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Weakness Appears To Be Setting For This Week’s Economic Data

As the world reacts to the global economic slowdown because of the COVID-19 virus event and the massive stimulus programs and central bank efforts to support the global economy, investors still expect weakness in the US and foreign markets.  We believe this expected weakness will not subside until news of a proper resolution to this virus event is rooted in the minds of investors and global markets.

Hong Kong and China are currently concerned about experiencing a “third wave” of the COVID-19 virus within their society.  As the economies open back up to somewhat normal, people are very concerned that a renewed wave of new infections will suddenly appear and potentially result in another shut-down event or infectious cycle?  We believe all nations are watching what is happening in Hong Kong and China as they attempt to reopen their economies.

The rest of the world is still battling the rising infection rates and dealing with the economic shutdowns that have brought the global economy to its knees.  Europe, Japan, Canada, and the US are all experiencing vast disruptions to their economies and commodity prices and demand expectations are collapsing as a result.

Nearly a week ago, we issued a research article that suggested our proprietary Fibonacci Price Modeling tool’s key resistance levels may become a very valid ceiling for any price recovery.  It appears this is happening in the markets as the NQ Daily chart, below, shows.

Before you 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!

DAILY NASDAQ (NQ) CHART

The NQ resistance level, near 7880, has acted as a soft ceiling in the NQ over the past 4+ trading days.  Today, the NQ briefly rallied above this level, then rotated downward below this level again to confirm this key resistance level.  We believe this critical Fibonacci resistance level may continue to act as a price ceiling over the next few trading days and push prices lower as economic news and expectations hit the news this week and next.

The next downside price target for the NQ is 6565 – new price lows.

If you have not seen this important technical analysis on the Nasdaq which I posted a couple of days ago, be sure to see these charts.

SP500 (ES) WEEKLY CHART

This ES Weekly chart illustrates another key resistance level near 2679.  Although the ES price has not rallied up to reach this critical Fibonacci resistance level, we still believe this level is acting as a price ceiling and that the ES will weaken as future expectations are confirmed by earnings data, economic data and other collateral damage to the global economy.

We are still very early in understanding the total scope of this virus event.  The US and other global central banks are attempting to front-run any weakened expectations as a result of this virus event.  We continue to believe the extended collateral damage to the consumer, business and other aspects of the economy are yet to come.  Most recently, consumer delinquencies have begun to skyrocket and the news is being printed about landlords and renters being unable to satisfy obligations on April 1st.

This is part of the reason why we believe further caution is warranted at this time in the markets. We issued an Important Trade and Investment Alert Yesterday.

Our research team believes a deeper price low will likely set up over the next 30+ days to establish a true price bottom.  As we’ve warned, we believe extended collateral damage to the US and global economy will soon become better understood and the extended shutdown of the US and other economies only manages to complicate any positive expectations for a bottom.

We believe a deeper price low will set up within the next 30+ days and we urge skilled traders to pay attention to the broader expectations of the markets.  Earnings data and other economic data will continue to stream into the news centers over the next 30+ days.  Don’t get too aggressive with trying to buy a bottom in the markets just yet.  Be patient and wait for the markets to show you when the bottom has really setup.

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 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. If you are a long-term investor looking for signals when to own equities, bonds, or cash, be sure to look into my Long-Term Investing Signals.

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 Strategist
Founder of Technical Traders Ltd.

The Selloff Structure Explained – Fibonacci On Deck

Many traders become very emotional when the markets turn Bearish and fail to properly understand that price structure is still driving market price movement.  This morning, I highlighted this structure to my subscribers attempting to alert them to the possibility that the markets could recover moderately over the next 3 to 5+ days attempting to set up the next “waterfall” downside price event.

On January 29, 2020, I posted a research article detailing my belief that a “waterfall” type of event was setting up in the markets.  This article was nearly 30 days prior to the peak in the markets.  It explained how events take place and how markets tend to develop a moderate recovery phase between selloff price declines.

January 29, 2020: ARE WE SETTING UP FOR A WATERFALL SELLOFF?

Skilled traders should notice the size and levels of each selloff event in the chart (above) and pay very close attention to how price initially collapsed from the peak, then recovered nearly 50% in early and late November before finally setting up a deeper waterfall price collapse in early December.

