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Critical Price Level Could Prompt A Big Move After Holiday

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

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

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

SPDR S&P500 ETF WEEKLY CHART

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

TRANSPORTATION INDEX WEEKLY CHART

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

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

ISHARES RUSSELL 2000 ETF WEEKLY CHART

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

CONCLUDING THOUGHTS:

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

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

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

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

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

US Markets, Metals, and Oil

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

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

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

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

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

Chris Vermeulen
Chief Market Strategist
Founder of Technical Traders Ltd.

US Stock Market Enters Twilight Zone

The US stock market has rallied substantially since the bottom on March 23, 2020.  Our Adaptive Fibonacci Price Modeling system is showing us just how fragile the US stock market and certain sectors of the markets really are right now.  What’s going to happen next and how should you prepare for the next big move?  Let us try to explain our beliefs.

First, the US stock market bottom just as the US Senate and Fed announced major stimulus packages designed to support the collapsing markets.  Everything done prior to the March 23 date was “fodder” as the risk to the global markets was far greater than anything the US Fed or global central banks could muster.  On March 23, the US Fed initiated an unlimited asset purchase program to support the failing markets.  This changed the perspective of traders/investors immediately – but it also created a massive risk factor that few even considered. For a complete timeline on the US Fed actions, review this link.

Our own research team was calling for a breakdown in the US and global markets many months in advance of this move – even before the world knew about the Chinese/Wuhan virus event.  Take a look at some of our research posts from the past

January 26, 2020: The Black Swan Event Begins

January 29, 2020: Are We Setting Up For A Waterfall Selloff?

February 18, 2020: Is The Technology Sector Setting Up For A Crash? Part II

Less than 3 days prior to the massive selloff event, we posted this:

February 24, 2020: Has The Equities Waterfall Event Started Or A Buying Opportunity?

Today, we are posting this research article to highlight the unique setup in many of the major US stock indexes and sectors.  Using our Adaptive Fibonacci Price Modeling system, two things become clearly evident in the charts…

A.  Price must hold above support levels (the upper TRIGGER ZONE level and/or the GREEN Fibonacci Trigger level on the right side of the chart) in order for the uptrend to continue.

B.  Price has already reached (in most cases) the CYAN Fibonacci projected target level and this level may turn into major resistance pushing the price back into a downtrend.

BEFORE WE CONTINUE, BE SURE TO 
OPT-IN TO MY FREE MARKET TREND SIGNALS 
SO YOU DON’T MISS OUR NEXT SPECIAL REPORT!

DAILY SPY CHART

This first Daily SPY chart clearly highlights the setup we are describing.  First, take a look at the CYAN line on the chart near the 282.97 level.  This Fibonacci target level becomes support when price moves above it and becomes resistant when price moves below it.  Currently, the SPY is trading very near to the 283 level and we believe this level may turn into massive resistance over the next 5 to 10+ days.

Secondly, take a look at the TRIGGER ZONE on this chart (a price zone drawn between the Bullish and Bearish Fibonacci price trigger levels).  This zone represents a very dangerous price area where the overall price trend may change directions and where volatility could explode. As long as the price stays above this zone, then moderate bullish price activity should be expected.

If the price falls below this zone, then moderate to strong bearish price activity should be expected.  The reason why the downside risk is much greater than the upside potential is because of the recent downtrend in the market that sets up a “recent higher high” near 295.50.

MONTHLY SPY CHART

This Monthly SPY chart highlights the longer-term Fibonacci price analysis.  The extreme breakdown in price has already broken below the RED Fibonacci Bearish price trigger level near $300 and broken through the BLUE initial target level near $279.00.  The next downside price target levels are GREY, near $173.40, and RED, near $128.00.  Currently, the SPY price has rallied back above the BLUE target level and is stalling near $282~285.  This price level is already below the $300 Bearish Trigger level – which suggests further downside price activity in our future.

Additionally, pay attention to the “arcs” that are on this Monthly chart.  These are our proprietary Fibonacci Price Amplitude Arcs that show us where price may target based on a theory that each price trend creates “price amplitude waves” into the past and future.  Currently, the “4D” area on this chart is our most likely bottom area.  There is also a “1.618” GREEN price arc that is just above the current price level (near $292).  We believe this Green 1.618 level is acting as major resistance and that price will reverse back to the downside within a 5 to 10-day window.

