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Following up on some of our recent metals research, we wanted to alert our friends and followers to the incredible opportunity that still exists in Silver.  We’ve highlighted two of our more recent articles for reference and review, below.  Silver continues to be one of the most incredible opportunities for 2020 and Silver Miners (SIL) could explode to the upside as the price of Silver rallies to close the gap between the Gold to Silver ratio.

Our researchers believe Silver is currently undervalued, compared to Gold, by at least 240%.  Historically, the Gold to Silver ratio averages a 10+ year rotational range of between 63 to 67.  This means that through both peaks and troughs, ranging from the high 80s to mid-90s to the low 30s to mid-40s, on average the middle price range level for this ratio is near 65.  Currently, this Gold to Silver ratio is 88.4.

Gold is currently trading at $1590 – just below the recent peak near $1613.  We believe that Gold will continue to rally higher, breaking the $1613 level, and continue higher targeting the $1750 level over the next few months.  Eventually, within 2020, we believe Gold will continue to rally higher breaking the $2100 price level.

This continued upside price action in Gold, while Silver has really yet to see any massive upside price movement, continues to create a massive price disparity between Gold and Silver – which is highlighted in the Gold to Silver ratio.  As Gold rallies, Silver must begin to move dramatically higher in order to close this price disparity between the value of Gold to Silver.  Historically, we believe the rally in Silver will force the Gold to Silver Ratio to fall to near the 65 level.  This would represent a massive 70% to 120%+ rally in the price of silver – targeting $24.50 to 32.50.

GOLD AND SILVER RATIO WEEKLY CHART

If the Gold to Silver Ratio falls below the 65 level and targets lower ratios, as has happened in the past, then Silver may rally as high as $45 to $55 per ounce while Gold stays below $1800.  If Gold does rally above $2000, as we expect, the true potential for Silver experiencing a major price reversion event could be as high as $60+ per ounce.

Please take a minute to read some of our previous research posts regarding the metals markets here:

January 14, 2020: SILVER TRADERS BIG TREND ANALYSIS – PART II

December 30, 2019: METALS & MINERS PREPARE FOR AN EARLY 2020 LIFTOFF

DAILY PRICE OF SILVER CHART

This Daily Silver chart highlights what we believe will be the next move higher in Silver.  The next upside price advance should target the $21 to $23 level as Silver attempts to revalue compared to the price of Gold.  Near this $23 level, Silver should stall briefly before attempting to move much higher.  The reality is that once this revaluation event begins to take place in Silver, we believe it will prompt an extended price rally that could last well into 2023-2024.

PRICE OF SILVER WEEKLY CHART

This Weekly Silver chart highlights our research team’s expectations related to Silver over the next 6+ months.  At first, we believe the $21 to $23 level will become the target.  Then, a short period of price rotation will find support near $21 before another upside price leg pushes silver above $24.  Remember, if Gold continues to rally higher, these expectations could extend 5% to 10% in size and scale.

SILVER MINERS SECTOR ETF – WEEKLY CHART

Another key component of this move is the opportunity in Silver Miners.  This SIL Weekly chart highlights the real potential for a 20% to 30% upside price rally related to the expected price revaluation/reversion event we have been describing for Silver.  Miners are an excellent correlative component for skilled traders expecting a move like this in the metals market.

Learn how we can help you find and execute better trades and turn the extreme volatility into solid profits.  Read our research and see what our research team has been predicting over the past few months.  We dedicate our efforts to helping you find great trades and helping you protect your assets.

Join my ETF Trade Alert Newsletter – Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site to learn how to take advantage of our members-only research and trading signals.

Platinum has setup into a longer-term FLAG formation and has recently broken the APEX of this FLAG.  The long term potential for Platinum, in conjunction with the advance in Rhodium, Palladium, Gold, and Silver, is a new Bullish Price Trend.

Our researchers believe Platinum must move above $1200 for this new Bullish trend to anchor a “Breakout Base” formation.  The current investment environment suggests a new metals rally is setting up.  Fear is starting to take hold of the markets and industrial and manufacturing demands are still driving prices and supply demands higher and higher.  As investors pile into the metals as a form of safety, we expect Platinum to rally above $1200 within the next 4 to 6+ months and begin a much broader rally to levels above $1600 overtime.

Demand for Platinum has increased because of two main reasons:

1) Rapid increase in consumption in SE Asia
2) Increase in acceptance of fuel cells.

