Posts

Investors are confident, bullish and buying stocks, but…

The Technical Traders Ltd has identified a unique price to volatility relationship between the SP500 and VIX index.  The calculations required to compute the VIX index are composed of a number of factors. That final value of the VIX index is reported on an annualized basis. This means that VIX index as already internalized the past 12 months price volatility into the current VIX levels.

We believe this increased VIX volatility expectation could be muting future VIX spikes and trading systems focus on the VIX Index.  The fact that the VIX as likely to internalized that large October to December 2018 price rotation and will not move beyond this price range until well after April or May of 2020 creates a unique problem for VIX systems and analysts. In short, the VIX has normalized a 20% price volatility expectation, or more, and will not reduce this expectation until well after April or May of 2020.

Taking a look at this weekly VIX chart clearly highlights the large 472% increase in January and February 2018.  The reason why the VIX increased by this incredible amount is that the prior 12 months price volatility was extremely muted.  The price rotation in the SPX was -343, for a total of -12%. The second VIX Spike between October and December of 2018 resulted in a 227% increase while price rotated more than 600 points, -20.61%, in the SPX. Obviously, the larger price movement in October through December 2018 would have likely resulted in a large VIX move if prior volatility expectations had remained the same.

It is our belief that the January to February 2018 price volatility rotation increase the VIX volatility expectations by at least 30 to 40%. The second, much larger, price rotation during October to December 2018 pushed the VIX volatility expectations higher by at least 10 to 15%. Our researchers believe the normalized VIX levels representing current price volatility are likely to stay above 12 or 13 until well after November or December 2019 if price volatility and expectations stay rather muted. Any additional large price rotations, to the downside, will likely continue to normalize or internalize increased VIX level volatility expectations.

This SPX chart helps to compare the relative VIX price increases in relation to the true SPX price volatility. We’ve also drawn a 12-month price window, as a red box on this chart, to highlight how the VIX attempts to normalize the past 12 months volatility going forward. It is our belief that a move above 500 to 600 points in the SPX may only prompt a rally in the VIX to near 28 to 30. Whereas, the same price swing from October to December 2018 prompted a VIX move to about 36. We would need to see the SPX move at least 900 points before the VIX will spike above 25 again.  Remember after January or February of 2020 the VIX may begin to contract again as price volatility stays muted for the rest of this year.

We currently believe a large price rotation may be set up for near the end of 2019. Our proprietary cycle modeling systems and extended research are suggesting this downside move may begin sometime near August or September of 2019. Remember, this new VIX research suggests that any large price downswing may result in a very moderate VIX price increase at first. In other words, things could get very interesting towards the end of 2019 for traders.

Please take a minute to visit www.TheTechnicalTraders.com and see how we have been navigating, trading and profiting from the market over the past 17 months, I think you will be pleasantly surprised. Our research team believes the US stock market will likely form an extended pennant formation over the next 60+ days.  Now is the time for us to plan and prepare for what may become a very volatile second half of 2019 and early 2020.

Become A Technical Trader Today Using
Our Trade and Investing Signals
CLICK HERE

Chris Vermeulen

Technical Analysis Shows Aug/Sept Market Top Pattern Should Form

We have been pouring over the data and currently believe our earlier prediction of a July/August 2019 market top should be revised to an Aug/Sept 2019 expected market top pattern.  The following research posts we authored recently suggested a top may form in July/Aug 2019 and believe this critical top formation would form at new all-time highs.  We still believe this is possible regarding the price predictions, yet we believe the price top will now form near the end of August or early September after an extended Pennant/Flag formation is completed.

Please review the following research posts by our team…

June 5, 2019: Fear Drives market Expectations: HERE

May 14, 2019: Trade Issues Will Drive Market Trends, Part II: HERE

March 31, 2019: Proprietary Cycles Predict July Turning Point For Stock Market: HERE

Using our proprietary price modeling tools and systems, believe the critical price peak in the US stock market will now happen between August 26 and September 20 (see the chart below).  A number of key factors are lining up to extend this topping pattern into August/September and the key component is the formation of the Pennant/Flag formation and the fact that this price pattern must complete before a breakout/breakdown move is possible.