WEEKLY TRANSPORTATION INDEX CHART

This Weekly TRAN, Transportation Index, chart highlights a similar pattern but also shows how much downside pricing pressure is still evident across different sectors of the markets.  Even though the ES, NQ, and YM have rallied to near 50% to 61% of the initial downside price move, the Transportation Index has only recovered to the 38.2% Fibonacci Retracement level.  This suggests that the US Fed and global central banks have poured capital into the blue chips and technology sectors while leaving much of the broader market bloodied and on the sidelines.

A similar type of setup is appearing in this TRAN chart.  The CYAN target level has been reached and the price has stalled just above this level.  The TRIGGER ZONE is clearly evident on the chart and the price is slightly above that level right now.  Very clear downside price targets are evident (RED, Blue and GREY) and any price move below $7565 will likely prompt a much bigger downside price move.  What we are seeing in the markets is that any substantial downside price rotation will potentially set up a much bigger downside price collapse in the US and global markets.

WEEKLY XLF CHART

This Weekly XLF chart, the Financial Sector SPDR ETF, sets up almost identical to the TRAN chart.  Deeper price targets, the price has already reached the CYAN target level and stalled recent downside price rotation, and a very real possibility that any downside price move could breach the Fibonacci Bearish Price Trigger Level near $21.

What happens if, suddenly, the US and global markets roll lower by 5% to 10% and a new wave of selling panics the markets?

CONCLUDING THOUGHTS:

The answer is that the US and global markets will attempt to reach the most recent low price levels, or one of the deeper Fibonacci bearish target levels on these charts, and attempt to find support (or true market value) before attempting any move higher.  One must understand that until price shows us that it is capable of rallying above all-time highs, there is still a very real risk that another downside price move could take place.

These TRIGGER ZONES are key to understanding where the fragile balance in price is located on these symbols. As long as price stays above this zone, then continued bullish price action should be expected. If the price falls below this zone, then more downside price activity should be expected.

If you pay very close attention to almost all of these charts, you’ll notice that the next Fibonacci upside price targets (above the CYAN level) are well above the most recent all-time high levels.  This suggests that price will have to rally well above these all-time high levels to qualify the next bullish price target.  It could happen if the global markets recover much quicker than we expect and the earnings/GDP damage is minimal.  But given what we believe is really happening throughout the world right now, the downside targets seem more realistic outcomes (unless the US Fed and global banks absorb $40 to $50 Trillion in global risk assets over the next 60 days.

Watch how the markets react to these price levels and how the longer-term price pivots setup on these Weekly/Monthly charts.  The price will tell us where it wants to go.  We just have to be on the right side of the move so we don’t get slaughtered by a sudden price move.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is an incredible year for traders and investors.  Don’t miss all the incredible trends and trade setups.

Subscribers of my ETF Swing Trading Newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. This week we closed out SPY ETF trade taking advantage of this bounce and entered a new trade with our account is at another all-time high value.

Ride my coattails as I navigate these financial markets and build wealth while others watch most of their retirement funds drop 35-65% during the next financial crisis.

Just think of this for a minute. While most of us have active trading accounts, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during the next bear market, you could lose 25-50% or more of your net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Must Watch Market Analysis Videos: Gold, Silver, S&P500, Oil

Here are a few of the best videos right now on where the financial markets are going next and how to trade them stress-free and with a trading plan.

This covers the S&P500, bonds, gold, silver, miners, natural gas, and crude oil

WHAT YOU NEED TO KNOW ABOUT THIS POTENTIAL MARKET TOP

KILLER MARKET ANALYSIS ON PREDICTING PRICE THIS WEEK

HOW TO TRADE THE MARKETS, AND WHEN DO METALS GO BALLISTIC?

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

The Fed Induced Twilight-Zone

The past three weeks have been filled with intense drama, incredible highs and lows, political battles that continue to this day, and millions of questions from people throughout the world.  Throughout this COVID-19 virus event and the collapse of the US and global markets, one continued belief has prevailed – the US Fed will attempt to rescue the global markets (again).

Late last week, President Trump announced a task force to evaluate how and when to reopen the US economy and more than US nine states have already committed to a staged reopening process.  COVID-19 virus being what it is, the US is going to attempt to lead the way forward.  This means every resource and every effort will be taken to engage in a proper process to protect our future while battling this virus outbreak.