Our research team believes the US stock markets may attempt something similar over the next 3 to 5+ days as the Covid-19 economic outcome continues to process through the global markets.

The US and other Central Banks have taken broad steps to attempt to overcome the negative economic outcomes related to the Covid-19 global shutdown.  Their biggest concern is that consumer activity could diminish and banking/credit firms could come under severe pressures because of a consumer collapse.

There are over 35 million US low-wage jobs that may become at-risk because of the Covid-19 virus event.  We believe the true economic contagion of the global virus event may now be known until well into April or May 2020.  Yet we believe these at-risk, low-wage jobs are prevalent throughout the globe and foreign nations, such as Asia and Europe, may experience a similar consumer economic contagion over the next 6+ months.

Before you 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!

We believe the data related to the Covid-19 economic crisis will not fully be known until well into April or May 2020.  Because of this, we believe the US stock markets may recover to levels near the 50% Fibonacci Retracement levels on these charts before attempting a series of further downside price moves.  Skilled traders should not become overly emotional right now and pay attention to the structure of the price action as well as other technical conditions in play at the moment.  Our objective is to execute trades with a highly targets success rate – not to trade on emotions.

SPY DAILY CHART

This SPY Daily chart shows the SPY would only need to rally 18.70 points to reach the 50% Fibonacci retracement level on this chart.  This could happen very quickly given how close the price actually is to this key Fibonacci level.  If that were to happen over the next 3 to 5+ trading days, the downward sloping price channels from our TTCharger modeling system would move lower to meet price near 278 – which would set up a new resistance zone and possibly a new wave of selling.

INDU DAILY CHART

This INDU Daily chart shows the Dow Jones would have to rally about 2025 points (to levels near 23,886) to reach the 50% Fibonacci Retracement target.  If this were to happen, the sloping price channels on this chart would likely move lower to meet price near this 50% target level – presenting a very clear resistance zone for a new wave of selling to begin.

Remember, it is not about emotions or attempting to try to force the markets to adopt your “belief”.  Skilled traders attempt to identify risks, opportunities and realistic technical setups that allow them to objectively determine where and when the markets are providing a real opportunity for success.

We may be just a few days away from the next major wave of selling, yet any trader who jumped into an emotional trader over the past 5+ days expecting the markets to continue to break down is likely under a fair amount of stress right now.  Learn to read the charts and the structure of price more effectively and you’ll find the answers are already on the charts in front of you.

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 short-term swing traders.

If you are a more active trader and swing trader visit my Active ETF Trading Newsletter. If you are a long-term investor looking for signals when to own equities, bonds, or cash, be sure to look into my Long-Term Investing Signals.

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 Strategist
Founder of Technical Traders Ltd.

Important Trade and Investment Alert Was Issued

We just issued this trade alert to members of The Technical Investor newsletter which allows members to protect their wealth and assets while continuing to take advantage of opportunities generated by the US and global markets.  This is the first trade alert issued in 2020 of this kind.

If you are an active investor or traders, have a retirement account of any type or have assets in the stock market, then we urge you to take action and sign up to get this investment trade signal.

Our focus is to help traders and investors protect and grow their wealth. We use proprietary price modeling tools that can’t be found anywhere else.  Our combined 55+ years investing and active trading experience provides you with incredible insight and opportunity.

Passive investing is something for the “other guys”.  If you want to grow your wealth, protect your assets and learn to take advantage of the biggest price swings in the markets, then you need to follow our research and price modeling systems with us.

If you are concerned this may to be active for you, just know that we only buy the SP500 ETFs or move your money to cash where it is the most effective at times. If you can call your broker and tell them what to do with our alert instruction, or if you can place the trades yourself, then you can follow these investing signals.

Each year we have 2-3 trade opportunities to add new capital to the market, and some years we may have a new bull or bear market signal. Remember, bull market trades will last 5-12 years, bear market trades will last 1-3 years. No matter what, we can make money during both markets.

Since 2007, Passive Investing would have returned only 53.75% ROI – only 4.48% annually.  Active investing using our proprietary price modeling systems and deploying our proprietary position allocation modeling tools returned over 135% ROI – a 11.49% annually over the same time period.  That’s a whopping 230% more annual return than simply letting your investments ride out the market fluctuations.

