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Current Equities Rally Similarities To 1999

Euphoria is a type of market rally where valuations, real market expectations, and global market concerns are pushed away from view while a trader based rush to rally takes place.  One of the clearest examples is the 1995 to 2000 DOT COM US stock market rally.  As the Internet burst into homes and businesses across the world, the US-led the way with dozens of new Internet-based IPOs touting glorious expectations, potential earnings and more.  Everyone had the idea this new medium would dramatically change the economy for the better and breakthrough traditional economic boundaries.

The rally that took place in 1995 through 2000 was incredible.  The S&P 500 rallied from 463 to 1535 – +235.57%.  What we find interesting is the “price wave formation” that took place within that rally.  There were a number of key price rotations that took place as the market continued to rally, we’ve labeled them A, B, and C.  The first rotation, A, took place in July~Dec 1997.  The second, B, took place from May 1998 to November 1998.  The last, C, took place between January 1999 and November 1999.  Technically, these rotations are significant because they represent “true price exploration” related to price advancement.  The price must always attempt to identify true support/resistance levels while trending.

When we compare the rally from 1995 to 2000 with the current rally in the US stock market, we can see a defined level of euphoric price advance after the 2016 US elections.  We must also pay attention to the previous price advance from the 2009 price lows as the global markets were struggling to recover from the Credit Crisis. Our research team identified the A, B, C rotations in the current price and associated them to the similar rotations in the 1995-2000 price rally as “key components of the current rally and a potential warning sign of a pending top formation”.

Our researchers believe the QE processes of the global central banks have set up a similar type of euphoric price rally in the current global markets even though current economic metrics are warning of weakening economic activity and weakening global market output.  The US Fed and global central banks seem to want to keep pumping money/credit into the global markets to keep the rally going – most likely because they are fearful of what a crash/correction may do to the future growth opportunities around the planet.

Yet, our research team focused on the C rotation in 1999 and 2019 – a full 20 years apart.  What interested our research team the most was the fact that the rotation in 1999 set up a full 21 months before the November 2000 US Presidential election.  The current C rotation initiated in January 2018 – a full 34 months before the November 2020 US Presidential Elections.  Anyone paying any attention will recognize the 21 and 34 are both Fibonacci Numbers – relating a 1.619 ratio advancement.

Are we setting up a massive top in the US stock market based on a Fibonacci price range expansion related to the patterns we have identified in this SP500 chart?  Have we advanced from the 2000 peak and 2009 bottom in some form of Fibonacci Ratio expansion that aligns with the C rotation pattern we have identified?

The rally from Bill Clinton’s second term start date to the peak in 2000 totaled 932.9 pts – +153.61%.  the rally from Donald Trump’s first term start date to our projected peak level totals 997.5 pts – +44.38%.  The rally in 2000 peaked at a range that is 200% larger than the ration between the two separate percentage point ranges.  Is this significant to traders?  Does it help to align our peak with the 1.619 Fibonacci ratio?

153.61 / 44.38 = 3.4612

3.4612 / 2 = 1.7306

Given the alignment of these values with a potential 200% range expansion theory, we need to start to look at TIME/PRICE ratios to determine if these rallies are aligned efficiently.

The rally from 1995 to the peak in 2000 consisted of 63 Months.  The rally from 2009 to our projected peak consists of 131 bars.  This represents a price TIME expansion of 207.9%

The rally from 1995 to the peak in 2000 consisted of a price move of +1081.2 pts (+235.57%).  The rally from 2009 to our projected peak consists of a price move of 2585.6 pts (390.49%).  The ratio between these two price expansions is 1.657.

The correction from the peak in 2000 to the low in 2009 consisted of 109 months.  The ratio between the 63 months (1995~2000 peak) to this correction time is 1.73.  The ration of the 2009~2019 rally time span is 1.20.  Thus, the correction between the peak in 2000 to the bottom in 2009 expanded at a rate of 1.73x the time it took to complete the DOT COM rally from 1995 to 2000.  The recovery that has taken place from the 2009 bottom to our projected top in 2019 would expand at a rate of 1.20x the correction time rate.  All of these levels align with common Fibonacci numbers and ratios.

In other words, we believe the current expansion in price is nearing a completed Elliot Wave/Fibonacci ratio peak (likely wave C) that maintains proper aspect ratios related to previous major price rotations.

Other major sectors and asset classes also look to be showing similar topping patterns like the real estate values and charts here.

CUSTOM VOLATILITY INDEX MONTHLY CHART

Our Custom Volatility Index shows extended volatility is increasing with price nearing the upper range for December 2019.  Notice the increase in the range of these bars since the just before the peak in January 2018.  This increased range suggests extreme price volatility has been pushing the markets for the past 24+ months.  If this volatility continues into early 2020 as our projected peak sets up, we may see some very big rotation in 2020.