This was also a pivotal week for the US Stock market. With the US Fed in buying mode attempting to counter the recent weakness in the markets, literally trillions of dollars have poured into the US stock market over the past 5+ days.  The Dow Jones Industrial Average rallied 532 points (+2.2%).  The NASDAQ rallied 581.50 points (+7.06%). The S&P 500 rallied 89.25 (+3.2%).  Obviously, capital is pouring into the NASDAQ faster than the other major indexes and this suggests investors believe in the earnings and future capabilities of technology companies over more traditional market segments.

Continued global economic weakness and shuttered US states will have a chilling result on Q2 outcomes and revenue growth.  We continue to believe Q2 and Q3 of 2020 will be much weaker than investors are expecting and we believe the US Fed has lulled many investors into believing a “deep V bottom” is the most likely outcome.  Over time, we believe the loss of 20+ million working Americans and the destruction of the shuttered global economy will translate into much weaker global market price levels.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

NASDAQ (NQ) WEEKLY CHART

This NQ weekly chart highlights the real potential for downside risks.  The appreciation in price from the 2016 levels are a direct result of investor anticipation of growth after the 2016 election.  What’s changed is that a major risk to the markets has unraveled more than all the growth we’ve accumulated over the past 2+ years.  Investors should stop to consider the real economic outcome over the next 2+ years before jumping into the Fed-backed Twilight Zone.

As the total scope of the global economic environment continues to shift, it does make sense that certain technology companies may benefit from any type of extended virus event.  Gaming companies, technology suppliers and resellers, certain software companies and a host of streaming and content firms may gain users and incomes over the next 12+ months.  Yet, we continue to believe the COVID-19 virus event may continue to present risks in the markets going forward.

The NY Federal Reserve issues a GDP Nowcast which attempts to translate forward economic GDP outcomes in near-real-time.  The current level for Q1 2020 GDP is -0.4% and -7.9% for Q2 2020.  This suggests the second, and possibly third, quarters could be substantially weaker overall than what we’ve just experienced over the past 50+ days.    Even though the stock markets began to collapse on February 25, 2020 – we really didn’t begin to understand the total scope of the economic contraction until nearly the middle of March (very late in Q1).  Q2 may reflect the complete global economic burden of this virus event and we believe investors are failing to comprehend the total scope of this risk at the moment and how it relates to future earning capabilities.

Weakness in Q2 and possibly Q3 earnings for 2020 could have a shock-wave across many sectors of the US and global markets which we are somewhat blindly ignoring.  Asset values, belief in a “V” type bottom setup, lack of disruption for state and local governments and others seem to continue to be the prevailing attitude.  With the US Fed to the rescue, somehow investors seem to believe the recovery process will only take a few weeks or a few months.

We found this information very interesting in terms of how local governments generate revenues and how the virus event may present a very real 20 to 40% revenue contraction for state and local governments over the next 24+ months.  Based on this data, nearly 40 to 50% of annual revenue to state and local governments may be at risk.  When we consider the 20+ million people in the US that have recently filed for unemployment (nearly 6% of the total US population and 8% of the total working population), we can’t expect a stellar economic output.

S&P 500 (ES) MONTHLY CHART

This ES Monthly chart highlights our expectation that the US Stock market will attempt to establish a deeper bottom in price that may take the form of a FLAG formation setup.  We don’t believe the continued disruption to the global markets will do anything to support the past 3+ week recovery in the US markets.  Global investors will likely end up backing the US as the leader in this recovery, yet we believe the actual bottom in the markets will take place over the next 12+ months and likely complete just before the November 2020 elections.

CONCLUDING THOUGHTS:

Our proprietary modeling systems have reflected the recent strength in the US stock market adequately – yet they have failed to result in any changes regarding allocation into the markets.  For right now, everything stays the same as it was.  We do believe the Fed’s buying will potentially prompt a “false trigger” if the rally continues.  We will assess the trigger when and if it happens in the near future.

Until we get a more accurate understanding of the risks, we feel it is much safer to assume the worst-case scenario going forward.  There is simply no way to paint a positive picture when people throughout the globe are losing their jobs, incomes, and all sense of normalcy.  The reality is that this disruption in the global banking and financial sector is certainly a big one that could last well into summer. If you read this article or watch the video you will understand the magnitude of this market top that looks to be forming.