As we learn more about the industrial and manufacturing demands for Platinum. It becomes evident that a new upside bias in trend may just be getting started.

Traders need to understand and consider the opportunities presented by this incredible longer-term setup in Platinum.   Could platinum DOUBLE in price within 12 months?  Could it TRIPLE?

Follow our research to stay ahead of this incredible opportunity for skilled technical traders and learn how we can help you find great trades.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

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

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site to learn how to take advantage of our members-only research and trading signals.

Our recent research suggests the US stock market may be entering a period of volatility that may include a broad market rotation/reversion event.  We believe this volatility event could begin to happen anytime over the next 10 to 30+ days.  The rally in the US stock market ending 2019 and carrying into 2020 appears to be setting up a “rally to a peak” type of price pattern. Please take a minute to review the following articles we’ve posted recently about this topic and how it relates to opportunities in Metals/Miners.

January 20, 2020: Q4 EARNINGS SETUP THE RALLY TO THE PEAK

January 15, 2020: SHIFTING UNDERCURRENTS IN THE US STOCK MARKET

The potential for a volatility spike resulting from a price peak formation (see the January 20, 2020 article above), could setup a moderately broad downside price reversion event that may prompt a 5% to 8%+ downside price correction.  If that happens, as we expect, over the next 5 to 10+ trading days, then precious metals and miners should explode to the upside as a “risk-on” trade moves capital into the metals market.

We believe the Miners (both Gold and Silver) are setting up for an explosive upside price move over the next 60+ days.  The reality of the global markets is that it appears to be setting up in a very similar manner to what happened in the late 1990s.  The rally in Rhodium, Palladium and Platinum are similar to the rally that took place in the late 1990s – just before the real explosion in Gold and Silver began in 2003-04.  The rally in Gold and Silver took place after a collapse event in 2000-2001 and setup a massive upside price event for Precious Metals and Miners.  You can read more of our research below.

January 16, 2020: PLATINUM BREAKS $1000 ON BIG RALLY AND WHAT IS NEXT

December 30, 2019: METALS & MINERS PREPARE FOR AN EARLY 2020 LIFTOFF

GDXJ 10 MINUTE CHART (1 MONTH DATA VIEW)

If we start with the shortest time frame analysis of the gold miners you can see a lot of measured moves based on technical analysis that has taken place in the last month of trading and it’s not far from over based on this chart.

DAILY GDXJ CHART

The setup in GDXJ is that Junior Gold Miners should move 15% to 25% higher over the next 30+ days on a price reversion event in the US stock market.  We believe the upside target for GDXJ is $46 to $51 from the current levels near $41.50.  After a brief pause near $50, GDXJ should attempt another rally to levels above $65 to $70 sometime near June~August 2020.

WEEKLY GDXJ CHART

This Weekly GDXJ chart highlights what we believe will happen over the next 6+ months.  The opportunity for skilled traders at this level is incredible.  Support near $35.50 has recently been retested and held.  Any entry below the $40 level is an incredible opportunity to catch this upside price move.

CONCLUDING THOUGHTS:

We believe the US stock market will enter a period of volatility over the next 30~60+ days and that volatility will push metals and miners higher into this next wave of advancement.  Be prepared for Silver and Silver Miners to rally more than Gold/Gold Miners (potentially).  We’ve highlighted how Silver tends to rally a few months behind Gold when a Risk-On trade sets up.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

2020 is going to be full of incredible trading opportunities for skilled traders.  We’ve already set up a number of active trading triggers for our members to profit from the early moves in 2020.  This Gold Miners trade is an incredible opportunity for anyone skilled enough to take advantage of it. Visit Technical Traders Ltd. to learn how we can help you find and execute better trades in 2020.

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

Chris Vermeulen
www.TheTechnicalTraders.com

Certain precious metals, Gold, Silver, and Platinum, have shown moderate upside price trending over the past 20+ months while Rhodium and Palladium have skyrocketed higher.  These more precious metals, Rhodium and Palladium, have many industrial and consumer uses.  Rhodium is used in electronics and plating and Palladium is used in a variety of consumer products from Automobiles to Medical Devices.

Still, the rally in Rhodium (over 300%) and Palladium (over 70%) over the past 12 months has been more than impressive.  Whey are we not seeing a similar rally in Gold, Silver, and Platinum yet?