An upside price bias will continue throughout the formation of the Pennant/Flag formation leading to a moderate price breakout where the S&P will briefly break through the $3000 price level, then stall – forming the Top pattern/rotation we are expecting.

A continued Capital Shift will drive prices higher over the next 45 to 60+ days where foreign capital will continue to chase the strong US Dollar and the strength of the US stock market.  The true critical price move, where our analysis will become even more important, happens after September 1, 2019 – where the Pennant Apex and a critical inflection point are set.

On June 5, 2019, we posted this VIX chart in the article listed above.  The US stock market will rotate higher in an upward price bias over the next 45+ days.  This will project the Pennant/Flag formation and set up the critical top pattern that we are expecting in late August or early September.  When you look at this chart of the VIX, below, consider that the upside price move in the VIX may be delayed by about 10 to 15 days based on our newest analysis.  We still believe the VIX expansion will happen as we are suggesting, we are altering the timeline of these predictions to support our newest research.

As we move closer to these critical dates, we’ll keep you informed of our expectations and what new information our predictive modeling systems are suggesting.  In the meantime, get ready to play some moderate price swings.  Don’t get caught on the short side of this move just yet.  We have no real confirmation that a large downside move will take place over the next 60+ days and these early shorts are going to feel a lot of pressure over the next 45 to 60+ days if the market moves higher.

This is one scenario of how the stock market may play out, we have a few others we are following with subscribers to our Wealth Building Newsletter with much more detail. Each day we share a pre-market video and show you where all the major markets are headed for the day, week and month ahead. The analysis is done on the futures market but we focus on trading ETFs for the indexes and commodities.

In fact, there are several super cycles starting to take place as we head into 2020 and beyond which Brad Matheny and layout in our new book: 2020 Cycles – The Greatest Opportunity Of Your Lifetime

Chris Vermeulen
www.TheTechnicalTraders.com

Could Gold Rally Above $3750 Before December 2019?

We asked our researchers a question recently, “Could Gold rally above $3750 before the end of 2019?”.  We wanted to see what type of research they would bring to the table that could support a move like this of nearly 200% from current levels.  We wanted to hear what they thought it would take for a move like this to happen and if they could support their conclusions with factual conjecture.

Now we ask you to review these findings and ask yourself the same question.  What would it take for Gold to rally above $3750 (over 200% from current levels) and why do you believe it is possible?

Our research team came to two primary conclusions in support of a Gold price move above $3750 :

A)   The US Presidential election cycle/political environment could prompt a vicious global economic contraction cycle of fear and protectionist consumer and corporate activity that propels the global economy into a deflationary (mini-crisis) event.

B)   The global trade wars could complicated item A (the US Presidential election cycle) and create an accelerating component to this global political event.  The result is the mini-crisis could turn into “
a bit more” than a mini-crisis if the global trade wars prompt further economic contraction and disrupt global economic activities further.

Our research team suggested the following as key elements to watch out for in terms of “setting up the perfect storm” in the global markets.

A)  The US Dollar falls below $94 and continues to push a bit lower.  This would show signs that the US Dollar is losing strength around the world

B)  The Transportation Index falls below $4350 and begins a bigger breakdown in price trend – targeting the $3000 level.  This would indicate that global trade and transportation is collapsing back to 2007-08 levels.

C)  Oil collapses below $45 would be a certain sign that global Oil demand has completely collapsed and the sub-$40 level would very quickly come into perspective as a target.

D)  Global Financial stability is threatened by Debt/Credit issues while any of the above are taking place.  Should any of the A, B or C items begin to take form over the next few weeks or months while some type of extended debt or credit crisis event is unfolding, it would add a tremendous increase of fear into the metals markets.