2000 AND 2019 PRICE SIMILARITIES IN S&P 500

This 2000 peak to 2019 peak comparison chart highlights the similarities in the C price pattern that has setup.  In 1999, the C pattern set up with an initial peak, followed by minor downside rotation – just like in January 2018. The second peak was higher, followed by a much deeper downside price rotation – just like in Nov/Dec 2018.  And the final rally broke upward after a Pennant/Flag formation pushing higher by +25% in 2000.  The current upside breakout from the December 2018 lows suggests a 39.5% price peak – just above our predicted 32% scaled Fibonacci rally expectation.

FIBONACCI PRICE AMPLITUDE TOP LEVEL IS NOT MUCH HIGHER

The total scope of this price move over the past 40+ years is impressive.  These longer-term patterns still drive the markets to establish major peaks and valleys.  Take a look at this chart and try to understand the ratios that are being presented here.  21%, 34%, 50%, 62%, 100% and any combination of these levels using 2x, 3x or any multiplier constitute a Fibonacci structure.  One of the most important facets of attempting to understand the Fibonacci price theory is that the ratios must be somewhat aligned.

Pay attention to the Fibonacci Price Amplitude arcs (the circles) drawn on this chart.  They represent the price range from the peak in 2000 to the low in 2009.  The reason this range is important to our researchers is that it will properly measure the previous upward price rally and the current price rally in terms of price amplitude.  Pay attention to how the current price rally stalled and rotated near these arcs.  We believe the upper GREEN arc level will operate as major resistance for the markets – possibly setting up another “rollover” type of top similar to the one in 1999~2000.

Skilled technical traders still need to be cautious headed into 2020.  The current rally, and most of 2018 and 2019, have been setting up a very serious type of pre-top setup.  Any downside rotation in early 2020 may attempt to move lower in multiple waves – possibly spanning multiple years.

Currently, our research suggests a limited 2.5% upside price range before the SP500 will reach the GREEN resistance arc.  The US markets may reach this level before the end of 2019 and may begin a topping pattern before you finish reading this article.  Please stay informed and understand the structures, trends, and dynamics that are at play in these markets to attempt to reduce your risk.  Now is the time to trim your equity/stock positions and prepare for a much bigger swing in price/volatility.

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.

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

Gapping Rotation in SPY and News Based Rallies Are A Warning

As holiday trading sets up in the global markets, the SPY is starting to show signs of volatility and warning of a potential top by gapping as price attempts to trade sideways.  This type of top formation, along with the fact that the overnight REPO facility continues to roil the markets, continues to draw our researchers to the conclusion that some type of debt or liquidity issue is just below the surface of the global markets.

We believe the topping formation in the SPY may be a sign that the holiday trading, normally spanning from just before Thanksgiving to sometime after January 10th or 15th, may prompt a very volatile price rotation in the global markets.  The lack of liquidity in the market at this time often leads to fairly narrow ranges in price.  Yet we are seeing volatility continue to stay somewhat high at this time and the REPO issue hangs over the heads of nearly every investor at this time.

One of our friends, an ex-Chicago floor trader, wrote to us just a few days ago suggesting he was receiving phone calls from many friends and associates in the US and overseas about the REPO issue.  We believe this issue is now taking root as a concern for global investors and could become a major issue for the markets going forward into 2020.  Our friend’s suggestion was to “buy gold and to pair back equity positions”.

This SPY Daily chart highlights the GAPS in price that has our research team concerned. A breakdown below $308 would qualify as a new Bearish Price Trend.  If the most recent gap is filled to the downside, the price may begin to accelerate lower, confirming our analysis.

On the flip side of that scenario, is a breakout above $315 that can hold for a couple of days or into the end of the week. That would trigger a new uptrend and possibly a Santa Rally.

This Weekly YM chart highlights the Hangman pattern set up last week with a very long lower wick.  This pattern set up at the price high is very indicative of a topping formation.  The fact that it set up just below the GREEN Bullish Price Trigger level near $28,175 suggests this level is acting as resistance.  A breakdown in price near this level could prompt a move to levels below 26,000.

Traders need to stay cautious over the next 5+ weeks as the lack of volatility in the market may prompt some very big price moves.  We believe the REPO issue may have some legs in the future and we believe a rotation may begin before Christmas 2019.

If liquidity continues to diminish, a flash crash type of event would not be uncommon.  We believe there are serious risks of a downward price rotation in the works and urge our followers and members to prepare for unknown risks over the next 5+ weeks.

Normal trading volume will not likely start to pick back up till after January 15th.  We have at least 4+ weeks of unknowns to contend with in a very illiquid market. We are going to trade with the short term market trends and be agile going into the new year.