The reality is that we are seeing a similar price rally in Rhodium and Platinum as we saw in 2004~2008 – just prior to the Global Credit Crisis.  Take a look at the composite chart below.

There are few interesting components of these charts that show how precious metals reacted throughout the 1997~2000 rally and the 2005~2008 rally – both of these events set up a bubble burst reversion event.

_  Rhodium rallied extensively in 2005 through 2008 – peaking at levels near $10,000 just before the credit crisis bubble burst.

_  Palladium rallied a moderate amount in 2005 through 2007, then sold off as the bubble burst.  Then rallied to over $800 after fear set into the markets.

_  Platinum began a rally in early 2000 that propelled it to a peak in 2007 (just before the peak in the US stock market).  Since then wild price rotation and a moderate reversion to levels near $1000 have set up a massive basing pattern.

_  Gold, like Platinum, began an incredible upside price rally in early 2000 and continued to rally till the peak in 2010

_  Palladium, being an industrial use metal and being deployed in a variety of advanced technology, would tend to rally as demand for technology products and consumer products associated with Palladium components are in very high demand.  Much like what happened in 1998~2000.

_  Rhodium’s rally is very likely related to manufacturing and institutional demand across the globe.

_  Platinum and Gold may be set up for an incredible upside price rally should Rhodium and Palladium extend their rallies even further.

_  We find it incredibly fascinating that Rhodium rallied nearly 1000% from 2004 to 2009 – just before the peak in the global stock markets and the start of the Global Credit Crisis.

_  We also find it incredibly interesting that Palladium rallied over 1000% from 1995 to 1999 – just before the DOT COM bubble burst.

_  We believe the rallies in Rhodium and Palladium are early warning signs that can’t be overlooked by skilled traders/investors.

The recent upside breakout of Platinum falls into the same category as the late 1998 Platinum rally as the valuations of the DOT COM rally began to overextend.  We believe this shift into high-value risk protection began to take place as investor’s fear levels increased in the late 1990s.  As we suggested recently – a shifting of the undercurrents in the markets.

The current rally above $1000 in Platinum suggests a new upside price rally is taking place after an extensive basing pattern (2015 to now).  Should Platinum rally above $1200 per ounce, a new technical bullish trend will be confirmed.

Our proprietary Fibonacci price modeling system is suggesting price targets on the Weekly chart of $1090, $1130 and $1215.  Pay very close attention to this rally in Platinum as it could become the catalyst for a much bigger move in many of the major precious metals.  The Platinum rally in 1997 began an upward price advance of nearly 600% over the next 10 years.  A similar move today would put Platinum near $6000~$7000 – Gold would be near $3200+ should this happen.

Our belief is that the rally in Platinum will continue as valuations in the global markets push higher.  Fear is creeping back into the markets as investors are expecting some type of price reversion event.  We believe the current setup is very similar to a mix of the events we’ve highlighted in the composite metals chart, above.  A mix of what happened in 1995~1997 and a mix of what happened in 2005~2007.  Platinum and Gold are acting very similar to what happened in 1995~1997.  Palladium and Rhodium are a mix of 1995~1997 and 2005~2007.  Overall, the rallies in Rhodium and Palladium are strangely similar to “peak everything” bubbles.

Watch how this plays out over the next 12+ months.  Gold and Silver should begin to move higher as Platinum extends the rally.  Fear is starting to re-enter the markets as traders and investors extend their belief that a reversion event is setting up.

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

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site (www.thetechnicaltraders.com) to learn how to take advantage of our members-only research and trading signals.

This, the second part of our Silver research article suggesting Silver may be forming a massive price base in preparation for an explosive upside move, will continue from Part I of this research series.

Our research team believes Silver is setting up in a price pattern that may already be “ripe” for an explosive upside move.  Our researchers have poured over the data and believe the disparity between Gold and Silver is already at excessive levels.

Historically, anytime the disparity between Gold prices and Silver prices (rationalized into comparative Gold price levels) breaches 30% to 60% and Gold begins an upside price advance, Silver typically begins to move higher with 4 to 8+ months.  This setup pushes the Gold to Silver ratio back below 50 or 60 as Silver rallies substantially higher, and faster than the price of Gold.

Comparatively, Silver continues to trade within a sideways price range after basing in early 2016.  This price range has been fairly consistent between $14.50 and $21.0.  With Gold recently starting to move higher because of the US/Iran military conflict, this raises an early warning flag for our research team because Silver has continued to trade below $18 – and well below recent highs near $20.

