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Index Prediction System Is Telling Us A Very Different Story

On this day, celebrating fathers and all they do for families and their children, we thought we would share some really interesting research regarding the next six months trading expectations in the NASDAQ and what it means for your trading account.  One element of our research involves data mining and searching for historical price correlation models.  These types of elements help us identify when the price is acting normally or abnormally. We like to focus on the NQ (NASDAQ) because its tech-heavy and is where a lot of the Capital Shift (money from other countries is flowing into as a safe/best asset class at this time). Below, We are going to Geek-Out a little and sharing raw data values from one of our data mining utilities highlighting each month’s historical activity in the NQ. Pay close attention to the “Total Monthly Sum” and the monthly NEG (negative) and POS (positive) values.  These values show the range of price activity over the past 20 years normalized for each month. Obviously, we can’t expect the markets to adhere to these normalized values, but we can gain insight from the data retrieved by this data mining tool.
To help you understand this data we’ll focus some brief analysis on the month of June, below. June has a total monthly NEG value of -1009 and a total monthly POS value of 1410.  Additionally, the NEG value is comprised of 9 months of data and the POS value is composed of 11 months of data.  Therefore, the relationship between NEG and POS months is roughly 1:1 – or about equal. Overall, the positive months outweigh the negative months by 401 points. The largest monthly positive and negative values are 492 and -189. This suggests the positive price aspect of these mined data points is about 2.3:1 respectively. The conclusion we derive from this date is that June is moderately more positive based on historical price data then negative.  This data is derived from the NQ. Therefore the expectations of a positive 300 to 400 point move in the NQ for June would be in line with historical expectations.  Anything beyond that range should be considered a price anomaly. These types of price anomalies to happen fairly often but are difficult to predict. As of today, the NQ has already moved upward by over 400 points since the end of May. This price advance equaling our expected data range would suggest that the upward price move in the NQ may be very close to ending. =====[ June Monthly Analysis ]======================== – Largest Monthly POS : 492 NEG -189.25 – Total Monthly NEG : -1009 across 9 bars – Avg = -112.11 – Total Monthly POS : 1410 across 11 bars – Avg = 128.18 ——————————————– – Total Monthly Sum : 401 across 20 bars Analysis for the month = 6 =================================================== As you scan through the rest of these data mining results, pay very close attention to the largest monthly ranges as well as the overall price bias described by the total monthly NEG and POS values.  For example, in July the monthly values are more narrow in range. Yet the total monthly NEG and POS values depict a broader range for price. Additionally, the POS bars (13) compared to the NEG bars (6) describes a vastly different historical price relevance.  The possibility of an upside price bias in July is much stronger than what we determined four June.  The 13:6 ratio of upside to downside price bars in July converts into a nearly 2:1 upside price expectation versus a 1:1 ratio in June.  Because of this, we can determine that July will likely result in a positive upside price move of at least 150 to 250 points in the NQ before exhausting. =====[ July Monthly Analysis ]======================== – Largest Monthly POS : 319.75 NEG -200 – Total Monthly NEG : -656 across 6 bars – Avg = -109.33 – Total Monthly POS : 1654 across 13 bars – Avg = 127.23 ——————————————– – Total Monthly Sum : 998 across 19 bars Analysis for the month = 7 =================================================== Our data mining tool suggests that August may be much more volatile than July. The larger monthly total sum suggests a possible breakout move to the upside. The increases in total monthly values suggest volatility will also increase. Overall the combined July and August data points suggest rotation may end with a big move to the upside sometime in late August before a correction. =====[ August Monthly Analysis ]======================== – Largest Monthly POS : 477 NEG -313.25 – Total Monthly NEG : -835.5 across 8 bars – Avg = -104.44 – Total Monthly POS : 1702.5 across 12 bars – Avg = 141.88 ——————————————– – Total Monthly Sum : 867 across 20 bars Analysis for the month = 8 =================================================== September data points show an immediate reversal to the upside price bias. The data reporting from our data mining tool flips to the negative side fairly strong. Overall expectations are roughly 1:1 that a downside price move will dominate for September. Our data mining utility suggests a downside price move of between -450 and -550 points.  