S&P 500 & BOND TREND – DECEMBER 13

The stock market was setting up a topping pattern the past couple weeks but that has now been negated. The charts/technicals are bullish and so are we it’s that simple really.

Yesterday more chatter of tariffs and other news sparked a strong equities rally at the open bell which sent stocks sharply higher while bonds corrected. With yesterday’s S&P 500 hitting new highs after a fear-based correction two weeks ago the market is now back in rally mode and should have enough energy to sustain a rally into the year-end.

While we trade based on technical analysis, there will be days when news hitting the market and causes some large moves on the same day we have technical buy or sell signals. Like yesterday, for example, The past couple of trading sessions we have been talking about how the S&P 500 has to hie new highs to kick things back into a new uptrend after the previous week’s price correction. Yesterday, the SP500 broke to new highs, while bonds broke down triggering a new breakout rally in stocks. Sure there was news to help push price higher but none the less all our analysis has confirmed for the buy trigger.

We touch on other markets or news from time to time but we do not take any of the news into consideration for our trades. While there are many warning signs out there pointing to dark times ahead for the financial markets like the Repo market and many others, the reality is we follow the price, not the news. The market is climbing a wall of worry among educated traders and investors, and that’s what the market does best and we can’t fight it. Eventually, the price will turn down for a mega bear market and we will be there to profit from it, until then we ride the fearful rally higher.

Chris Vermeulen
www.TheTechnicalTraders.com

New Predicted Trends For SPX, Gold, Oil Nat Gas

This week should be more volatile as we mentioned last week. In fact, equities are all over the place in pre-market up, and now down with strong volume. While money, in general, is still flowing into the risk-on (stocks) be the average investor keeping a steady upward grid higher for stocks, and decline in bonds and gold, our short term analysis indicates that should be coming to an end and potentially this week.

EXECUTIVE SUMMARY:
– SP500 showing strong selling volume in pre-market (bearish)
– Bonds and metals trading sharply lower by 1% and 0.50% giving mixed signals for the overall financial market trend
– Natural gas up 2-4% this morning showing big volatility as its likely to start a bottoming process this week.
– Crude oil is up 2.3% bouncing off support but our cycles are pointing to choppy prices this week.

Imagine having this video delivered to you every day before the opening bell, and then to have only the best ETF trade signals sent you when they unfold each month. Well, the good news is that you can for the same price as your morning coffee – SUBSCRIBE NOW AND EXERPEINCE SUCCESS!

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

Weekly SPX & Gold Price Cycle Report

Today I want to talk to you about the SP500 because it’s on the verge of making a very significant move. We could experience a 15% rally or a 15% decline and it could be just around the corner.

Let me recap on both the short-term top this month, and then a look at the bigger picture of what happened last October through December and if we are going to see that happen again. There is the possibility we get a massive rally if the market breaks to new highs. The market is loaded and ready for action. Whichever way it breaks will have a strong impact on precious metals and bonds. Make sure to opt-in to our free market trend signals newsletter.

21 DAYS THEN A BREAKDOWN?

Let’s look at the SP500 for the last 6 months in the chart below. If we were to just draw support trendlines across the lows and a resistance trend line across the highs, you can see we still have some room for the SP500 to work itself higher and still be within the pattern.

Do you see the blue line that is on the chart? You will notice it follows price very closely and you’ll notice the purple line on the hard-right edge as well. This purple line is the forecasted projected cycle price that we are anticipating for the SP500 over the next 45 days.

I should note that as the market evolves and moves this price cycle forecast will change, but it gives us a good idea of current cycles in the market and where the price should go next.

Overall, we’re all you’re looking for SP500 to struggle to move higher because it acts as resistance. If resistance holds then it is likely the market breaks down and tests the August or September Low.

S&P 500 OCTOBER – DECEMBER MARKET CRASH TO REPEAT?

Let’s step back and look at last year’s price action. You can see that the cycle analysis is pointing to potentially another market crash down to those December low. If that is the case then it could be the start of something very significant like a new bear market.

So that’s where we’re at in terms of the SP500 and at this point, we’ve got another 21 days or so before the SP500 should start breaking below our white trendline support level.

While cycle analysis helps us paint a clear picture of what to expect looking forward up to 45 days I still rely on my market trend charts to know when I should be buying or selling positions.

BONDS – THE NATURAL INVESTOR SAFE HAVEN

The first safe haven investors flock to when they become scared are bonds. By looking at the chart we can see they should start to find a bottom based on our cycles.  Bond prices are stuck within a large sideways channel and should hold their ground until the SP500 starts collapse. If the SP500 breaks down then we’re going to see bonds move higher and should eventually break out and make new highs.

GOLD – THE SAFEST OF SAFE HAVENS

The true safe Haven is gold when it comes to a global store of value for all countries and individuals.