The price disparity between Gold and Silver is currently greater than 200% based on our proprietary modeling system.  Remember, anytime this disparity level is greater than 30% to 60% and Gold breaks out in a rally, Silver will break to the upside within just a few months.

The second stage rally in Silver, the real money-maker, will come when investors pile into Silver and Silver Miners as the breakout in Silver becomes explosive.  The time to get into this trade is/was now or 4 months ago.  Still, there is plenty of opportunity for skilled traders right now because the breakout move in Silver and Silver Miners has not really begun yet.

The first big upside move in Silver and Miners will be to attempt to move higher and target recent resistance.  Resistance in Silver is currently near $19.70 and $21.00.  This means any move above $19.75 (or higher) where the price of Silver fails to move above $22 or $23 would constitute a “Stage 1 Base Advancement”.

After this move is complete, a “Breakout Stage” price move will take place.  This may be where Silver prices advance from the $21 to $23 level up towards the $28 to $32 price level.  This upside price advance breaches the Stage 1 resistance and attempts to establish new support for a continued Stage 2 advance.

Remember, the current disparity level is just over 200% between Gold and Silver.  If Gold continues to rally higher and Silver attempts to break higher, attempting to narrow the disparity level, then Silver will (at some point) enter a near parabolic upside price move above $36 to $40.  Our researchers believe this may happen before June or July 2020.

This incredible opportunity is currently setting up for skilled traders.  Believe it or not, while Silver continues to trade below $18 per ounce and global investors are focusing on US stocks, Emerging Markets, and Gold, Palladium and others, this setup in Silver may become the biggest investment opportunity of 2020.  Sure, Gold may rally 80% to 140% over the next 12 to 24 months.  Palladium may rally even higher.  If Silver does what we expect it to do once this setup/trigger really breaks open, Silver could rally 500%+ over 12 to 24+ months on an incredible upside disparity reversion move.

This last chart highlights why we believe this setup in Silver should not be ignored.  In 2005, the rally in Silver as a result of this Disparity trigger resulted in Silver reaching a 38% higher peak than Gold.  In 2009, the same Disparity trigger prompted Silver to rally to levels nearly 300% higher than the peak in Gold prices.  If Gold rallies to levels above $2800 to $3100, which is our expectation, and this Disparity trigger prompts an upside move in Silver, we believe Silver could rally to levels 200% to 400% (or more) higher than Gold prices.  By our estimates, that would put Silver prices above $90 to $95 per ounce – possibly much higher.

Take advantage of any opportunity you have to position your portfolio for this setup and be patient.  The upside breakout in Silver happens like a train leaving the station.  Slow and steady at first, then building momentum, then finally running at top speed.  Each time this Disparity trigger sets up and executes, Silver starts a moderate move higher at first, then explodes to the upside as Gold continues to rally higher.  That last explosive move is why Silver reaches peaks that are substantially higher (in percentage terms) than the peaks in Gold.

Please pay attention to our research team’s efforts to help you create greater success and find great trades.  Take a minute to visit Technical Traders Ltd. to learn how we can assist you in 2020 and help you build wealth, attain greater success and stay ahead of these bigger market moves.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

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

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation, or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site (www.thetechnicaltraders.com) to learn how to take advantage of our members-only research and trading signals.

Many people believe the price of Gold will need to fall to support Institutional short positions.  We don’t believe this is the case.  The Commitment Of Traders (COT) Data suggests Commercial Hedgers have a large and growing shot position that is a very positive sign for a continued rally in Gold and Miners looking forward months from now.

Don’t think about COT data like everyone else with it comes to gold.

Over the past 20+ years, every time the COT Commercial Hedgers position in Gold falls, weakens substantially, or makes new multi-year lows the price of gold rallies.

WHY RECORD COMMERCIAL SHORT HEDGE POSITION IS BULLISH

It is my belief that the markets will move in favor of where the big money (commercial/institutions) want it to go in most cases. so if the commercial’s keep adding a short hedge position that means they are adding to heir long exposure and need to add more of a hedge to help protect their growing LONG position.

The weakening COT data from 2001 through 2012 is a perfect example.  As Commercial Hedgers moved away from Gold, the price of gold rallied to the all-time highs.