Allow us to take a minute to explain just how powerful this advantage really is to you.

Imagine you started with a $100,000 account and compared the difference between a passive investment style and TheTechnicalInvestor.com trading style over a span of 10 to 15 years.  Most investors contribute to their retirement accounts over a 25+ year span of time – possibly longer.  The difference between the two styles of investing is dramatically different in terms of the final results:

At the 5 year mark, the difference between the two styles is almost $48,000 in extra profits (over +38% more growth for your assets).

At the 10 year mark, the difference between the two styles is almost $140,000 in extra profits (over +91% more growth for your assets).

At the 15 year mark, the difference between the two styles is almost $318,000 in extra profits (over +164% more growth for your assets).

After the 15 year example (assuming your passive investment style maintained a 4.48% annual ROI and our active investment style maintained a 11.49% annual ROI), the results are stunning.

With passive investing, you would have nearly DOUBLED your assets and wealth.

With TheTechnicalInvestor.com active investing, you would have more than TRIPLED your assets and wealth.

When you add our proprietary “re-entry” triggering system, the numbers explode to +40% annual ROI with 1x leverage; 3512% with 2x leverage; 9417% with 3x leverage.

The difference is that we help you navigate the bigger price swings/trends in the market and actively help you manage your allocation in the markets using our proprietary price and position sizing technology.

What’s the cost for TheTechnicalInvestor.com? $249 per year or $149 every 6 months.  Annually that breaks down to about $21 a month, which is $1 per trading day to know you are on the right side of the market.

Isn’t it time you took advantage of proprietary technology and services and started to create even more opportunities to grow your assets?  The market volatility recently has created an incredible opportunity for everyone that has a retirement/401k account.  Now is the time to focus on these big price swings because this is when opportunities are created to grow your wealth 3 to 5 times faster.

Visit www.TheTechnicalInvestor.com to learn more.  Sign up today to learn what our newest trade alert action is all about and how you can start profiting from these huge price swings in the future.  $21 a month is nothing when you really think about it.  Join our other subscribers in learning to protect and grow your wealth with our technology today.

Chris Vermeulen
Chief Market Strategiest
Found of Technical Traders Ltd.

Is Silver & Gold Mirroring 1999 to 2011 Again?

Our research team continues to dig into underlying patterns and set up in the global markets to assist skilled technical traders in understanding the current Covid-19 virus event and other key technical data.  Recently, we’ve authored a number of detailed research articles that we believe helped prepare traders for the events of the past 30 to 90+ days.  If you missed them, please take a moment to review some of our critical market research posts:

February 24, 2020: HAS THE EQUITIES WATERFALL EVENT STARTED OR A BUYING OPPORTUNITY?

January 31, 2020: A COMBINATION TOPPING PATTERN IS SETTING UP

December 20, 2019: WHO SAID TRADERS AND INVESTOR ARE EMOTIONAL RIGHT NOW?

Today, we are writing about a pattern our research team is seeing in the Gold/Silver ratio which is correlated to the price movement of Gold.  What does this mean and how can we profit from this setup?  Let’s get started trying to explain this chart pattern/setup.

GOLD:SILVER RATIO CHART FROM A NEW ANGLE

This first chart highlights the pattern we have identified and how we believe a similar pattern is setting up again in the current market.  The setup of the pattern is explained in the text below, but quickly scroll down and look at the first chart and the pink shaded areas “A” to get an idea of what we are talking about.

PRIOR TO “A” PATTERN SETUP

_ After a moderate price decline in Gold (1996 through 2001), a bottom sets up as the price of Gold begins to base near support.

_  The Gold/Silver ratio (BLUE), falls throughout this pattern setup as both Gold and Silver prices decline somewhat in unison.

THE SETUP “A”

_  Gold prices begin to rally moderately while pushing the Gold/Silver ratio higher over an extended period of time (from 1999 to 2003: about 4 years).

_ The Gold/Silver ratio peaks and begins to decline in mid-2003 as the price of Gold continues to rally at a bit more accelerated rate.