Take a look at the price of gold, as you can see it rallied in June and again in August when the cycles bottomed and started an uptrend. Right now the price is in a much larger consolidation (bull flag pattern) which is a positive sign. In fact, this multi-month pause makes gold even more bullish in my opinion. The longer a commodity trades sideway the more powerful the next move will be.

You can see based on our cycles analysis and forecasted price gold still has some potential weakness for a couple of weeks.

Understanding cycles and how to trade with them is much harder than most people think. If you do not understand cycle skew then you will struggle to turn a profit. I have been trading with cycles since 2001 and still, I find them very deceiving at times.

In laymen terms, cycle skew is when a cycle moves against the direction of the underlying asset’s trend. The chart below shows this clearly with the white lines. In short, gold is in an uptrend, and when the cycle moves down against the assets trend price will in most cases trade sideways. Do not try to short cycle tops when the trend is up, no matter how tempting it may be.

The key is to wait for cycles to bottom, then get back into position for the next upward move in the cycle and price.

I had a fantastic chat with Adam Johnson from BullsEyeBrief today and if you are interested in more juicy details on the SP500, Gold, and how I trades be sure to listen to the most recent podcast we did together at the top of his website https://bullseyebrief.com/podcast/

THE TECHNICAL TRADERS THOUGHTS:

In short, the stock market continues to keep the bull market alive, but investors have started to move into gold as a safe haven. The fear of a market downturn is growing which is why gold has rallied and started a new bull market. The money flow into gold is very strong and is warning us that US equities could enter a bear market in the next few months and that possibly something much larger globally could be at play as well.

Gold continues to just hold up well even with the current cycle forecast trending lower. Overall, we’re looking at about 20 days or so and we could see metals and equity prices make some incredible moves.

Keep reading our research because our proprietary tools have been nailing all of these price targets and move many months in advance.  The next bottom in metals should set up when our cycle bottoms – then the next upside leg will begin.  This time Gold should target $1800 and Silver should target $21 to $24.  This will be an incredible move higher if it plays out as we suspect.

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

Dow Jones May Have Already Bottomed But SP500 & Nasdaq Have Further To Go

Have you been following our research?  Were you prepared for this move like we were?  Did you profit from this incredibly quick and volatile downside price move in the US markets?  What is it going to do to the foreign markets and what next?

Our team of researchers has been all over this setup many months before it happened.  In fact, we issued a research article on September 30 suggesting our predictive modeling system was warning of a big price rotation in the NQ and ES.  On September 21, we authored another research article suggesting a “massive price reversion may be days or weeks away”.  On September 7th, we authored yet another article suggesting “US STOCK MARKET HASN’T CLEARED THE STORM YET”

In case you missed our research, read and follow our work below.  While others may have completely missed this week’s breakdown move, we called it more than 30+ days ago and provided very clear and concise information for all of our followers to know what was about to breakdown in the markets.  Our morning coffee video analysis recap is the one thing… that single investment that’s going to turn into the greatest investment you’ve every made for your trading and investments.

If you find that you get analysis paralysis from reading too many articles from various news and trading sites feel free to do your self a favor just skip reading 5- 10 articles a day and being confused about what to do next get our Daily 8 Minute Technical Analysis of all the major markets and commodities. Forget the news and follow the markets with our proven technical analysis methods.

September 30, 2019: PREDICTIVE MODELING SUGGESTS BROAD MARKET ROTATION IN THE NQ & ES.

September 25, 2019: DEMOCRATS LAUNCH FORMAL IMPEACHMENT – WHAT SHOULD TRADERS EXPECT?

September 24, 2019: IS SILVER ABOUT TO BECOME THE SUPER-HERO OF PRECIOUS METALS?

September 23, 2019: IS THE TECHNOLOGY SECTOR ABOUT TO BREAK LOWER?

September 21, 2019: MASSIVE PRICE REVERSION MAY BE DAYS OR WEEKS AWAY

September 17, 2019: VIX TO BEGIN A NEW UPTREND AND WHAT IT MEANS

September 7, 2019: US STOCK MARKET HASN’T CLEARED THE STORM YET

August 30, 2019: TRANSPORTATION INDEX POINTS TO STOCK MARKETS WEAKNESS

August 13, 2019: GLOBAL CENTRAL BANKS MOVE TO KEEP THE PARTY ROLLING – PART III

DOW JONES DAILY PRICE CHART

Now for the really good stuff, the YM may have already reached its lowest point and may begin to form a bottom near the 26000 levels.  This is the predicted downside price target level from our ADL predictive modeling system and it only took two big down-days to reach this level.  We really need to pay attention to how the markets react at this point and the YM will be key to understanding if the rest of the ADL predictions about the ES and NQ are likely to play out as we suggested.