Our researchers believe the US Dollar is safe above the $91 level throughout the end of 2019 and that any downside risk to the US Dollar would come in brief price rotations as deflationary aspects of the global economy are identified. In other words, at this time, we don’t believe the US Dollar will come under any severe downside pricing pressures throughout the end of 2019.  We do believe a downside price move in the US Dollar may be setting up between now and early July 2019, but we strongly believe the $91 to $93 level is strong support for the long term.

The Gold Spot price / the US Dollar price chart highlights the incredible upside price move in Gold after 2001-02.  It was almost a perfect storm of events that took place after this time to prompt a move like this to the upside.  Not only did we have multiple US based economic crisis events, we also had a series of global economic “shifts” taking place where capital and assets were migrating all across the globe searching for superior returns.  Could this happen again??  Of course it could.  Although, we believe the next move in precious metals will be met with a completely different set of circumstances – very likely targeting foreign nations and not the US economy.

This SPDR GLD chart shows a moderately safer play for investors and traders.  The potential for a 20%+ upside price move over the next 60+ days is quite likely and our belief is that traders should be able to trade GLD throughout many of the upside and downside price rotations over the next few weeks and months.  Ultimately, if you are skilled enough to pick proper entries, a decent trader could focus on GLD and pick up 65% to 120% ROI over a 7 to 12 month span of time.

Our Last Gold Forecast From October 2018 Unfolding Perfectly

Pay attention to where the opportunities are for your level of skill and capital.  As we’ve been saying for many months, 2019 and 2020 will be fantastic years for active traders.  Stick with what you can execute and trade well because there will be dozens of trades available to most traders over the next 16+ months.

Overall, our research team believes that precious metals have just begun to move higher on a WAVE C impulse move.  We authored a research post suggesting that Gold and Silver were currently 20 to 30% undervalued back in late May 2019.  The current upside move in Gold and Silver may be just the beginning of a much bigger move.

Ideally, we believe this initial impulse move will end above $1650.  From these current levels, that reflects a 25% to 30% upside move in GLD.  If any of the fear-inducing items, listed above, begin to take shape over the next 12+ months, we could certainly see Gold above $2100 before too long.  $3750 may seem like “shooting for the stars”, but all it takes is a combination of fear and deflation/inflation to drive investors into a gold-hoarding mode just like we saw after 2003-2004 – and that move prompted a 500% price rally from the $300 base level. That same move today would put the current price of Gold near $7800.  It might seem like it could never happen – but it could.

Bottom line, we forecast the markets and share some extreme analysis like this to open your eyes to some potential opportunities. But, you cannot just jump into gold or miners after reading this and think you are set for success. The markets are never that simple. You must actively adjust and trade with the market and our daily video analysis is what will keep you on the right side of the market more times than not. This week, we locked in some profits on our long gold ETF, and gold miners ETF, why? because our analysis says both of these are at resistance and could pullback before heading higher. We don’t buy, hope and hold, we enter positions, lock-in profits, rinse, and repeat over and over again.

Get my daily video analysis and trade alerts today by subscribing to the Wealth Building Newsletter.

Chris Vermeulen
www.TheTechnicalTraders.com

Is Silver The Sleeper Rally Setup Of A Lifetime?

Our research team believes Silver could be the Sleeper Rally setup of a lifetime for investors if the global economic cards continue to get scattered and crumpled over the next 10+ years.  The recent rally in Gold got a lot of attention last Friday (the end of May 2019).  We had been warning about this move for the past 8+ months and generated an incredible research post in early October 2018 that clearly highlighted our belief that Gold would peak above $1300 early in 2019, then stall and move toward $1270 near April/May 2019, then begin an incredible upside price rally in June/July/Aug 2019.  We couldn’t have been more clear about this prediction and we posted it publically in October 2018. See This Previous Gold Forecast Snapshot

Now, our research team is going to share with you some incredible insights into what may become the most incredible trade setup we’ve seen in the past 12+ years – the Sleeper Silver Setup.

Going all the way back to the early 1970s, when the Hunt Brothers ran most of the metals markets, we can see the incredible price rally in Silver from $1.28 per ounce to nearly $41.50 in late 1979.  This move setup with a very simple pattern – a high price breakout in 1973 that broke a sideways price channel and initiated a nearly 6+ year rally resulting in an incredible 3142% price increase from the lows.