If you’ve been following our research, you already know that we are predicting a moderately large downside reversal beginning in late August or September. It is our belief that the US stock markets will rotate downwards after a peak in price in August. We believe this downside move could last well into November, much like the downside move in 2018. =====[ September Monthly Analysis ]======================== – Largest Monthly POS : 229 NEG -473 – Total Monthly NEG : -1460.25 across 10 bars – Avg = -146.03 – Total Monthly POS : 903.5 across 10 bars – Avg = 90.35 ——————————————– – Total Monthly Sum : -556.75 across 20 bars Analysis for the month = 9 =================================================== Should our expectations play out in the market, the downside price move in September, October and possibly November, would result in a unique price anomaly setup near this price bottom. As you can see from the data mining results, below, the last quarter (3 months) of the year typically results in upside price bias. Therefore, any deep downside price move after our expected peak in August will set up a very unique price anomaly pattern where skilled traders should be able to capture an incredible upside price run near the end of 2019. =====[ October Monthly Analysis ]======================== – Largest Monthly POS : 480.25 NEG -679.75 – Total Monthly NEG : -1564.5 across 7 bars – Avg = -223.50 – Total Monthly POS : 2320.25 across 13 bars – Avg = 178.48 ——————————————– – Total Monthly Sum : 755.75 across 20 bars Analysis for the month = 10 =================================================== =====[ November Monthly Analysis ]======================== – Largest Monthly POS : 316.5 NEG -768 – Total Monthly NEG : -1169 across 6 bars – Avg = -194.83 – Total Monthly POS : 1509 across 14 bars – Avg = 107.79 ——————————————– – Total Monthly Sum : 340 across 20 bars Analysis for the month = 11 =================================================== Pay very close attention to the fact that December can be fairly mixed in terms of overall price bias and upside or downside price expectation.  With a 1:1 (equal price weighting) for both positive and negative price results and a monthly sum of only about 100 points, we would expect December to be moderately congested and flat. =====[ December Monthly Analysis ]======================== – Largest Monthly POS : 782 NEG -616.25 – Total Monthly NEG : -1179.5 across 10 bars – Avg = -117.95 – Total Monthly POS : 1291.5 across 10 bars – Avg = 129.15 ——————————————– – Total Monthly Sum : 112 across 20 bars Analysis for the month = 12 =================================================== And there you have it, our Father’s Day gift to all of you. These results from our proprietary data mining utility are providing you with a detailed map of what to expect in the NQ going forward through December 2019. This is only one aspect of our research team’s resources and unique capabilities that assist us in understanding what price will be doing in the future. There are many other utilities and trading indicator tools that we use to help confirm and validate our analysis. We’ve included a chart of the S&P E-mini futures contract with a yellow line drawn across our predicted price modeling expectations starting from the end of 2017 until now. Pay very close attention to our expected price levels and the market price levels as time progressed forward. As you become more skilled in understanding how this data can be used to benefit your trading and deliver results, you’ll learn why our research team relies on our proprietary modeling tools and software so heavily.
We thought we might share a bit of specialized data with you on this Father’s Day so that you could use some of our proprietary information in your own research and analysis going forward. Please remember, price action dictates everything. Even though we can model and data mine incredible information months or years into the future, everything comes down to what price is doing right now. If it confirms our analysis, then fantastic – our research may be right on the money.  If the price moves beyond our expectations and research, then we have to reevaluate our expectations in correlation with the data that we have to determine if we need to adjust our expectations going forward. My point is, yes we can forecast, yes we have been correctly more times than not, but you cannot just go out and place trades based on this analysis alone because our analysis will change with the market. To be blatantly honest, we don’t really care what the market does or when. We FOLLOW the market and trade on its coat tales, we don’t jump in front of it and guess/hope it will reverse as we are predicting. Some of our articles/forecasts we share simply don’t happen and we get lots of flack from free followers of these articles. But what most followers fail to understand is that even when our predictions are DEAD WRONG, we and our subscribers make money in most cases. Again, we don’t trade the forecasts we just let them help guide us, and we trade with the dominant trend. 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) SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS! Free Shipping! Happy Fathers Day Guys! Chris Vermeulen Founder of Technical Traders Ltd.