_ Gold prices begin a parabolic upside price advance in early 2006 after the Gold/Silver ratio collapses about 18% to 20% from the peak level near 82.50.

We believe a similar type of pattern is setting up right now in the metals market and we believe both Gold and Silver will engage in a price advance over the next 10+ months that may be similar to the post-A set up in mid-2003.  If you are familiar with what happened in the metals market at that time, Silver began to advance at a faster rate than the price of Gold advanced.  This is what caused the Gold/Silver ratio to begin to collapse.

Before you 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!

SILVER MONTHLY CHART FROM 1993 TO 2004

This Silver chart from 1993 to 2004 clearly shows how the price of Silver was reacting throughout the setup prior to “A” and after “A” in the chart (above).  Silver began a moderate price advance in 1993 from a level near $3.50 and advanced to a level near $7.50 in 1998.  Then, it began a downside price move to reach new lows in 2002.  At that point, the markets changed.  Gold and Silver began to advance almost in unison with Gold still advancing slightly more than Silver until early/mid-2003.  Once Silver broke dramatically higher, in late 2003-04, the Gold/Silver ratio started breaking downward instead of upward.  This is the pattern we are seeing in the metals market right now.

We believe the recent rotation in the metals market and the dramatic price divergence between Gold and Silver are setting up another similar type of pattern that could prompt both Silver and Gold to rally upward from current levels by at least 200%.

CURRENT SILVER MONTHLY CHART

The extremely deep price retracement on this Monthly Silver chart (below) highlights what we believe is a deep washout low price rotation that is setting up the “disconnect” as we have tried to explain in the Gold/Silver ratio chart and historical Silver chart (above).  Yes, Gold also moved dramatically lower over the past 2+ weeks illustrating the shock to the markets that took place as the Covid-19 virus event disrupted the US and global markets.  But our researchers believe this dramatic washout low in Silver is setting up a much bigger pattern, longer-term than most people understand.

Recently, news that global precious metals suppliers have received a tremendous surge of orders for the physical stock over the past 2+ weeks (source: https://www.msn.com).  In fact, many global suppliers and mints are simply “out of stock” at the moment.  This surge in demand changes the dynamics of the market and how we look at the washout low in Silver.

If demand continues to surge, which we have no reason to doubt at this stage of the Covid-19 virus event, and Silver begins to rally as it did in 2002~2005, then the Gold/Silver ratio will begin to collapse just as it did in 2003~2007 (see the first chart – Post “A”).  This means the demand for metals is skyrocketing and Silver has suddenly become a more “in demand” physical metal than Gold.

You want a reality check on how to trade gold, silver and the stock market in this type of market condition be sure to check this out.

CURRENT GOLD WEEKLY CHART

We believe the next phase of price action in Gold is a move above $1990 as demand for metals continues to surge.  This would represent a 100% Fibonacci price expansion of the last price rally from the lows set in September 2018 (near $1168).  It would also represent a rally from the current level of at least +22.50% in Gold.  Subsequently, if Silver begins to rally at a greater rate than Gold over this same span of time, Silver could rally to levels above $22 representing a +53% price rally according to our Adaptive Fibonacci Price Modeling system (the CYAN target on the chart above).

Pay attention to the Gold/Silver ratio and the price of Silver compared to Gold over the next 30 to 60+ days.  If our research is correct, the current low price of Silver will be a distant memory in less than 60 days and a tandem price advance in both Gold and Silver will propel the metals much higher.  How much higher?  From 2003 to the peak in 2011, Gold rallied 450% (from $350 to over $1900).  Over that same span of time, Silver rallied 1024% (from $4.50 to just under $50).

If we are right about this pattern setup and the future opportunities it may present, we could see Silver trading above $160 per ounce within 4 to 7 years.  Can you guess where Gold would likely be trading if Silver rallied 1000% from current levels?  Don’t miss this next big move in the metals.

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 short-term swing traders.

Visit my ETF Trading 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

These Index Charts Will Calm You Down

I put together this video that will calm you down, because knowing where are within the stock market cycles, and the economy makes all the difference.

This is the worst time to be starting a business that’s for sure. I have talked about this is past videos and events I attended that bear markets are fantastic opportunities if you can retain your capital until late in the bear market cycle. If you can do this, you will find countless opportunities to invest money. From buying businesses, franchises, real estate, equipment, and stocks at a considerable discount that would make today’s prices look ridiculous (which they are).