Could it happen again?

Well, after this incredible price peak, the price of Silver languished and moved lower, eventually bottoming in 1991 near $3.50.  After that bottom setup, the price of Silver setup another sideways price channel and traded within this range until a 2004 High Price Breakout happened AGAIN.  It seemed inconsequential at the time – a rogue high price near $8.50.  Maybe that was it and maybe price would just rotate lower back to near the $4.00 range??

This High Price Breakout setup an incredible price rally that resulted in a continue price advance over the same 6+ year span of time.  This rally was not as big as the 1974 to 1979 price rally in percentage terms, but it was much bigger in terms of price valuation.  The 1979 price peak ended at $41.50 and resulted in a $40.25 price increase whereas the 2011 price peak resulted in a $46.32 price increase.

Will it happen again in our lifetime?

As incredible as it might seem, we believe Silver is setting up another High Price Breakout pattern that should conclude within the next 2 to 4 months with a price high near $22.50 to $24.00 (see our proprietary Fibonacci price modeling projections below).  After this peak is reached, hold on to your hat because we believe the upside price rally could mimic past rallies and attempt to immediately move the price of Silver to well above $85 per ounce.  Ultimately, we can only guess as to where the top of this move may end – but we can safely estimate it will likely top somewhere between $90 and $550. This, of course, will require some type of major bear market is other asset classes and possibly some global crisis but we believe it is very possible in due time.  Our predictive modeling systems will help us determine where the actual price peak will be as this unfolds over time.

And there you have it – one of the most incredible trade setups you’ll ever see in your lifetime.  Yes, it may happen twice in your life or more, but we believe this setup in Silver is just weeks or months from initiating the next upside price leg (the High Price Breakout) and we are alerting you now to be prepared.

UNIQUE PHYSICAL SILVER OPPORTUNITY:

We should start to see money flow into the safe-haven assets like the Utility sector, bonds, and most importantly precious metals. I anticipated this and our XLU utilities ETF taken with members was a quick 3.11% winner. Our VIX ETF trade also hit our 25% profit target within a few days of entry.

Now, I have a few silver rounds here at my desk I am going to give away and ship out to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. You can upgrade to this longer-term subscription or if you are new, join one of these two plans listed below, and you will receive:

1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)

2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)

I only have few silver rounds I’m giving away
so upgrade or join now before its too late!

SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!

Chris Vermeulen

US Memorial Day Weekend Market Analysis

The US Memorial Day weekend is set up to become a very interesting time for investors.  The EU voting is complete and the change in EU leadership may move the markets a bit.  China appears to be playing a waiting game – attempting to hold the US/Trump at bay until after the 2020 US elections.  This week is certain to be very interesting for traders/investors.

The European stocks moved higher in trading on Monday as the relief from the EU election event and support for auto shares pushed the markets higher. The transition in the EU over the next few months will solidify into a political and social agenda.  The EU leadership must acknowledge these future objectives of all parties in order to maintain some level of calm.  It is evident that many EU nations are relatively satisfied with the current leadership while others are transitioning into more centrist leadership.  The next 4+ years will be full of further transition in the EU.

China is another global issue that is relatively unsettled.  We’ve been doing some research with regards to China and the potential future political and economic pathways that may become evident in the near-term future.  Our biggest concern is that China has been inflating their economic levels for decades and the true scope of the Chinese economy may be much weaker than everyone expects.  If our suspicions are correct and China has been inflating economic levels for many years, then the transition to a consumer/services-driven economy may be dramatically over-inflated and the US/China trade issues could be biting much harder than the Chinese want to admit.

The “Sell in May and go away” market saying may become absolute truth in 2019.  Our expectations are still suggesting that an attempt at new market highs may take place before August 2019, but the current market rotation (lower) is setting up a very strong potential for further downside price action at the moment.  Our proprietary Fibonacci price modeling system is suggesting the $7294 level in the NQ is key support.  Below this level, the NQ could break much lower and potentially target $6850 or lower.