As of right now, skilled investors are preparing for a potentially deeper price bottom and watching what is happening in the markets with interest – waiting for the right trigger to jump on the next big trend.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

The Next Big Breakout Trade: Large Cap Gold Stocks

This technical analysis video I put together has a lot of great trading opportunities in it while providing a lot of educational content to help you see the markets and trade in a way that will reduce your risk/exposure when needed.

I use my BAN trading strategy which is I focus on the Best Asset Now and only trade the sector, index, or commodity that has the least risk and most upside potential at the current moment.

I won’t lie, im super picky and conservative so trades are few and far between but as a swing trader, or any trader for that matter, the quality of a trade alert trumps quantity. Watch this video below and see what I provide my subscribers every morning before the opening bell. If you like it, then join us and become a technical trader today!

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

AI Trading System Using Fibonacci Theory Forecasts Future Gold, Silver & Stock prices – Part IV

As we’ve attempted to illustrate the intuitive nature of the Adaptive Fibonacci Price Modeling system we as one of the tools to help us understand the markets and price setups, we now want to more clearly illustrate other components of the current global economic environment.  We want to illustrate just how deep the current price move resonates against historical price norms.

In Part I of this article, we highlighted the Fibonacci system running on the ES (S&P 500) charts.  The point of this example was to show that a new price low had already been established and a recent new price high (the all-time high peak) was now acting as a critical price peak.  This suggests we are in the process of establishing a much deeper price low (bottom) that may come over the next few weeks as price attempts to “revalue” current economic expectations.

In Part II of this article, we highlighted the Fibonacci Price Theory concepts and attempted to teach you how to identify major and minor Fibonacci price pivot points.  This was done to help you understand what we are attempting to share with you and to help you learn to use these techniques in the future.  The conclusion of that, Part II, shared our expectations that a new, deeper low, would likely set up in the ES and NQ markets as price attempts to establish a future bottom setup.

In Part III of this article, we shared with you the NQ (Nasdaq) Fibonacci price analysis which was similar to the ES charts.  We are attempting to share with you the reality that price will setup intermediate high and low price pivots over time.  But we are really trying to explain how the major price pivots have now set up as a massive warning that a deeper low may be targeted as long as price fails to recover to levels near the all-time highs.  As “obvious” as that may seem to you now, many traders are already entering the markets expecting a recovery similar to May 2018 or January 2019 to begin.  We urge you to reconsider the scope of this disruption of the global economy.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

WEEKLY CHART OF OUR CUSTOM SMART CASH INDEX

The first chart we want to share with you is a Weekly chart of our Custom Smart Cash Index.  This chart clearly illustrates just how destructive the recent collapse in the global economy has been.  Previous downside price rotations (Feb 2018 & October~December 2018) prompted downside price moves that stayed within the upward sloping price channel established from the 2015~2016 price range setup.

We believe this new downside price cycle will establish a new support channel for future price growth that may include a transition away from traditional economic measures.  Essentially, a “new normal” related to debt and economic expectations.

We believe this COVID-19 virus event may be unwinding a large portion of capital appreciation that originated back in 2000~2002 – after the DOT COM and 9/11 Terrorist attacks in NY.  Since that time, the US Fed and global central banks have engaged in a series of QE experiments designed to spark economic activity.  We believe the core element of the current COVID-19 economic contagion is not related to the central bank’s inability to print more money to throw at the problems in the markets.  The problem exists that a healthy market must remove risky debt/credit issues and unhealthy deficits in order to sustain real forward growth opportunities.  See this ZeroHedge article for a clear example of what we are attempting to explain: www.zerohedge.com

Looking at some of the charts from the ZeroHedge article, it becomes clear that real economic growth (in relation to proper debt expansion and economic function) likely completed a transitional cycle end near 1999~2002.  This came after the US Fed reached peak interest rate levels in the early 1980s and began a deficit spending binge that continues till today.  As credit/debt became the new norm, we can see how the expansion of credit created a broader expansion of capital valuation levels (global stock market prices) and provided for an expansion of derivatives and global shadow banking operations.  Debt begot more debt/credit – which begot more debt/credit.  And the cycle continues until it breaks.