DAILY SP500 INDEX

This ES chart highlights the downside price move to the 2880 level, our projected price target, and initial support level.  At this point, the ES has fallen, just like the YM, to levels that may prompt some price support.  We do believe the ES will fall further, possibly targeting the 2800 price level, before finding any real support.

Read the research articles listed in today’s research post.  We’ve been well ahead of this move the entire time and we called this move perfectly using our predictive modeling systems, Fibonacci price modeling systems, and other tools.  Our researchers have the ability to see into the future sometimes without predictive modeling tools.

In fact, we already have an idea of what will happen over the next 3 to 5+ years, but the price is our ultimate tool of choice.  We allow price to dictate what it wants to do, then use our predictive modeling tools to align price movement with our technical and predictive analysis – that is our secret, and you can’t get it anywhere else on the planet.

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.

Be sure to ride my coattails as I navigate these financial markets 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 and SPECIAL OFFER TODAY ONLY – CLICK HERE

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these supercycles are going to last years. This quick and simple to understand guide on trading with technical analysis will allow you to follow the markets closely and trade with it. Never be caught on the wrong side of the market again and suffer big losses. PDF guide: Technical Trading Mastery

Chris Vermeulen
www.TheTechnicalTraders.com

S&P 500 and GDXJ Trend Signals Posted Today

I have just posted our most current trend charts for the stock market and gold miners. As you know money generally rotates between risk-on (stock market) to risk-off (metals, bonds) so it’s important to know when you should shift your money from one asset class to the next.   These trends and swing trade charts which will update daily on our website are second to none (in my opinion), and they are only getting better with time.

GDXJ GOLD MINERS TEND & SIGNALS – SEPT 30

2019 has been a good year for those buying and holding GDXJ which is up 19% year to date, but with these signals for ur entry and exit points in the precious metals sector we are up over 42% alone just for the precious metals plays alone this year.

S&P 500 INDEX TREND & TRADE SIGNALS – SEPT 30

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Chris Vermeulen – Technical Traders Ltd

Predictive Modeling Suggests Broad Market Rotation In The NQ And ES

We wanted to share some information that suggests the NQ (NASDAQ) and ES (S&P 500) may engage in some relatively broad market rotation over the next few weeks. Also, to share that the YM (Dow Industrials) may stay relatively flat throughout this span of time.  Our Adaptive Dynamic Learning (ADL) predictive modeling system is showing somewhere between 8% to 18% or more in price movement.

The fact that our ADL predictive modeling system is suggesting the ES and NQ may rotate lower over the next few weeks and that the YM may not share the same levels of price volatility suggests that the Dow Industrials (35 stocks) may be viewed as a more solid economic base than the tech-heavy NASDAQ (100 symbols) and the various symbols within the S&P 500 (500 symbols).

It is suggesting that volatility may come from high multiple stocks or stocks that may reflect greater future economic weakness over the next 60+ days.  Almost as if a transition is taking place in the markets where investors are shifting capital away from risk and into value and dividend stocks.

WEEKLY S&P 500 (ES) CHART

This Weekly S&P 500 (ES) chart highlights the ADL predictive modeling results showing the ES should attempt higher price rotation this week, the week ending the month of September, then move dramatically lower over the next 5+ weeks.  Eventually, the support level above 2775 should hold as a lower price channel throughout this rotation.  By the end of October, it appears the price level of the ES will setup a base near or below 2900, then begin another rally above 3050.

WEEKLY NASDAQ (NQ) ADL CHART

This Weekly NQ ADL chart highlights the broader price rotation we expect to see in the NASDAQ.  The ADL predictive modeling system is suggesting the NQ will breakdown to levels below 7000 over the next 4+ weeks, potentially finding a bottom somewhere near 6500 sometime in early November.  This breakdown in price would suggest the high multiple technology stocks may fall our of favor with investors as earnings and operations expectations are revalued.  One thing to pay close attention to is that the ES chart appears to recover in November where the NQ chart recovery process is shown to be much lower in price level.  This suggests the NQ may contract by as much as 12% to 18%, or more, throughout this rotation and that the ES may begin a recovery before the NQ attempts to find a bottom.

DOW JONES (YM) WEEKLY ADL CHART

This YM Weekly ADL chart shows that the Dow Jones Industrial sector should stay relatively immune from the type of rotation the ADL is predicting for the ES and NQ charts. The ADL system is predicting that the YM price will attempt a moderate price rally over the next 8+ days, then move lower to near the 26,000 level.  At that point, price will rotate near the 26,000 level for about 4 to 5 weeks before attempting to really back above 27,500 again.  This rotation constitutes only a 4% to 5% price rotation where the ES and NQ price rotations appear to be 2x to 4x that amount.