Additionally, after the major bottom in Gold in 2016, Commercial traders would have bought and accumulated gold driving the price higher.

Now, in late 2018 and throughout all of 2019, the Commercial Hedger COT position in Gold has fallen to the lowest level in the past 20+ years. This suggests the rally in Gold has really just begun to accelerate to the upside and there are more people buying gold than ever before who are buying protection (hedging)

The COT data I find very deceiving because it’s displayed and delayed in a way that makes traders and investors think the opposite.

Wall Street is in the business of making a market, and that means they play a game of deception so you do the opposite of what they are doing. Wall Street show As you watch gold moving with your new view on the COT data, you will notice gold will rally and post strong moves, then a couple of weeks later the COT data comes out.

With all that said, this is just my view and opinion of how I read the COT data for gold specifically. As with every chart and trader, there are many different ways things can be analyzed and viewed.

Since the price just had a strong advance, and you now see the commercials have added to their short position you naturally expect a pullback after a price rally especially when you see the big players adding to their short/hedge position. But what really just happened? the big players bought gold, and they had to hedge some of their new position. Very bullish in my opinion. While I do not use it for trading, it is a good confirming indicator of a trend.

Our research team, as well as our proprietary price modeling systems, suggested that Gold may rally to levels above $3700 before reaching an ultimate peak.  Currently, our predictive modeling systems are suggesting the next target is well above $1600 and we believe our original target from our October 2018 analysis, of $1700 to $1750, is still very valid.

We believe this current upside price rally in Gold will attempt to clear the previous high levels near $1924 – from September 2011.  We believe moderate resistance/rotation near $1700 to $1750 will be the last level of price resistance before a continued rally will push Gold prices above the $1924 peak – possibly stalling just below $2100.  Once price breaches the previous high level, we expect a short period of price rotation before another upside price acceleration takes Gold prices above $2400 to $2500.

Gold Miners are poised for an incredible upside price rally if our analysis of Gold is accurate.  GDXJ is currently trading near $42 – showing moderate weakness while Gold has seen some strength this week.  We believe Miners will do very well once Gold really breaks out above $1750 and begins to target the previous all-time high level.

Much like our expectations for Gold, we believe GDXJ will rally to levels near $60 once this current overbought condition wears off. Then we expect it to head towards $60 and rotate lower for a few weeks before attempting to rally further to levels above $70+.

Take a minute to review some of our recent Gold research posts to gain further insight

January 2, 2020: ADL GOLD PREDICTION CONFIRMS TARGETS

December 30, 2019: METALS & MINERS PREPARE FOR AN EARLY 2020 LIFTOFF

December 4, 2019: 7 YEAR CYCLES CAN BE POWERFUL AND GOLD JUST STARTED ONE

You won’t want to miss this incredible run in Precious Metals and Miners.  Follow our research.  Learn how we can help you find and execute better trades.  We’ve been warning all of our followers of this move for months – now it is about to get very real. In fact, we are giving away free silver and gold bullion bars to all new subscribers of our trading newsletter!

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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 urge you visit my Wealth Building Newsletter and if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

Last time oil peaked, it dropped nearly 20% soon afterward!

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. Visit our website to learn how you can see what this research is telling us.

I am going to give away and ship out silver and gold 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:

1oz Silver Round FREE 1-Year Subscription 
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SUBSCRIBE TO MY TRADE ALERTS AND 
GET YOUR FREE BULLION!

Chris Vermeulen
www.TheTechnicalTraders.com

Technical Analysis is the theory that price relates all news, fundamental and correlative future expectations into current and recent price activity.  It is the theory that price is the ultimate indicator and that charts paint a very clear picture for those individuals that are capable of understanding the message that is being presented.

In this research article, we are going to highlight the technical analysis components that we believe are painting a very clear picture that an “early warning” signal is flashing very brightly in the US and Global markets right now.

Cross market analysis and methods of rationalizing true price rotation, valuation and trend become the foundation of most technical analysis.  Studies, technical indicators, advanced price theory and all the rest of the tools we use are ways for us to better understand what price is actually showing us.  Today, we are going to focus on Gold, High Yield Corporate Bonds, and the Transportation Index because combined they are telling us something big is close to happening.

Before you continue, take a second and join my free trend trade signals email list.