 

The YM is setting up a similar price pattern with resistance near 25,840.  We believe this resistance will push prices lower as we move further into early June.  The potential for some type of surprise economic data or Fed/Global market move after this weekend is somewhat higher than expected.  There is a lot of shifting taking place throughout the globe and we believe this turbulence will reflect in the US market soon enough.

 

As of right now, our expectations are that a brief upside price rally will take place over the next 4~7+ days before a continued downside price trend may become evident.  Pay attention to the news cycles for key elements that could drive the US stock market lower.  We will continue to update you with regards to our proprietary research and expectations.  The next 7+ days will likely be nothing but sideways price rotation within a Pennant/Flag formation.

Read our research to understand how this setup coincides with the GOLD price setup and why it is important to understand why July 2019 is so important.  Please take a minute to review these recent research posts that focus more on the US Dollar and Gold, and also the July turning point for US Stocks.

4 DAYS LEFT TO GET YOUR FREE SILVER ROUNDS WITH SUBSCRIPTION!

We continue to see money flow into the safe-haven assets like the Utility sector, bonds, and most importantly precious metals. I anticipated this and our XLU utilities ETF taken with members for 4.4% already, and our VIX ETF trade we closed for a 25% last week.

For May I am going to give away and ship out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. You can upgrade to this longer-term subscription or if you are new, join one of these two plans listed below, and you will receive:

SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!

Chris Vermeulen

Bitcoin Stalls Near $8100

After an incredible 7+week rally in Bitcoin, from $3700 to above $8000, the current price action is setting up for what may become an extended Pennant/Flag formation with quite a bit of sideways trading ahead.

Our researchers believe the past 7+ weeks rally in Bitcoin was prompted by a shift away from risk in Asia/China and into more suitable protection assets.  Cryptos appear to be the easy choice for many as this rally coincided with the April 3rd through 6th US/China trade talks in Washington, DC (https://www.scmp.com/economy/china-economy/article/3004961/us-says-theres-still-significant-work-be-done-trade-talks).  It appears that many investors were preparing for a difficult deadline after the March 1st deadline for a deal was pushed back.  These early April trade talks may have been interpreted as a “do or die” effort from both sides.  Again, shortly after the May 1st US/China trade talks in Beijing, Bitcoin began another rally from the $5200 level all the way up to the $8000 level.

Our contacts, although we admit they are fairly limited in total quantity, have stated the sentiment from locals in China are very pessimistic on the US and President Trump.  A few of our contacts have recently stated they have been laid off or terminated from their jobs and, as we understand, locals have already started to react in a protectionist mode.  This happens when economies contract quickly.  Consumers attempt to protect their wealth and assets by moving any capital they have into something more efficient than their local markets – thus Cryptos.

This Weekly Bitcoin chart highlights areas that we believe our current support and resistance levels.  The $8000~8100 level goes all the way back to the February 2018 low.  This is a critical level for trading as it became a massive price support level back in 2018 – and eventually became critical resistance in July 2018.  Additional resistance is found near $9900.

 

This Daily Bitcoin chart highlights what we believe are the current Key Highs and Key Lows that will tell us if the next phase will be a continued rally or a breakdown in price.  The Key Low near $7480 must hold for any further upside price advance.  If $7480 is broken, we would expect the next Key Low price to be targeted (near $6200).  Otherwise, if another rally breaks out and price rallies above the Key High, then we could see an upside target range between $9200 to $9700 very quickly.

 

You can see from our BLUE CHANNEL levels on the lower indicator that we believe a Pennant/Flag formation may be setting up in Bitcoin right now.  This type of price rotation is not uncommon after a big move like we’ve seen already and it could be a fairly wide price rotation as this sideways Pennant/Flag pattern continues.  The current range between Key Highs and Key Lows is about $2000 – lots of room for trading/traders.