Take a quick watch of this video because it shows you what I expect to happen over the next 3-6 months, and beyond and it goes against what everyone else is thinking.

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

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 short-term swing traders.

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

Virus Curve, Market Crash, and Mortgage Massacre

In this last segment of our multi-part research article, we want to highlight our expectations of the Covid-19 virus event and how the next 6+ months of global market activity may play out.  We’ve covered some of the data points we believe are important and we’ve touched on the collateral damage that may be unknown at this time.  Today, we’ll try to put the bigger picture together for investors to help you understand what we believe may be the 12+ month outcome.

As the global central banks and US Fed attempt to come to the rescue, the reality is that monetary policy works better when consumers are able to actually go out and engage in spending and economic activity.  If the Covid-19 virus event contracts global consumer activity, as it has recently, for an extended period of time (4 to 6+ months), then we have a real issue with how QE efforts and consumer activity translate into any real recovery attempt.

The real risks to the global markets is an extended risk that the Covid-19 virus creates a contracting economic environment for many months/quarters and potentially fosters an environment where extensive collateral damage to corporations, consumer activity, credit/debt markets, and other massive financial risks boil over.

Before you 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!

News is already starting to hit that QE is not helping the deteriorating situation in the Mortgage banking business.  Remember, this is the same segment of the financial industry that started the 2007-08 credit crisis event.  News that mortgage lenders and bankers are already starting to experience margin-calls and have attempted to contract their exposure to the risks in the markets (a bit late) are concerning.  This is a pretty big collateral damage risk for the global markets.

Additionally, as we expected, applications for new mortgages have collapsed to their lowest level since 2009.  Until consumers feel confident in their ability to get out, engage in real economic growth and take on home loans they know are relatively secure in their ability to repay – there is going to be a continued market contraction.  The next phase of this contraction is a price reduction, forced selling/foreclosures and a glut of assets waiting for a bottom.

“Home-purchase applications dropped by 14.6% while

refinancing applications plummeted 33.8%… “

I think the most important aspect of this global virus event is to remember that we will survive it (in some form) and we will live to rebuild after this event completes.  Yet, the reality is that we were not prepared for this event to happen and we don’t know the total scope of this Covid-19 virus event.  We simply don’t know how long it will take to remove the threat of the virus and for societies to reengage in normal economic activity – and that is the key to starting a real recovery.

Hong Kong has recently reported a “third wave” of Covid-19 infections.  I believe we should attempt to learn from places like Hong Kong, where news is moderately accurate and reported via social media and other resources.  If we want to learn what to expect in the US and how the process of containing this virus may play out, we need to start learning from other nations that are ahead of us in the curve.

It appears that any attempt to resume somewhat normal economic activities while the virus is still active spouts a new wave of infections.  This would suggest that the only way to attempt to reengage in any somewhat normal economic activity would be when a vaccine or true medical cure is in place to allow nations to attempt to eradicate the virus as these waves continue. (Source: https://www.marketwatch.com/story/third-wave-hong-kong-thought-it-had-a-handle-on-coronavirus-it-doesnt-2020-03-23 )

The price collapse in 2008-09 represented a -56% decline from top to bottom.  Currently, the S&P has fallen by just over 35%.  We don’t believe the bottom in the US stock market has setup just yet and we do believe there is a greater downside price risk ahead.  We don’t believe the housing market will be able to sustain any of the current price levels for much longer.  We believe the collateral damage of this event is just starting to be known and we believe a greater economic contraction is unfolding not only in the US but throughout the globe.

Skilled traders need to understand the total scope of this event.  We’ve attempted to highlight this risk in this article and in our “Crunching Numbers” research article (PART III).  An economic contraction, like the Covid-19 virus event, could contract global GDP by as much as 8 to 15% over an extended 16 to 36+ month span of time.  Are we concerned about the Real Estate market?  You Bet!  Are we concerned about global markets?  You Bet!  Are we prepared for this as traders? You Bet!  Are the central banks global nations prepared for this? We certainly hope so.

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 short-term swing traders.