Gold is a safe-haven instrument that measures uncertainty, fear, greed and the future expectations related to a secure global market economy.  When a crisis, economic or other uncertainty fears are minimized, Gold tends to move lower or consolidate into a lower price range.  When fears, economic uncertainty or any type of crisis event is causing concerns for global investors, Gold then begins to move higher as a measure of protection from risk and fear of any type of crisis event.

PRICE OF GOLD – BULL FLAG WITHIN A BULL MARKET

Gold has recently rallied well above the $1400 level and formed a large Bullish Flag pattern.  The recent rally above $1400 confirmed the new Bullish Price Trend for Gold which indicates global investors are becoming more fearful of a crisis event or some other type of economic uncertainty.

We believe the next move high in Gold will push prices above the $1625 level, then above the $1745 level.  If that happens, we’ll know the fear of some type of crisis event is very real and that the Bullish major trend in Gold may continue for many years to come.

We just posted a much more detailed report on the new 7-year bull market starting for gold and mining stocks, which if you have not yet seen take a look at the charts.

As much as we like to think that Gold leads the market in terms of measuring fear and uncertainty, Corporate Bonds also share a role in the understanding and future expectations related to economic capacity.

If Corporate Bonds begin to sell-off before a major downside market trend begins, it represents a fear that future earnings and the ability to support/service corporate debt levels may be at risk.  The way I explain this to people is that it is like a ship “battening down the hatches” and securing the cargo before entering a major storm.

A Corporate Bond sell-off indicates that global investors believe the economy is grinding to a halt and that earnings going to decline – thus putting debt at risk of failure in the future and this is why investors sell their bonds, and they they typically move before the stock indexes do. Think of high yield bonds as a leading indicator by a few days.

HIGH YIELD CORPORATE BONDS – POTENTIAL MAJOR BREAKDOWN

This HYG chart highlights the support channel in Corporate Bonds that appears to be at risk of being broken.  If a breakdown in price happens, this downside rotation in HYG would be a very clear warning that the US and global stock markets may be entering a serious price correction period.

If Bonds were to move dramatically lower while Gold rallied, we can only interpret this as fear has really begun to hit the markets and traders are panicking.

TRANSPORTATION INDEX – ECONOMIC LEADING INDICATOR

Lastly, take a look at this Transportation Index chart and pay very close attention to the Head-n-Shoulders pattern setup on the right side of the chart.  You’ll see a similar Head-n-Shoulders pattern in May 2019 – just before a moderate downside price rotation.

As we move into the end of this year with liquidity diminishing and volatility starting to increase, the potential for a dramatic price sell-off becomes even greater.  The lack of real market depth and liquidity, as well as this “early warning” set up in the charts, suggests a market breakdown event may be happening right before our eyes. It also may not happen, which is fine also.

As technical traders we do not require price to move in any one direction, we simply follow price and bet on the direction it’s moving. But if we do get a breakdown here it could be really exciting especially if you have a trade or two on the right side of the market.

The cross-market Technical Analysis and the chart patterns are suggesting that a peak has set up and that future expectations are much weaker than they were 14 to 18+ months ago.

We recently published this article highlighting some of our proprietary Indicators and Indexes suggesting this recent rally in the US stock market may have been a “euphoric zombie-land rally” with no real support behind it.

Dec 2, 2019: IS THE CURRENT RALLY A TRUE VALUATION RALLY OR EUPHORIA?

If our analysis is correct, and we get the drop in stocks, it could be a very big downside move.

We believe these charts confirm that price and Technical Analysis are screaming an “Early Warning” signal that price weakness is setting up in the US and global markets.  We believe the continued lack of liquidity throughout the Christmas holiday season may prompt a very big breakdown price move at any time in the near future.  When any one of these charts begins a price move to confirm these predicted setups, it won’t take long for the bigger major trends to follow-through.

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. This week we entered two new trades and it’s not too late to get into them before they run higher!

We’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Round or Gold Bar Shipped To You!

Chris Vermeulen
Founder of Technical Traders Ltd.
www.TheTechnicalTraders.com

In Part I of this research post, we highlight how the ES and Gold reacted 24+ months prior to the 2007-08 market peak and subsequent collapse in 2008-09.  The point we were trying to push out to our followers was that the current US stock market indexes are acting in a very similar formation within a very mature uptrend cycle.

We ended Part I with this chart, below, comparing 2006-08 with 2018-19.  Our intent was to highlight the new price high similarities as well as the price rotation similarities between the two critical peaks in market price. We are terming the current market a “Zombie-land” because it appears global investors are somewhat brain-dead as to the total risks that are setting up in the global markets right now. But, wait before you continue reading make sure to opt-in to our free market trend signals newsletter.