We believe the unwinding process of the global credit market is really just beginning.  The COVID-19 virus event was just the catalyst for this event.  The virus event prompted a collapse in the global economy because of the global economic shutdown that took place to prevent the spread of the virus.  This shutdown strained the global economic/credit market and continues to do so today, by exposing many at-risk companies and business enterprises that were operating on the “fringe” – that space where lack of consumer engagement creates a void in income while debt levels continue to plague future operations.  We believe this process of UN-leveraging debt will continue until the markets decide a suitable amount of risk has been removed from the markets.  This is when global economic expansion and growth will begin to take hold.

WEEKLY CUSTOM VOLATILITY INDEX – DELEVERAGING IS THE NEW NORMAL

This Weekly Custom Volatility Index highlights the potential for a “new normal” range as the recent deep low levels on this chart suggests a “deleveraging” process is currently taking place.  Even as the US Fed and global central banks pour trillions into the markets, this Custom Volatility Index continues to suggest deleveraging is still ongoing throughout the global markets.  Our research team believes the US Fed and global central banks are simply sucking up the immediate risk “froth” in the global markets while the “real meat” of the issue still persists.

PRECIOUS METALS ANALYSIS POINTS TO HIGHER PRICES LONG TERM

This analysis leads us to Precious Metals – yes, we know, everyone is talking about Gold and Silver right now.  Yet, the real reason we are talking about Gold and Silver is because we believe the current economic environment will present an incredible (once in a lifetime) opportunity for skilled traders.  Once you truly understand the process that is taking place throughout the globe and how debt/credit expansion over the past 45+ years has propelled the capital markets to massive highs while the metals market has been ignored.

Recently, Gold has rallied to a 6+ year high and Silver is still trading near multi-year lows.  The reality is that the global stock market is about to experience a credit/debt revaluation event that is unlike anything we’ve seen since 1929 and/or WWII.  Precious metals are about to enter a phase that has never been experienced in recent history.  What happens to safe-havens throughout the process of a global market credit/debt crisis event?  What happens to metals as the global economy attempts to wash-away excessive debt, derivatives and shadow banking risks that have built up over the past 40+ years?

CONCLUDING THOUGHTS:

If we are correct and our Fibonacci price modeling systems are correct, a deeper price low in the global markets is about to set up that will attempt to force a “wash-out” event in the global credit/debt markets.  This process will likely send precious metals skyrocketing higher.  The unknowns of this process are the same unknowns that happened after 1929 & WWII – what will the new financial functions and societal structure be composed of?  Until that side of the future becomes more clear, expect a number of unknown factors to continue to drive excessive volatility and risk in the global markets.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Adaptive Fibonacci Suggests A Deeper Bottom Will Setup

Our Adaptive Fibonacci Price Modeling system suggests a much deeper price move is in the works and the current price rally will likely end near resistance levels identified by the Adaptive Fibonacci Price Modeling system.  We are posting this research post for friends and followers to help them understand the true structure of price and to allow them to prepare for what we believe will become a much deeper downside price move in the future.

Fibonacci Price Theory teaches us that price moves in waves within up and down price cycles.  The recent peak in price, near February 25, 2020, has resulted in a very deep -36% price collapse in the S&P 500 (ES) recently.  This downside move has been mostly straight down, excluding a brief retracement in early March.  The strength of this downside price move suggests a moderate upside price recovery will take place before the next downside leg sets up.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

S&P 500 WEEKLY CHART OF 2008-09 CREDIT CRISIS MARKET COLLAPSE

Throughout the 2008-09 Credit Crisis market collapse, prices staged multiple recovery attempts within the downward price trend.  The first, after the initial -20.88% selloff in late 2007, resulted in a +14.83% price recovery that lasted for over 15+ weeks.  The second recovery, near the end of July 2008, resulted in a +9.56% recovery after a nearly -17% price decline.  After this brief recovery in July 2008, the price collapsed by a massive -44% from August to November 2008.

DAILY S&P 500 CHART

This Daily ES chart highlights the first two levels of resistance at 2700 & 2870 that could stall the rally and prompt a downside price move in the future. Support is currently at 2450.  We believe the 2700 level will act as a soft ceiling in the ES where price may attempt to rally, briefly, above this level, which it did yesterday, then pull back and pause as selling pressure re-enters the market.  The 2870 level may act as a hard ceiling where price may attempt to reach this level, but immediately reverse back to the downside.