The key to understanding this move is the protectionist thinking of the people of China.  They are very likely attempting to move their capital into something that is not Chinese Yuan based and away from traditional holdings (Gold, Real Estate, Jewelry or other assets).  Eventually, we will likely see Gold/Silver follow the rally in Cryptos if fear continues to hit the markets.  Cryptos, although, appear to have executed the first leg of the “fear trade” originating from the breakdown in the US/China trade negotiations.

An additional word of warning should be that any resolution to the US/China trade talks over the next 60+ days could remove any long term support for this upside move in Cryptos.  Pay attention to the news cycles and what is happening in China, the EU and the rest of the world.  As fast as it went up, it could easily break down as news hits.

Lots of great price action unfold to take advantage of. Subscribers just closed out a 24% winner and another 3.46% as the markets prepare for a new move. If you want my trade signals and alerts be sure to check out my Wealth Trading Newsletter.

Chris Vermeulen
www.TheTechnicalTraders.com

Oil, Hot Stocks, and Currencies – Part III

In our continued effort to help skilled traders/investors understand the future risks associated with geopolitical market turmoil, the EU Elections next week and the continued US/China trade war, this Part III of our Sector Rotation article will highlight certain sectors that we believe may continue to perform over the next 12 to 24+ months and help traders/investors survive any extended price volatility/rotation over that same time. Read Part I, and Part II.

Currently, the US stock market has weathered a bit of a jolt in terms of price rotation.  After many stock indexes reached new all-time highs, the news of Iran Oil Sanctions, US/China trade talks failing and the political turmoil in DC as an incredible 2020 US Presidential election cycle heats up, investors are watching the markets for any signs of strength or weakness.  Meanwhile, the US Dollar continues to strengthen against other global currencies in an incredible show of “King Dollar” strength and dominance.  All of this plays into one of our favorite narratives that we started discussing over 30 months ago – the Global Capital Shift.

For those of you who remember our many articles about this global market phenomenon and the root causes of it, we’ll try to keep the following example/explanation of it fairly short.  For those of you that are new to our research, please allow us to try to explain the Capital Shift event and why it is important to understand.

The Capital Shift started after the 2008-09 global credit market collapse.  The US and many other nations created an easy money policy that was designed to spark investment and recovery across the globe.  This easy money, at first, supported failing companies and governments in order to maintain social order and structure.  After that process was completed, this capital went to work investing in under-valued global markets and assets.  As prices continued to rise and the easy money policies became rooted into the social structure, the hunt for greater returns rotated throughout the planet – diving into undervalued markets and opportunities, often with no regard for risk.

After 2014, things began to change in the US and throughout the planet.  The US entered a period of extended sideways trading that caused many investors to reconsider the “buy the dip” mentality.  In 2014-15, China initiated “capital controls” in an effort to prevent outflows of capital from a newly rich population and corporate structure.  Just before 2014, the Emerging Markets went through a period of pricing collapse which was associated with over-inflated expectations and $100+ oil.  All of that started changing in 2014~2016 as Oil prices collapsed – taking with it the expectations and promises of many Emerging Market investors and speculators.

This shifting of capital in search of “returns with a moderate degree of risk” is what we are calling the “Capital Shift Event”.  It is still taking place and it is our opinion that the US stock market will become the central focus of global capital investment over the next 4+ years.  We believe the strength of the US Dollar and the strength of the US Stock Market/US Economy will drive future capital investment into US and other US Associated major markets in an attempt to avoid risks associated with the foreign market and currency market valuations.  In other words, when the crap starts flying across the globe, cash will rush into the US and other safe-haven investments to protect real value.

 

Currently, the potential for another price decline in Crude Oil is rather strong with our research expecting a move back below $55 ppb over the next 4+ months.  We believe a further economic contraction across the globe with a very strong potential for increased price volatility will drive Oil prices back below $55 with a very strong potential for prices to settle near $46~48 before the downward trend is completed.