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

Market Wrap Technical Take with Moe & Chris – Audio


Yesterday I had a great call with Moe Ansari, who has over 40 years of experience trading and investing. We talked about the market and some technical analysis as to what we think about everything happening right now.

Moe and I share a comment thought which is:

IT IS NOT WHAT YOU MAKE, IT IS
WHAT YOU KEEP THAT COUNTS.

I have been pounding on the table for weeks since we closed out last trade in TLT for 20.07% profit on Feb 23rd, that cash is king, and it is more important to avoid uncertainty than it is to try and trade the random and volatile price action.

Subscribers of my ETF trading newsletter love the fact that our trading portfolio is at a NEW HIGH WATERMARK, and we completely sidestepped this market correction, which turned into a full out market crash.

I won’t lie. I knew a market correction was starting, which is why I adjusted our trailing stops to protect us if things began to turn south. But I did not expect a market collapse that would start a new bear market.

The good news is that because I strictly use technical analysis, position-sizing, and management of positions for profit-taking and trailing stops. We will never be caught on the wrong side of the market for more than a few days. So when a market collapse happens like what we are experiencing now, it does not affect our financial outlook.

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 short-term swing traders.

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

Chris Featured on TD Ameritrade TV – Safe Plays During Slowdowns

Recently I have been asked to talk on multiple TV shows, radio stations, and podcasts during this wild market correction in almost every asset class.

The reason being I think is from some recent articles I posted publically clearly shows how a technical trader can successfully time, trade, and protect capital no matter what happens in the equities, bonds, and commodities market.

In short, I had subscribers move their money into the leading assets in January which were GDXJ (gold miners) and TLT (bonds). I also talked about consumer staples, and utilities as safe havens.

These assets were outperforming the stock market and that is where you want your money to be positioned as you will earn more over time owning leaders that increase in value more than that of the average stock market index.

Spotting the leaders is not really that difficult, but what is tough is knowing what position size you should have in any given trade, where to place profit targets, and where to place stop losses/trailing stops.

As you have likely noticed gold miners GDXJ fell a whopping 57% from the highs if you didn’t have proven strategy then your likely still holding them and have endured one hell of a rollercoaster ride. Subscribers and I exited GDXJ at the high tick the day price reversed for a 9.5% profit because we had a trading strategy and executed our trading plan.

GDXJ had reached our extreme price target using technical analysis which was a clear resistance level for sellers to unload shares and that’s what did, sold our shares as well.

TLT actually had the biggest and best-looking chart out of all other asset classes which is why we focused mainly on that position with our capital. See our trade below as it paints a clear picture.

TLT/Bonds historically show that when they rally 20% in price quickly the instantly reverse and crash. Well, our Fibonacci upside target worked out to be a 20% gain and if that level was reached we would close out any remaining position we had, which we did. During the rally, we scaled out of the position at 5%, 7.5%, 10% gain, and then the last portion once 20% was reached. The next day, TLT reversed and fall 15% over the next two weeks.

TD AMERITRADE TV CLIP

CLICK HERE TO WATCH VIDEO

When To Get Aggressive With Your Portfolio And Gold Vs Gold Stocks

Chris Vermeulen, Founder of The Technical Traders joins Cory Fleck of Korelin Economics Report to discuss general strategies and market outlook for US stocks and precious metals. He argues that now is still the time to have a cash-heavy strategy.

As for Gold and gold stocks they are still in very different patterns. Gold continues to show strength and the stocks are doing well but still have yet to break out to get him excited.

Mr. Vermeulen has been a technical analysis and trader since 1997 and has been through a few bull/bear market cycles. He has a good pulse on the market and timing key turning points for short-term swing traders.

Visit his ETF Wealth Building Newsletter to follow him to success by riding his coattails while navigating these financial markets.

Chris Vermeulen
www.TheTechnicalTraders.com

Reality Check on Trading Equities & Precious Metals

As you may or may not know, the markets have a way of making it extremely difficult to trade in general almost all of the time if you do not have a trading plan.

One of the ways the market likes to pull money from traders is through morning opening gaps. For example, yesterday, the inflow of emails about gold, silver, and gold miners was insane. I keep trying to keep everyone in check with how to handle high-risk, high uncertainty, and volatile times, which, for our case right now, is a cash position for a few more days.