ADL Predicts Expected Range Of The NASDAQ Before Breakout

Our advanced predictive modeling system is suggesting a defined range for the NQ over the next 30 to 60+ days before a bigger breakout move is expected.  If you’ve been following our research, you already know we have been predicting the NQ to move in a sideways pennant formation.  Our ADL predictive modeling system is suggesting the NQ will stay within a defined price range over the next 30 to 60 days. The upside price bias we are predicting is based on the ADL modeling systems suggestion that an upward price bias is inherent in the markets. You’ll see from the charts below that two different predictive results are driving our interpretation currently. One result is predicting an upward price bias over the next 2 to 4 months whereas the second result is predicting a sideways price result over the same period of time. Our conclusion is that the NQ will likely trade in a sideways pennant formation over this span of time before a breakout price move happens. Our research continues to suggest a price peak may happen in August or September of 2019. We believe this peak aligns with our cycle research as well as aligns with our suggested pennant formation pattern. We believe the peak that forms near August or September will likely result in new all-time price highs. That breakout to new all-time highs will likely be the end of the move higher for now.   After our expected price peak sometime near September, we believe the markets will turn lower with a possible move of -10% to -15% or more. This two-week bar chart of the NQ highlights our ADL predictive modeling results. You should be able to see the yellow dashed lines on this chart showing what we believe will be price support above 6800.  we’ve also drawn lines on the chart highlighting where the pennant formation price rotation will likely take place. Over the next few weeks, we expect the NQ price rotation to stay between 6800 and 7500.  This range presents an incredible opportunity for traders to trade this rotation.
This NQ monthly chart highlights to ADL predictive modeling results showing two separate ADL predictions. Our researchers use these results to create a combined consensus expectation for the markets. This particular NQ monthly chart suggests there is a strong upward price bias over the next 2 to 3 months. Combining this upward bias with our expectations of price support near 6800, we conclude that a sideways price rotation should be expected with a fairly volatile price range. Please take notice of the upper yellow dashed lines of 8000. These ADL predictive levels suggest that the NQ will likely attempt a move above 8000 sometime in August or September of 2019, then move dramatically lower as price attempts to revert back to the 7500 level – or lower.
It is critically important for traders to understand the future price expectations of the NQ and the US stock market. Having knowledge of future price activity, like our ADL predictive modeling can produce, allows traders to plan for and execute strategic trading strategies. Once the peak in August or September is reached, skilled traders should begin to prepare for a bigger downside price move which may last many months. Initially, our expectation is a move back to 7500. Our longer-term research and cycle analysis suggest prices may move much lower – possibly towards 6000 or lower. 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 Happy Trading! Chris Vermeulen

US Markets Rally Hard – Could Another Big Upside Leg Begin?