Overall, we believe continued selling as a result of forward global economic expectations is the most obvious outcome where a deeper price bottom will setup sometime later this spring or early summer.

WEEKLY S&P 500 CHART

This Weekly S&P 500 chart (ES) shows a possible outcome for price going forward if another downside move starts.  A new downside price move to levels near to, or just below, the 2015~16 low price range is not unreasonable. From this level, we believe a “Flag” formation will setup creating an extended price bottom pattern down at those extreme lows.  We believe this “Flag” formation will end near August~October 2020, just before the 2020 elections and prompt the beginning of a new upside price recovery in the US and global markets.

This is a large forward-looking projection and you may be rolling your eyes, but they are very possible. In fact, last year we predicted the months and price levels in which gold and oil would start new major trends, and we did this 8 months before they took place, similar to what we are proposing here.

CONCLUDING THOUGHTS:

The rotation in price setup by this brief upside price move will set up a new Fibonacci downside and upside price target range.  We believe it is essential for price to continue this type of rotation as the eventual bottom sets up in the US and global markets.  We believe the true price bottom will happen only after the virus event has subsided and global economies begin to start functioning like normal again.

Currently, there is simply too much of a world-wide disruption to expect that the bottom has already set up near last year’s (2019) brief price lows.  The scale and scope of the current downside price collapse do not properly reflect the total scope of this global virus event yet – it is still a reactionary move in price that has yet to properly digest the total scope of the global economic disruptions. There is a chance for stronger bounce/rally in the next few weeks/months if the virus can start to be contained, and that will continue to mimic that of the 2000 tech bubble. Believe it or not, there is a big similarity to what happened then, to what is happening now in terms of price action and market sentiment. Read article and see these charts.

In other words, we believe more selling will be seen in the global markets and more economic contraction will take place until we are safely beyond this virus event.  The longer the global economic shutdown continues, the more likely we are to see a deeper price bottom in the future and the more likely we are to see more extensive economic collateral damage across the world. No matter which way the markets move we will follow and trade the price action and profit. That is the benefit of following price vs trying to trade prediction, fundamental data etc.

In Part II of this research article, we’ll dig deeper into the underlying components that support our research.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Cash Is King, Not Gold, Not Bonds

Exactly one month ago, on February 20th, the SP500 made an all-time high and reversed its trend to the downside. What a wild ride the last month has been across virtually all asset classes.

Out of all the major indexes, commodities, and currencies, only one asset and trade moved higher. It’s no surprise given the title that cash or the US Dollar is the asset of choice having rallied over 9% while everything else fell with bonds down 22.75%, stocks 30%-40%, gold miners 58%, and crude down 62%.

My team and I have talked about this rotation to safety into USA/US Dollar) since the lows back in 2018. During the recent stock and commodity price crash, we have seen where investors are dumping their money. It’s not gold, it’s not bonds, but the US Currency. Stocks and commodities are being sold around the globe, and that money is buying up the US dollar.

US DOLLAR RISES ABOVE THE REST
PROOF THE GREENBACK IS STILL THE #1 CURRENCY WORLD WIDE

DAILY S&P 500 INDEX – SUPPORT, BOTTOMING SIGNAL, AND RESISTANCE

The 30+% correction in the ST&P 500 index has been an extraordinary event. Those who have proven trading strategies and abide strictly to position, and risk management rules have been able to not only avoid the market crash but profit and reach new account highs. While those who trade for the thrill, expect oversized gains regularly, and who don’t have a clear trading plan or position management are suffering from the recent selloff.

Last night I watched a great video talking about performance and the winning mindset that both traders and top athletes share. The different ways someone can trade profitably in the markets is fascinating. If you want to be inspired to be a better person and trader, take a look at this video by Real Vision with Dr. Gio Valiante.

Ok, so let us jump into the charts. As a technical analysis and trader since 1997, I have been through a couple of bull/bear market cycles. I have a good pulse on the market and timing key turning points for short-term swing traders and long-term investors.

As you will see from the chart below, I keep things easy for you to see visually and get the idea of what to expect moving forward. The green line is a very significant long term support level on the S&P 500 index. Knowing that price has fallen straight down to this level gives us a much higher chance of a bounce at a minimum.

Trade Tip: The faster the price moves to a critical support or resistance level, the higher the chance you will have a bounce back from that level for a candlestick or three.