The potential for some type of price contraction over the next 12+ months will be related to how the global and localized economic concerns play out over the next 24+ months.  Yet, investors can prepare for these extended price rotations now by becoming aware of weakening price trends and the potential that certain sectors will likely be hit harder than others.  For example, the most recent price weakness in the US stock market appears to be focused in certain sectors:

Technology, Semiconductors, Scientific Instruments, Financials, Asset Management, Property Management, Banking (Generally all over the US), Consumer Goods – Electronics, Airlines, Mail Order Services, Industrial Goods, Aerospace/Defense, Farming and Farming Supply, Medical Laboratories, Medical Appliances, Oil & Gas and others.  This type of market contraction is fairly common in an early stage Commodity and Industrial economic slowdown.

 

The sectors that are improving over the past week are : Healthcare, Electric Utilities, Diversified Utilities, Gas Utilities, Consumer Personal Products, Consumer Confectioners, Cigarettes, Entertainment, Beverages and Soft Drinks, Meat Products, Specialty Eateries, REITS (almost all types), Credit Services, Telecom and Telecom/Communication Services.

All of these are protectionist rallies based on the US/China trade war and the market rotation away from Technology/manufacturing growth and into more consumer protectionist spending mode – where the consumer and larger firms focus on core items while expecting a mild recession within the economy.  All of this is very common at this time within the US Presidential Election cycle.  In fact, our researchers have shown that nearly 80% of the time when a major US presidential election is taking place, the US stock markets will decline within the 24 months prior to the election date.

The Monthly S&P heat map is not much different.  It is still showing weakness where we expect and strength in sectors that have been somewhat dormant over the past 4+ years.  The key to success for skilled traders is to be able to play this future price rotation very effectively as the different sectors continue to rotate headed into the 2020 US Presidential Elections and with all of the external foreign market factors taking place.

 

It is quite likely that the US Dollar will continue to push high, possibly well above $102, before finding any real resistance.  It is very likely that most of the US stock market will fair quite well over the next 24+ months – yet we do expect some extended price rotation over this time and we believe Technology, Financials, Real estate, and Industrial/Consumer related stock sectors could take a hit over the next 16 to 24 months.  These rotations are, again, common for this type of US Presidential Election cycle.  Skilled traders are already aware of this cycle and have begun to prepare for this event to unfold.  The unknowns of the current global market is China and the EU at present.

 

And with that last US Dollar chart, there you have it.  Our three-part article about how the Global Capital Shift is about to intensify and continue to drive a US Sector rotation that many traders have failed to consider.  The EU elections, the US/China trade wars, and the US Presidential Election event are all big factors in what we believe will drive in an increased level of uncertainty over the next 16~24 months.  Additionally, we are very concerned that China is very close to experiencing what we are calling a “broken backbone” over the next 12+ months.  We believe the pricing pressures in combination with a slowing economy and a consumer move into a protectionist stance could create a waterfall event in China/Asia.

Our advice for traders is to protect open long positions and to prepare for 16 to 36 months of “repositioning” of the global markets.  The US elections are certain to drive an incredible range of future expectations throughout the world.  Combine that with the EU elections, the BREXIT effort and the continued repositioning of US/China/Foreign market relations and we are setting up for a big shock-wave event in the near future.

Follow our research.  We’ve already mapped out the next 24 to 36 months of market price activity with our proprietary price modeling tools.  We believe we know what will happen over the next 24 to 36 months, we are just waiting for the price to confirm our analysis. Visit www.TheTechnicalTraders.com to learn more.

Chris Vermeulen
Technical Traders Ltd.

 

How Sustainable Is The Move Into Safe Havens?

Chris Vermeulen. Founder of The Technical Traders joins me to share his thoughts on the recent flow of money into safe haven assets. During the selloff, yesterday in US markets money moved into bonds, gold, and back into the USD. We discuss just how long this run could last and which sectors Chris is the most bullish on.

This is proving to be an incredible trading year for traders who follow our trade alerts newsletter.

For active swing traders, you are going to love our daily trading analysis. On May 1st we talked about the old saying goes, “Sell in May and Go Away!” and that is exactly what is happening now right on queue. In fact, we closed out our SDS position on Thursday for a quick 3.9% profit and our other new trade started Thursday is up 18% already.