Closing out the first week in June 2019, the US stock market rallied hard from recent lows and prompted many traders/investors to rethink their future plans.  At the same time, Gold and Silver began a decent price rally of their own while Oil found support just above $50.  It certainly has been an interesting week for traders.  One that was full of incredible opportunity as many symbols rotated 6 to 12% or more over the past 10+ days. The fact that Oil is finding support above $50 while Gold and Silver continue to rally suggests that fear may be entering the metals market while Oil may have found a temporary price bottom near $50 to $51.  Weakness in the US Dollar is also helping both Oil and Metals to push higher.  Our recent research suggests that the US Dollar will find support near $95 indicates the US Dollar may fall a bit further – pushing Oil and Metals a bit higher. The strength in the US stock market near the end of the week suggests fear of any US collapse or future economic concerns appears to be abated.  It is very unlikely the US major indexes would rally as they have on any extreme fear of any major US calamity or economic concerns.  A slightly weakening US Dollar and moderately strong US economic data continues to suggest the US stock market may continue to be the repository of funds for foreign investors for many years to come – or until something dramatic changes in the US. It is rather simple to understand the capital process that is at work in the global economy at the moment; until foreign market valuations and expectations appear to be opportunistic for future returns, the US Dollar and the US stock market are the most likely targets for foreign investment and safety.  Weakening currencies, weakening global economies and weakening commodity prices will push capital away from foreign markets and into safety.  Safety will be found in the US markets, precious metals and possibly Crypto currencies.  Anything that avoids deflationary risks and credit/debt risks. This YM Weekly chart highlighting our Fibonacci price modeling system shows how dramatic the upside price reversal was by the end of last week.  The closing candles created an Engulfing Bullish candlestick pattern which is typically quite bullish.  The fact that price closed above the GREEN Fibonacci trigger level is further indication that a renewed price rally may begin soon.  Support near $24,000 appears to be quite strong and any further downside price risk must first break this level.  As long as support holds and price continues an upside bias, there is a very strong potential for a move to above $28,000 in the works.
This NQ chart highlights a similar price pattern and suggests the NQ needs to climb above $7600 before a true rally can begin.  Ultimately, the upside targets for this move are near $8500 or higher based on current price rotation.  Support near $6800 is critical – so price must stay above this level for any future rally to continue.
We authored a VIX/Volatility article just a few days ago that highlighted our believe that the VIX would trade lower, within a sideways price channel till near the end of July or August 2019 – then begin another VIX Spike move upward.  This coincides with the current research we are seeing where the US stock market will likely continue to push higher, very possibly setting new all-time highs again, before any real risk of any downside price collapse happens. Follow our research and don’t miss these opportunities.  We’ve been warning our followers for months that 2019 and 2020 are going to be incredible years for skilled traders.  These recent 10 to 20% moves in Gold, Silver, Oil and many ETFs are just the beginning.  Our research team and trading team are ready to help you find and execute for better success. Chris Vermeulen www.TheTechnicalTraders.com

Adaptive Price Modeling Suggests Big Rotation In US Dow Stocks

I have been pouring over the longer term charts as we’ve started to see Oil and Gold move in directions that would indicate increased fear throughout the global markets while a contraction in economic activity/oil prices appears to be setting up for another big move.  The objective is to attempt to identify longer-term volatility expectations and price targets.  To accomplish this task, we use our Adaptive Fibonacci predictive modeling utility on 3 Week charts because they provide a unique look at price activity and are a bit more reactive to shorter-term price activity than Monthly price bars.

We found some very interesting components by reviewing these charts of the ES, NQ, YM, and CL.  We believe we are setting up a 2~4+ week sideways price rotation in the US stock market as price attempts to consolidate within this range before a broader breakout/breakdown move could happen.  Just as we predicted many months ago, the July 2019 price peak we suggested could form appears to be setting up with a sideways pennant/flag formation as investors digest the economic and global trade war news data.

Eventually, the price will make a move in an attempt to break this sideways price channel and our predictive modeling solutions can help us to understand how these price setups will playing out.  Let’s get into the charts and research.

As we start to pull apart the data from these charts, we urge you to pay attention to two things – the range of the current Bullish & Bearish Fibonacci Price Trigger levels and current price rotations of price peaks and troughs over the past 40 to 60 bars.  It is very important to understand and attempt to use the “new price high” and “new price low” Fibonacci price theory that we keep talking about in our articles.

This first chart is the ES 3-Week chart highlighting the range between the Fibonacci Bullish and Bearish Price Trigger Levels (highlighted in light-CYAN).  It is important to understand why the current bearish price trigger level is so far below current price levels.  The Adaptive Fibonacci modeling system adjusts trigger levels based on recent price activity and price volatility to attempt to identify when the price is congesting in a sideways price trend or trending upward or downward.  When price congests in a sideways form, the Adaptive Fibonacci modeling tool identifies this and determines that price would need to move to new levels in order to qualify for a new bullish or bearish price trigger.  In this case, it is suggesting that price would need to fall below $2014 before this 3-Week chart would qualify the move as a “new bearish trend”.

That is a big move from current levels.  It totals more than -750 points – a -27.5% price decline.

Currently, as long as the ES price stays above the $2633 level, the Fibonacci predictive modeling system is still suggesting the Bullish trend is intact and should continue.