The pink arrow on the chart points towards a candlestick pattern, which I call Tweezers. These should be seen as a possible reversal signal.

Lastly, is the red resistance zone. I know it’s a huge range, but at this point, it’s the area we will zero in on once/if price starts to near that level.

30 MINUTE S&P 500 TRADING CHART

This chart is the 30-minute chart of the index and only shows regular trading hours between 9:30 am ET and 4 pm ET. While this is only 1/3rd of the trading day for futures, it is when the majority of contracts/shares are traded, so that is my main focus for analysis.

Since 2001 I have been building and refining my trading strategies to make them somewhat automated. This chart below shows my trend colored chart, which is the basis of my trading for almost all asset classes. What the S&P 500 does directly relates to how I trade or avoid other asset classes.

Recently, we created a market gauge showing you visually where the market is within its 30-50 day price cycle.

When the trend changed, and the bars turned orange on Feb 25th subscribers, and I closed our equities position because they were now out of favor. This allowed us to avoid the market crash through trend analysis, and from our trailing stop order.

FIRST WAVE OF SAFETY WAS IN BONDS

The two charts below of bonds show the same trend and trades but share some different trading tips.

The first 30-minute chart shows a pink line, which was our trend trade. The strategy is to look for large patterns, wait for a trend change, and then take advantage of the new trend. This trade we entered mid-January.

The key points from this chart are to know when the price goes parabolic in any direction and with huge price gaps, know its time to start scaling out of a trade, or close it.

BONDS DAILY CHART – SPOT LARGE PATTERN, TRADE THE BREAKOUT

The second point is that you must have a trading plan and actively manage your trade by moving up protective stop orders, so when price corrects, you are taken out of the trade automatically.

This daily chart of bonds shows the large bullish chart pattern (bull flag). I waited for price to breakout, the trend to turn green, and then entered the trade using Fibonacci extensions for price targets, which I have found are the absolute best way to spot our price targets. If bonds were to rally to the 100% measured move, we would close the trade, and that is what happened exactly.

A few things took place at that price level, which has the charts screaming at me to sell. First, the 100% target was reached. The second was that price was going parabolic with a 10% gap higher above my target, and volume was extremely high, meaning everyone, including their grandmother, were buying bonds. If everyone is buying the same thing, its time to move on to a new chart.

GOLD AND GOLD MINERS AS A SAFE HAVEN

While subscribers of my ETF trading signals and I profited on GDXJ as an early safe-haven trade exiting our position at the high tick of the day before it reversed and fell 58%, most traders I know still hold their gold miner’s positions.

For most of us, it is tough to sell a winning trade, and it is even harder to sell a losing trade. And knowing most trades will turn into a losing trade if you hold them long enough, the odds are clearly stacked against you as a trader.

This pullback in metals and miners, which turned into something much larger than I ever expected, is a huge shock to most people. The reality is history shows during extreme volatility/fear both gold and bonds collapse, and it is nothing new or unexpected.

In fact, I posted a warning that both will fall two days before they topped and collapsed in this special report.

CONCLUDING THOUGHTS:

In short, we are experiencing some unprecedented price swings in the financial system, but other than extra-large market selloffs, and rallies the charts are still moving and telling us the same things for trading and investing.

There are times when the markets are untradable as a swing trader, which is has been the last 15 days because of how them market has been moving. It is a fantastic time for day traders, but with some sectors moving 10-25% a day back to back like the gold miners or crude oil, it is high-risk trading (gambling) right now.

With all that said, my inter-market analysis is pointing to some tradable price action potentially starting next week. The potential is larger than normal because price volatility remains elevated, meaning 10-20% moves over a week or two are expected.

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

Chris Vermeulen
www.TheTechnicalTraders.com

Is This A Bear Market When Stocks Crash 20% and Bonds Spike 30%

It is another blood bath in the markets with everything down, including TLT (bonds) and gold. Safe havens falling with stocks is not a good sign as people are not comfortable owning anything, even the safe havens, and this to me is a very bearish sign.

Now, with that said, this is one day one of this type of price action and one day does not constitute a new trend or change the game, but if we start seeing more of this happen, we could be on the verge of the bear market we have all been expecting to show it ugly face.

