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US Fed Leaves Rates Unchanged – The Shake-Out Begins

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

How Close Are The Markets From Topping?

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

Financials Setting Up An Island Top Formation

As we continue to scan the charts for setups and trigger to alert our followers, we’ve come across a setup that may be more ominous than what it appears.  Recently we’ve posted articles about how the SPY and the NQ have pushed into new all-time high price territory and how Gold is setting up for a momentum base that should launch precious metals to near highs.  We’ve also discussed how we believe the current upside price bias in the US stock markets should last another 10~35+ days before new price weakness sets up – possibly pushing prices lower in late May or early June 2019.

Our research team has been scanning the charts looking for anything that could give us an edge to the potential setup for this price weakness in the future.  We believe the Transportation Index and the Financials could be keys to understanding how far the upside rally can continue and when a price peak may begin to warn of a potential price top or rollover.

An Island Top is a pattern that sets up with an upside price gap followed by sideways price action above that gap.  In theory, this type of setup should promote the gap to be filled with downside price action before any further upside price move can continue.  Although, gaps to the upside are fairly common in strong uptrends.  Given the strength of the earnings data released early this week and the expectations that we have for some continued upside price bias over the next 10~35+ days, we are watching these Island Top formation in the Financials for any signs of weakness to alert our followers.

This Daily FAS chart highlights the GAP as well as the Resistance levels that are currently acting as a ceiling.  A breakout above the resistance level would indicate that we have more room to run higher.  Any failed breakout to the upside, where price briefly rallies above the resistance level, then falls back below it, would be a pretty strong indication of a rotational peak.  The Financials could fall 10% from current levels and still be within the range of the March/April lows.  It would take a much bigger move to qualify as a breakdown bearish trend.

 

This Daily XLF chart highlights a similar pattern to the FAS chart.  The key element of the XLF chart is that the Resistance level provides more key fundamental price peaks than the FAS chart.  On this XLF chart, we can see that the current Resistance level aligns perfectly with the Nov/Dec 2018 highs.  We can also see a short GREEN Fibonacci trigger level line in early March 2019 above the Resistance level.  That Fibonacci trigger level is still valid and any move above that level would constitute a new bullish price trend trigger.

Any failure to break the Resistance level would qualify as a price rotation to fill the GAP and potentially set up a move back to near $25 looking to find new support.  Overall, the Financials are poised for a move – up or down.  Our research suggests the US stock market is not done rising, thus we are concerned that certain sectors may begin to show signs of weakness as the broader market continues to rise.

 

Our research team believes a critical peak formation is likely near the end of May or in early June 2019.  It is because of this belief that we are warning traders to play the next 15~25+ days very cautiously.  Watch the Financials, the Transportation Index, the US Dollar, and Precious Metals.  We believe any early signs of weakness will be found within these symbols.

With a total of 55 years of technical analysis and trading between Brad Matheny, and myself Chris Vermeulen, our research and trading signals makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and Trading Courses are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.

Chris Vermeulen

Transportation Sector Is Testing Resistance

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.

Get My Swing Trade Signals Today! Click Here

Chris Vermeulen

Prepare For Unknown Price Action As New Highs Are Reached

The ES and NQ are very close to breaking out to new all-time highs this week and possibly over the next few weeks.  The NQ is very close to these new high levels already.  Traders must not take this move for granted as increased volatility and a very real chance for a price correction become even greater once we break into “new high territory”.

This upside move has taken almost 5 months to climb back from the December 2018 lows.  It has been a very dramatic rally to say the least.  We’ve seen dozens of professional analysts suggest the markets would rotate lower all the way up this rally.  It seems as though everyone wanted to be right that the market top in October 2018 was going to be the start of something big.  We were one of the few analysts that called the market accurately.  Our September 17, 2018 analysis called for almost every leg of this price swing over the past 7+ months.  We stuck by our research while others were skeptical and doubting our research.  We stuck to it because we believe in our work and modeling tools.

Now, our modeling tools are suggesting we could be setting up for a pretty big increase in volatility over the next 2~3 months with the potential for bigger price rotation into May/June 2019.  As we are reading our modeling system results, the key elements are that price will achieve new all-time highs, the price will increase in volatility and Gold should begin an upside price move over the next 2~5+ weeks.  The move in Gold suggests one of two things may happen, or both.  The US Dollar may weaken or the US stock market may correct a bit based on some economic event or outside foreign economic event.

Either way, the move in Gold suggests that increased volatility is almost a sure thing over the next 60 to 90 days.  The only reason Gold would rise is if there is some increased fear factor throughout the planet in regards to the protection of assets and fear of some unknown event.  Therefore, if our analysis is correct and Gold does rise as we have indicated, then something is about to create a big increase in volatility.

The key to all of this is that the ES and NQ will move into NEW HIGH territory before this volatility increase begins to become apparent.

This ES Weekly chart shows just how close the ES (S&P500 Futures) are too new all-time highs.  The ES needs to climb another 41 points (+1.41%) before it touches the previous all-time high levels.  That is really only one of two good upside days.  Once it breaks the 2947 level, then the 3000 psychological level becomes a very real target.

 

This NQ Weekly chart shows that the NQ is really just inches away from breaking to new all-time highs.  The NQ only needs to rally 24.50 points (+0.31%) before the 7731 level is breached.  We believe this move will happen very early this week and we could see the NQ push all the way above the 8000 level in short order.  Our Fibonacci price modeling system is suggesting 9130 and 9625 levels may become the ultimate highs – but it is still very early to tell at this stage of our research.

 

Back in July and August 2018, we started warning that the end of 2018 and all of 2019 were going to be very good years for skilled traders.  We’ve seen a nearly 3800+ point price swing in the NQ and a +1200 point price swing in the ES.  Let’s face it, folks, these are very big moves and if you had been capable of trading these moves efficiently, this is the type of price rotation that makes millionaires out of average traders.

Get ready, because the rest of 2019 and almost all of 2020 are going to be just as exciting to trade so be sure to get our trade signals.

We’ll see you on the other side of “new all-time highs” for the US Stock market here soon.

Chris Vermeulen
www.TheTechnicalTraders.com