CONCLUDING THOUGHTS:

When taken in total context, these ADL predictions suggest the ES and NQ will come under some extreme pricing pressures over the next 20 to 30+ days and that the NQ is the most likely to see a much deeper price correction throughout this span of time.

The ES will likely move lower throughout this expected price correction, but not as much as the NQ may fall.  The YM will likely rotate a bit lower as well, possibly below 26,000 for a brief period of time.  Yet the YM appears to be the most stable in terms of price volatility over the next 60 days and throughout this expected price rotation.

We believe this volatility is related to the Pennant/Flag formation that continues to setup within the broader markets.  This Apex event will initiate this price rotation if price starts reverse lower below support. The shift of capital away from technology/risk is a natural price rotation as the markets setup for another attempt at new highs.  The NQ may not recover to near highs before the end of 2019 based on our ADL price modeling system.  It may be that the run in technology is shifting into the hunt for value, dividends, and safety.

Find out what bull and bear funds to own as we enter the final quarter of the year. This is your chance to make back what you have lost or to close out the year with oversized returns. Visit my ETF trade alert newsletter at http://www.TheTechnicalTraders.com

Chris Vermeulen

Massive Price Reversion May Be Days or Weeks Away

Our researcher team believes a massive global market price reversion/correction may be setting up and may only be a few days or weeks away from initiating.  Our team of dedicated researchers and market analysts have been studying the markets, precious metals, and most recently the topping formation in the ES (S&P 500 Index).  We believe the current price pattern formation is leading into a price correction/reversion event that could push the US major indexed lower by at least 12 to 15%.

Historically, these types of price reversion events are typically considered “price exploration”.  Over time, investors push a pricing/valuation bias into the markets because of expectations and perceptions related to future market valuations and outcomes.  What happens when these current valuation levels and future expectations shift perspective from optimistic to potentially overvalued is that a price reversion event takes place.  This happens when investors shift focus, determine value exists at a different price level and abandon previous valuation expectations.

The rotation in price is actually a very healthy process that must take place from time to time.  The structure of price waves (for example Elliot Wave, Fibonacci, Japanese Candlestick, Gann and other price theories) are based on this process of price rising to overbought levels, then retracing to oversold levels – again and again as price trends higher or lower.  This is the process of “price exploration” – just as we are describing.  In order for price to trend higher or lower over time, price must move in the wave like pattern to identify true value (retracement/reversion) and extended value (a rally or selloff) in a type of wave formation.

Here are examples of the typical price wave formations within an extended or intermediate-term price trend, but before you continue quickly opt-in to our Free Market Trend Newsletter.

These price formations/structure are inherent in all price activity/movement in every financial instrument traded throughout the world.  They are the underlying structural foundation of all price activity and the basis of Elliot Wave, Fibonacci, Japanese Candlestick and many other price theories.

WEEKLY CUSTOM VOLATILITY INDEX

Our Custom Volatility index is highlighting a very interesting pattern/setup currently that suggests a moderate price reversion may take place over the next few days/weeks.  We’ve highlighted these patterns on the chart below illustrating how our Custom Volatility index helps to identify these types of patterns.  They form after a moderately deep price decline, the first downside (RED) line shown in these examples, and are followed by a moderate price recovery.  Then, a deeper price decline sets up only 3 to 5 weeks after the initial price bottom resulting in what can sometimes be a very broad market decline.

For example, the decline in February 2018 resulted in a very moderate second price decline compared to the initial selloff.  The October 2018 price decline resulted in a similar pattern on our Custom Volatility index, but the second price decline was much deeper and more violent than the example in February 2018.  This is the type of price correction that we are expecting to see happen within the next 2 to 4 weeks.

The current price rotation on our Custom Volatility index mirrors the previous rotations almost perfectly and the new breakdown event should only be 3 to 10+ days away from starting.  The big question is “will this be a moderate price reversion event or a more violent price reversion event like we saw in November/December 2018?”

WEEKLY CUSTOM SMART CASH INDEX

Our Custom Smart Cash Index is suggesting weakness is dominating the global markets right now.  We would expect to see our Smart Cash index rise as investor expectations rally and as global stock markets rally.  Yet, this index has been steadily moving lower as weakness dominates investor sentiment.  We believe we may begin a new price reversion event (a price breakdown) on some news event or economic that could push the global stock market dramatically lower – possibly my 12%+ or more.  Our earlier, August 19th breakdown predictions, suggested a downside breakdown could result in a 16% to 24% market correction – these levels are still very valid.

WEEKLY DOW JONES INDEX

The Dow Jones Index is setting up a DUAL-FLAG (pennant) formation that has kept our researchers entranced over the past few months.  This very broad market patter strongly suggests a very violent and explosive price move is just days or weeks away.  We’ve highlighted the “Flag Apex Range” on this chart to show you where and when we expect this explosive move to begin.  Investors need to be very aware that these flag/pennant formations are extremely close to reaching the breakout/breakdown APEX and all of our other research tools are suggesting a move lower is the highest probability outcome given the current markets setup.