The SP500 (SPY) is down 19.5% from the all-time high we saw just three weeks ago, and the general bias for most people is once the market is down 20% that is a new bear market. I can’t entirely agree with that general rule. Still, a lot of damage is happening to the charts. If price lingers down here or trades sideways for a few months I will see it as a new bear market consolidation before it heads lower, and we start what could be very deep market selloff and test 2100 on the SP500 index (SPY $210) for the next leg down looking forward several months.

20% STOCK MARKET CORRECTION ARE NOT BEARISH

Just because the markets have a deep correction of 20% does not mean its game over for stocks. Just take a look at the chart below on what happened the last time the market corrected 20%. As you can see, they were the biggest and best investor opportunities over the past 12 years. Today, my friend called and said they heard on the news that we are now officially in a bear market, and what should he do?

20% CORRECTIONS CAN TURN INTO A BEAR MARKET – BE READY

The SP500 fell 20% in 2001 and again from the 2007 high its lows, then bounce 10% – 14 over the next few months before rolling over to start its first bear market leg. I feel something similar will happen this time, which would put us a few months before the price should test these lows again and breakdown to give us optimal time to reposition our long term portfolio.

Once we do start a bear market, you will notice price moves very differently from what we have experienced over the past 12 years. How you trade now likely will be a struggle to make money. If you try to trade bonds, they are relatively tricky because of how they move during a bear market. The stock market can fall for a year, and bonds are still trading at or below the price they were when the bear market started. This different price action is what happened in 2001-2002, and again in 2008.

BONDS GO BALLISTIC

Bonds also take on the price action similar to how the VIX trades with violent price spikes only to fade back down again quickly, and this generally happens near the end of a bear market, or extreme selloff like we are in now. Heck bonds (TLT) jumped 30% just in the past few weeks, we caught it, but most traders missed this move. You need to understanding market sentiment and how to trade bear market type price action because that is how the market is moving this week, and trading/chart patterns become more sentiment-driven than logical trading setups and trades become counterintuitive.

I also traded GDXJ for a 9.5% gain and closed that position at open for the high tick with my followers, and we didn’t follow my proven trading rules for price targets, trailing stops, and reading the market sentiment we could be down over 30% today which I know many traders are simply because they lack control of their trading (no defined rules, fall in love with positions). I’ll be doing a detailed gold and gold miners article so stay tuned!

Be sure to opt-in to our free market trend signals before closing this page, so you don’t miss our next special report!

CONCLUDING THOUGHTS:

I share this analysis, not to scare you, but let you know where we stand. The stock market is treading on thin ice, and if/when it breaks down, a new bear market will have started. Remember, we are still in a bull market, but the coronavirus is stopping businesses, which means earnings will be poor, and that is why stocks are falling. Investors know stocks are worth less money if they make less money; it is that simple.

The type of market condition I think we have entered could be here for a while, a year or three, and it’s going to be a traders market, which means you must have a trading strategy, plan your trades, and trade your plan. It’s amazing how simple a few trading rules are written down on paper can save you thousands of dollars a year from locking in gains, or cutting losses. I have this mini trading strategy mastery course if you want to take control of your trades and override your emotional issues. It’s easy to hold winners until they turn into losers, taking to large of a position, or maybe you have masted the art of buying high and selling low repeatedly? Yikes! It happens to most traders, and it can easily be overcome with a logical game plan I cover in the crash course, pun intended 🙂

Someone yesterday I spoke with said that in the USA alone already had 10,000 people die just from common influenza, yet here we are freaking out over 17 dead in the USA. Sure, its bad news, but the common sicknesses for older citizens makes coronavirus seems a little blown out of proportion. There are conspiracy theories out there and this could be bioweapon which is scary and I am no expert in this field but my sources are not concerned with the Conornavirus. I want to think a cure gets found soon, and if so, the markets will rebound with a vengeance, and we can relax.

In short, if you have lost money with your trading account this year, holding some big losing trades that were big winners just a couple of weeks ago, I think it’s worth joining my trading newsletter so you can stay on top of the markets. I take the loud, emotional, and complex market and deliver simple common sense commentary and a couple of winning trades each month.

My trading is nothing extreme or crazy exciting because I’m not an adrenaline trading junky. I only want to grow my entire portfolio 2-4% a month with a couple of conservative ETF trades and make a 22%-48% return on my capital without the stress of being caught up in this type of market and feeling like I always need to be in a trade.

Happy Trading!

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com