Forward guidance is waning. Earning expectations are decreasing.  Debt levels are skyrocketing all over the planet.  Global banks are continuing to move into more Quantitative Easing measures to attempt to spark growth.  The equity markets are 9+ years into a rally while the global central banks are 10+ years into some form of continued QE efforts.  Global economic data suggests a moderate downturn in economic activity and growth for many foreign nations.  We believe the next crisis will not originate in the US, but from outside the US.  We believe the risks associated with the massive debt levels in the foreign markets will be the reason for another price decline.  Quite possibly, a commodity price collapse (think OIL) will become the catalyst for this event.

IF OIL WERE TO FALL BELOW $45…

If Oil were to fall below $45 (eventually possibly flirting with the $30 price level) as our predictive modeling suggests, then we believe many foreign nations will suddenly become serious risk factor related to debt/credit and could potentially create a domino-process where the US/Global markets collapse on this new risk factor. Our last predictive model signal was for natural gas and we just close out the trade locking in 19% profits this week.

IS 2007 SETTING UP ALL OVER AGAIN?

But what if this is 2007 setting up all over again?  Take a look at the ES chart above – where a peak setup in May/June 2007, followed by a deep price correction.  Follow that price move even further to see how price rallied to a new all-time high throughout July, August and most of September before setting up in a deeper price rotation in late September and carrying forward into October.  Now, take a look at this current ES Weekly chart to see if there is any similarity between them.

GOLD UP 50% FROM ITS LOWS ALREADY

Gold has already rallied nearly 49% from the 2015 lows and the recent price rotation is somewhat similar to what happened to Gold in 2006-2007.  The extended base that set up between 2017 and 2018 could be interpreted as a similar type of base that set up in 2006-07.  The current rally is somewhat similar to what happened in late 2007 and early 2008 when the US stock market began to collapse volatility expanded in a strong uptrend which was followed by a moderate price retracement before Gold began a rally totaling more than 250% from the base/bottom.  Is this setup happening again right now?

WEEKLY NQ CHART SHOWS THE EXTENDED MELT-UP

This Weekly NQ chart shows the extended melt-up that is taking place after the October to December deep price rotation that took place in 2018.  We believe this deep price rotation is similar to the deep price rotation that happened between July and September 2007.  The subsequent “melt-up” process is a function of the “zombie-land” function of price and bias.  Investors chase after security and returns by pushing the price higher and higher when fundamentals and expectations don’t align with these expectations.  This same type of “zombie-land melt-up” happened in 2007 as well.

We understand the implications of this research post and want to warn all of our followers they need to be extremely cautious of the current market setup.  Even though the US stock market may continue an upside bias within a melt-up process, we believe there are very strong underlying risks in the markets that could prompt a very deep price correction.

THE US FED IS NOT LOWERING RATES BECAUSE …

The US Fed is not lowering rates because of market strength and super strong forward guidance.  They are lowering rates because they believe risks exist in the debt/credit market and are trying to stay ahead of a big problem – a potentially very big problem.  The overnight REPO market has been a topic for our researchers for the past 45+ days as this temporary institutional debt tool has exploded recently.  Now, the US Fed has actively decreased rates and has begun acquiring more debt on its balance sheet.. hmm.  That seems strangely similar to another credit/debt crisis event.

(source: https://thesoundingline.com/october-saw-the-largest-increase-in-feds-balance-sheet-since-the-financial-crisis/)

We know many of our followers may consider this just another warning from a bunch of doom-sayers again.  We’re not wishing for this outcome – trust us.  We simply look at the technical data, determine a probable outcome and present our findings to our followers to try to keep them informed.

Too many similarities are starting to align to make this just some strange coincidence.  Too many unknowns and uncertainties are aligning just 12 months before a US presidential election cycle.  It seems strangely familiar to us that these same types of price events are unfolding now.  If there is no correlation then we’ll likely be incorrect in our analysis.  But if we are right and there is a major price reversion event setting up, we think it is wise to alert as many of our friends as possible.

Keep reading our research because our proprietary tools have been nailing all of these price targets and move many months in advance.

I urge you visit my ETF Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Bar!

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

Chris Vermeulen
www.TheTechnicalTraders.com