yet we believe the weakness that is likely to unfold in the foreign currency markets will prompt renewed fear and greed – pushing Gold prices much higher – even as the US Dollar continues to strengthen. Once the XAUUSD level breaks the $1440 level – it should rally up to the $1615 to $1625 level very quickly.  This would likely be the breaking point for the Asian currencies as well.  A move like that would likely push these Asian currencies below historical price envelopes and create a panic-type of a capital shift away from risk.
Our research team believes this move will likely happen sometime between Mid-August and early September 2019.  This means we are only about 35 to 45 days away from an incredibly volatile price swing in the global markets.  This is something that most traders/investors have failed to even begin to comprehend or consider. What would happen if the Asian capital markets and currencies collapsed on broad weakness and a major credit/debt crisis event?  An event where currencies devalue to a level that suggests forward operations are severely threatened, the rising price of Gold is not offsetting losses and commodity prices collapse pushing even further pressures on commodity/currency backed loans/debt? Be prepared for these incredible price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our  Wealth Building & Global Financial Reset Newsletter.  You won’t want to miss this big move, folks.  As you can see from our research, everything has been setting up for this move for many months – most traders/investors have simply not been looking for it. Join me with a 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a 1oz Silver Round or Gold Bar Shipped To You Free. I can tell you that huge moves are about to start unfolding not only in currencies, metals, or stocks but globally and some of these supercycles are going to last years. A gentleman by the name of Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. 2020 Cycles – The Greatest Opportunity Of Your Lifetime As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly. I’M GIVING THIS GOLD BAR AWAY WITH 2-YEAR MEMBERSHIPS AND 1OZ SILVER ROUND TO 1 YEAR SUBSCRIBERS
So kill two birds with one stone and subscribe for two years to get your FREE GOLD BAR and enough trades to profit through the next metals bull market and financial crisis! SUBSCRIBE -> STACK GOLD BAR -> GET WINNING TRADES Chris Vermeulen – www.TheTechnicalTraders.com

Precious Metals Breakout Rally or Reversal Time?

We have a good pulse on the major markets and can profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts.

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these super cycles are going to last years. These super cycles starting to take place will go into 2020 and beyond which we lay out in our new PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime

I am going to give away and ship out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. You can upgrade to this longer-term subscription or if you are new, join one of these two plans listed below, and you will receive:

1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)

2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)

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Chris Vermeulen
Founder of Technical Traders Ltd.