CONCLUDING THOUGHTS:

As we’ve stated earlier, the global markets are very much “waiting on news events”.  It appears fundamentals and earnings are driving only 30~40% of the market movement recently.  NEWS is driving 60% to 70% of the global markets price rotation.  Geopolitical news, commodity supply news, war or any other aggression news is also very important in today’s world.  Pay attention to the news items that hit the markets as the global central banks attempt to navigate the undulating global market environment.

Our advice for skilled technical traders would be to protect everything from risks and prepare for some very extreme volatility over the next 3 to 15+ days.  We believe the APEX even is about to happen and it could become a massive price reversion event.

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 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!

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these supercycles are going to last years. This quick and simple to understand guide on trading with technical analysis will allow you to follow the markets closely and trade with it. Never be caught on the wrong sie of the market again and suffer big losses. PDF guide: Technical Trading Mastery

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

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.

Is A Price Revaluation Event About To Happen?

Skilled technical traders must be aware that price is setting up for a breakout or breakdown event with recent Doji, Hammer and other narrow range price bars.  These types of Japanese Candlestick patterns are warnings that price is coiling into a tight range and the more we see them in a series, the more likely price is building up some type of explosive price breakout/breakdown move in the near future.  The ES (S&P 500 E-mini futures) chart is a perfect example of these types of price bars on the Daily chart (see below).

Tri-Star Tops, Three River Evening Star patterns, Hammers/Hangmen and Dojis are all very common near extreme price peaks and troughs.  The reason they form is that price is unable to rally or fall far enough within a normal trading day to project broader range types of Japanese Candlestick patterns and these rotational/top/bottom types of Japanese candlestick patterns are often found at or near key reversal points in price.  When they form in a series, like we are seeing currently, it is a very ominous warning that price will react in an explosive movement – either UP or DOWN. Be sure to opt-in to our Free Trade Ideas Newsletter.

Here are some examples of how these types of Japanese Candlesticks may appear in a chart.

Hammer type of patterns are similar to Doji pattern because the difference between the open/close price is very narrow.  Yet, instead of the Open/Close range forming near the middle of the price bar, Hammers form when this range forms near the high or low of the price bar.  They fall into the “umbrella” group of patterns and warrant a bit of extra consideration depending on where they form in price.  The can often create very clear warning signals just prior to a major price reversal.

SP500 (ES) DAILY CHART

This ES Daily chart highlights the sideways DOJI/HAMMER price channel that is setting up over the past 5+ trading days.  We believe this sideways, narrow price range, is going to prompt a massive price breakout or breakdown in the near future.  Historically, this current price level is strong resistance, thus, until we see any price move above 3035 on the ES, we must assume this resistance will continue to hold and a breakdown event may be the likely outcome.  The only way we can determine if price is capable of attempting to move higher is to wait for price to actually make a new high price above previous resistance.

MID CAP INDEX DAILY CHART

This MC, MidCap, Daily chart highlights the same period of time, but notice the range of the price bars on this MC chart are broader in range and scope.  We are not seeing Dojis bars like we are seeing on the ES chart.  This suggests that the real price action is taking place in the MidCap market, the Transportation Index and other trading instruments.  We would likely need to watch how the rest of the market is reacting to this sideways trading while attempting to understand that the S&P is setting up for a big breakout or breakdown event.

MID CAP INDEX WEEKLY CHART

This MC Weekly chart hSP500 (ES) Daily Chartelps us to understand the past 2+ years price rotation and why the current price levels, near 2000, are so important.  In January 2018, price collapsed from these levels.  In October 2018, price again collapsed from these levels – into a massive -24.85% downside move.  Currently, we’ve seen price test the 1995 level multiple times and fail.  Will it fail again and what is the potential for a broader downside price move?

As we stated earlier, until price is able to clear the 2000 price level, we must assume that resistance near 2000 will continue to hold and that price is more likely to move lower than higher at this time.  The only way we can determine if price is going to attempt to rally is to wait for it to attempt to reach a new high price from within recent price rotation.

Headed into this weekend, we would strongly suggest that all skilled technical traders plan for and prepare for some type of external new events, crisis events or anything that could drive price higher or lower.  It seems news is one of the biggest driving factors in the global markets recently.  Traders/investors are waiting for an impetus to drive trends.  The US Fed dropping rates really didn’t do much to improve investor sentiment.  It appears global traders want something BIGGER and BROADER to push prices higher at this time.  Improved global trade and economic ties would do it – but we don’t think that is going to happen within the next 3+ months.

Get ready for a wild ride and be sure to subscribe to my ETF trading newsletter so you don’t miss these opportunities www.TheTechnicalTraders.com

Chris Vermeulen
Technical Traders Ltd.