 

This NQ 3-Week chart is setup in a similar manner to the ES chart. Although the Fibonacci volatility range on the NQ chart is much more narrow than the ES chart, the Fibonacci modeling system is still suggesting that the current trend is still Bullish and the key levels for the triggers are $6792 for the Bearish Trigger level and $6556 for the Bullish Trigger level.

Because of the narrow volatility range and because the Bearish trigger level is above the Bullish trigger level, we believe a price rotation where the price stays above $6800 is very likely over the next few weeks.  Obviously, should price break below the Bearish Trigger level, then we would begin to become concerned that a broader downside trend is being established and start to look at the Fibonacci downside price targets (near $5815 & $3900).  Until that happens, expect sideways price rotation with a 250 to 500 point range on average (about 2x the Fibonacci volatility range).

 

The YM is really the key to understanding just how the markets are going to play out over the next few weeks and months.  The extremely large Fibonacci volatility range on the YM chart highlights the potential for the wild sideways price rotation that we are expecting over the next few weeks and months.  Remember, our analysis from many months ago suggests a price peak will likely form in July/August 2019 and prompt a broader downside price move after this peak completes.  Our expectation that a current sideways price channel is setting up leads us to believe the apex of this sideways price channel may result in a very brief price rally (pushing prices back towards recent highs) before rolling over and starting a new downside price move to coincide with our July/Aug 2019 predictions.

One way or another, it appears the DOW/YM will be leading the way in terms of price volatility and rotation.  The wide range between the Bullish and Bearish Fibonacci Price Trigger Levels is suggesting that price volatility is increasing and that the YM would have to move to levels above $29,750 or to levels below $18,875 before establishing any new price trends.  The past Fibonacci trigger levels help us to understand key price levels as this future move takes place.

Past Fibonacci Trigger Price levels are $26,025 for a Bearish Price Trigger level and $24,770 for a Bullish Price Trigger Level.  This means if the price is below $26,025 – we should expect a bearish price trend to continue and if the price is above $24,770 – we should expect a bullish price trend to continue.  Yet, price is current BETWEEN both of these levels, so what should we expect right now?  When the price is in between these levels, like now, we typically look for the last price rotation (peak or valley) and for the last level that was crossed (in this case the $26,025 Bearish level) and would conclude:

The trend is currently Bearish and the $26,025 level is key to maintaining this bearish price direction.  Should price move back above this level and close above this Bearish Price Trigger Level, then we would consider the trend “moderately bullish” while we wait for a new Price Trigger Level Breach to setup.

 

Lastly, Crude Oil.  We’ve been writing to all of our followers that we felt Oil was setting up for a price rotation many weeks ago.  We warned that the $65 price level may be the end of the move and that the $55 to $50 levels are the likely downside targets.  The volatility range is somewhat narrow and the last Trigger Level that was breached was the Bearish Trigger Level near $68.75. Therefore, we believe the recent downside price move, below the $60 Bullish Trigger level, results in a new Bearish price trend with immediate targets near or below $50.  Ultimately, the $42.40 level may be the longer term downside price target – which would coincide with a broader commodities slowdown and global economic activity contraction.

 

So here is what you need to know to go into this weekend and for the next 4+ weeks.

Expect the US stock market to trade in a moderately volatile sideways price channel for the next 4+ weeks.

Expect the end of this price channel to result in a “false rally” move that may push prices towards recent highs before faltering and rotating back to the downside.

Expect this END of the sideways price channel to happen sometime near mid-July or early August 2019.

Expect Gold and Oil to continue to react as “fear measures” over the next few weeks/months as global traders reposition their assets throughout this rotation.

Expect a bigger price move near late July through September~October 2019 as this volatility move really begins to take root with equities.

Follow our research and learn how we can help you stay well ahead of these price moves.  We’ve just highlighted what is likely to happen over the next 30 to 60 days in this research post.  Want to know how we are going to trade these moves?  Join our other members to see how we create success and keep our members ahead of these big moves. Also, if you wanted me to ship you free silver rounds with a subscription to this Wealth Trading Newsletter you better join today as this offer expires June 1st.

Chris Vermeulen
www.TheTechnicalTraders.com

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.

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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