Unfortunately, big moves in price trigger emotions with some of you. It causes you to start trading just because you think you need to trade, which can be for many different reasons I won’t get into here. You should know my stance by now, which is cash is a position, and retaining our capital is more important than trading some times.

I know for a fact that all successful traders have a detailed trading plan, they can control their emotions, are logical, and they wait for opportunities vs. jumping at anything that moves more than normal.

Below is our portfolio equity curve, which we hit an all-time new high just days after the stock market started its crash. Maybe if you see what your portfolio growth curve would look like if you followed my trades, you will finally see the value in CASH.

I don’t trade a lot, and we are in cash when we don’t have any positions. Other times we will have 2 or 4 positions open, but it all depends on the market and volatility. You want trading to be simple, boring, and profitable, trust me on this.

PORTFOLIO GROWTH CHART

AVERAGE PORTFOLIO RESULTS THIS YEAR

Ok, enough of that rant, BACK TO MORING PRICE GAPS!
The stock market loves to do most of the day’s price range and profit potential in a way the average trader is not able to catch the move. Even more so, it is trying to get traders the worst entry or exit price.

New members over time will see and understand this when I talk about these gaps getting faded in my morning videos, which I will explain in a minute. For now, let’s take a look at the price of gold and the market sentiment from yesterday.

Yesterday gold traders were acting like a school of piranha’s. A big one day pop in price is like a drop of blood in the water, and it created a feeding frenzy. There was so much momentum going into the closing bell that the market makers will take advantage of this and walk the price up in pre-market trading the next day and try to reach the next resistance level before the opening bell.

This is what happened to gold, and miners this morning.  Market makers know there are still a ton of gold and miner stock buyers out there who are going to BUY as soon as the market opens, so what happens?

The general public pays the high price, way up at resistance, and the market makers get to sell any access shares they have for a huge profit. After that, the price generally fades (falls) back down, and the majority of buyers that day just bought at the high because of pure emotions and a lack of understanding. This happens for gaps to the downside as well in a similar manner.

Now, keep in mind, this is a very short term price action. The gap may fade down over the rest of the session or a few days, but it does not mean the uptrend is the price is finished longer term.

My point is, the market has a way to get you a bad fill MOST of the time if you do not understand how and why the price moves the way it does. Even if you know all this, sometimes we have no choice to pay the price depending on the trade setup if we want to get into a position. I just wanted to share this small tidbit on how the market moves with price gaps because almost all price gaps fill, fade back down to the previous days high for the stock indexes. Commodities gaps don’t always fill, because they are a very different asset class than equities.

MY CURRENT OUTLOOK AND THINKING FOR GOLD, SILVER, AND MINERS?

In short, gold is the only one in a bull market, and it’s been the definite leader time and time again for the past year almost. It remains in a bull market, and all the money printing/QE, and zero interest rate things are very bullish on metals long term. I like gold a lot, have for a while. I think it’s going higher still as I pointed out in yesterday’s afternoon video, $2600 is my primary target long term. If you didn’t watch yesterdays afternoon video be sure to do so here:

Members video: https://www.thetechnicaltraders.com/memberships/wbn/monday-afternoon-video-update/

As for gold miners and silver, well today is the same story as yesterday, everyone wants to own them and thinks they are missing the train. How you should see these charts and how to best trade them I tell you in yesterday’s afternoon video.

Trading now, in my opinion, is pure speculation and emotionally driven. Sure, you could be right, and this could be the bottom, but as technical traders using rules, logic, and a proven strategy, we are not cowboys trying to pick a bottom to be early. A broken clock is right two times a day. You may get lucky, but because bottom picking without any technical confirmation is a sucker’s (gamblers) game in the long run.

As our portfolio graph above speaks for its self, in that we do not need to catch every move, in fact, we just need to catch a couple of low-risk trades and slowly build our capital.  I was told by one of my mentor traders years ago, once trading becomes slow and boring to you, that’s when you finally understand the market and have a proven trading strategy.

I hope you find this helpful, and if you want this type of info every day, plus my videos, and winning trading strategy, become a member right now!

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTrader.com