US Indexes Continue To Rally Within A Defined Range

This week ended with the S&P, Dow Industrials and Nasdaq stalling near recent highs.  From a technical perspective, both Thursday and Friday setup small range price bars (Doji candles or small Spinning Top type bars) after the upside price move on Wednesday.  These are indicative of price consolidation and indecision.

The news events that initiated this rally, nearly a week ago, continue to drive sentiment in the markets.  Yet the news from the ECB that new stimulus efforts would begin with $20 Billion Euros monthly invested in assets until they decide it is not required any longer suggests the EU is desperate to support extended growth and some renewed inflation.  This move by the EU pushed banks and the finance sector higher while the US stock market stalled near the end of the week.

At these lofty levels, almost all of our indicators and predictive modeling systems are suggesting the US stock markets are well within an overbought mode.  Of course, the markets can continue in this mode for extended periods of time as central banks and external efforts to support the asset/stock market continues, at some point investors/traders will recognize the imbalance in price/demand/supply as a fear of a price contraction.

We are very cautious that the market is setting up a lofty peak at this time.  It is important for traders and investors to understand the global situations that are setting up in the markets.  With precious metals moving higher, it is important to understand that FEAR and GREED are very active in the markets right now.  The continued capital shift that has been taking place where foreign investors are shifting assets into US and more mature economies trying to avoid risks and currency risks is still very active.  Yet the lofty prices in certain segments of the US stock markets means that this capital shift may take place where investment capital is shifted away from more risky US assets (high multiple speculative stocks) and into something that may appear to be undervalued and capable of growth.

The shifting focus of the global markets, the EU and the continued need for stimulus at this time is somewhat concerning.  Our view is to watch how the global markets play out and to maintain a cautious investment strategy.  We shifted into an extremely cautious mode back in February/March as the US market completed the October/December 2018 breakdown and precious metals started a move higher.  We continue to operate within this extremely cautious investment mode because we believe the foundation of the global markets are currently shifting and we don’t believe the stability of the markets is the same as it was after the February 2017 market collapse.

What do we believe is the result of this shift in our thinking?  This is very simple.  We are entering into the final 13+ months of the US presidential election cycle, the trade wars between the US and China continue to drag on with is muting economic activity, the EU continues to battle to find some growth/inflation while Great Britain attempts to work out a BREXIT deal as soon as possible.  Meanwhile, we continue to try to find opportunities in the markets with these extreme issues still pending.  We don’t believe any real clarity will happen until we near October/November 2020. Be sure to opt-in to our Free Trade Ideas Newsletter to get more updates.

This ES Weekly chart highlights the range-bound price rotation that currently dominates the US stock market.  Overall, the US stock market and the economy are much stronger than any other economy on the planet.  The risk factor is related to the fact that the capital shift which has been pushing asset prices higher as more and more capital flows in the US stock market may have reached a point of correction (headed into the US presidential election cycle).  As long as price stays within this range, we believe continued extreme volatility will continue.  Our Fibonacci system suggests price must close above 3178 to qualify as a new bullish trend and/or close below 2577 to confirm a new bearish trend.

This Transportation Index weekly chart shows a similar setup.  Although the Fibonacci price trigger levels are vastly different.  Price would have to climb above 11,475 to qualify for as a new bullish trend whereas it would only have to fall below 10,371 to qualify as a new bearish trend.  Given the past rotation levels, it is much more probable that price may rotate into a bearish trend before attempting to reach anywhere near the bullish price trigger level.

Our Custom volatility index suggests price has rallied last week well into the upper “weakness zone”.  This move suggests the upside price move may already be well into the overbought levels (again) and may begin to stall.  Traders need to be cautious near these level.  We continue to suggest that skilled technical traders should look to pull some profits from these lofty levels to protect cash/profits.  Any extreme volatility and/or a bigger price rotation could be disastrous for unprepared traders.

We are excited to see what happens early next week.  News will be a big factor – as it always is in this world.  Pay attention to how the markets open early this week and keep your eyes open for any crisis events (wars, bombings or other geopolitical news).  And get ready for some really big volatility to hit the global markets.

This is the time for skilled technical traders to really shine as these bigger moves roll on.

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.

So, if you believe in technical analysis, then this is the newsletter and market condition for you to really shine, especially with my trading indicators coming online.

Be prepared for these price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our  Wealth Building & Global Financial Reset Newsletter.

Join me with a 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis.

I can tell you that huge moves are about to start unfolding not only in currencies, metals, or stocks but globally and some of these supercycles are going to last years. A gentleman by the name of Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. 2020 Cycles – The Greatest Opportunity Of Your Lifetime 

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Chris Vermeulen – www.TheTechnicalTraders.com