Second, my birthday is only three days away and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.

Right now I am going to give away and shipping out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. I only have 3 left as they are going fast so be sure to upgrade your membership to a longer-term subscription or if you are new, join one of these two plans, and you will receive:

1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)

2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)

I only have 3 more silver rounds I’m giving away
so upgrade or join now before its too late!

SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!

Happy May Everyone!

Chris Vermeulen

Our Long-Anticipated Gold Momentum Rally Begins

Over the past 6+ months, we’ve been covering the price rotations in precious metals very closely.  We’ve issued a number of amazing calls regarding Gold and Silver over the past few months.  Two of the biggest calls we’ve made were the late 2018 research post that suggested Gold would rally to above $1300, then stall.  The other amazing call was our research team’s suggestion that April 21~24 would see Gold setup an Ultimate Base, or what we were calling a “Momentum Base”, near $1250 to $1275.

We issued both of these markets calls many months in advance of these dates/price levels targeting these moves.  In both cases, we issued these market calls well over 60 days prior to the move actually taking place.  The accuracy of these calls can be attributed to our proprietary price modeling solutions as well as the skill and techniques of our research team.  Don’t mind us while we take a few seconds to take credit for some truly amazing precious metals calls over the past 6+ months.

This Weekly Gold chart highlights just about everything we have been suggesting would happen over the past 12+ months.  The rally in Gold from below $1200 to almost $1350 setup an upside price leg that we believe is still just beginning.  The rotation lower, after the February 2019 highs, setup the Momentum Base near April 24 – RIGHT ON TARGET.  Now, the upside price advance that we’ve been predicting should launch Gold well above the $1400 price level appears to be setting up.

Our Adaptive Dynamic Learning price modeling system, as well as our Adaptive Fibonacci Price modeling system, have been key elements to unlocking these early calls.  You can read more about our earlier Gold and Silver calls by reading this article: https://www.thetechnicaltraders.com/adl-predictions-for-price-of-gold/

The next leg higher for Gold will see a price peak near $1450 before another brief sideways/stalling pattern sets up.  After that, our research suggests a rally will quickly drive Gold prices above $1550 (or much higher).

 

As we’ve been suggesting, Silver will likely lag behind Gold by about 20+ days.  We believe Silver is going to see an incredible upside price move – even bigger than Gold in percentage terms.  Our belief is that Silver will be trading above $26 to $28 per ounce – almost DOUBLE the recent low price level, when Gold will be trading just above $2000 per ounce.  The reason for this is the relationship between the Gold/Silver/US Dollar pricing levels – called the Gold/Silver Ratio.  The chart is below

When the ratio is above 0.80, we consider this to be a “Moderate Peak” zone for Gold.  Where the price of Gold (per ounce) represents more than 80 ounces of Silver.  The ratio of the price of Gold to the price of Silver is a fairly common measure to determine when Silver is very undervalued compared to Gold.  When the ratio typically falls above 0.80, then the price of Silver is very cheap compared to the price of Gold.  When this ration move above 0.90, these levels are Extreme Peaks in the disparity of pricing between Gold and Silver.  These are the areas where both Gold and Silver rally back to restore a ratio level closer to 0.60 or 0.65 (or lower).

This would indicate that the price of Silver will rally much faster than the price of Gold and in order for this ratio to move back to the 0.06 level, Silver would have to rally at a rate of 1.35:1 or 1.45:1 compared to Gold.

Custom Index – chart by TradingView

 

This Weekly Silver chart highlights the levels we are watching for the upside breakout in Silver to begin – $15.40 or higher and we believe the upside price move in Silver till accelerate well above $18 per ounce very quickly.  Again, the move in Silver will likely lag behind Gold by at least 20+ days.  So now if the time to buy Silver in physical form (or any form) as we prepare for this move.  Once it starts, we can promise you that the rally will be impressive and quick.

 

Watch how Gold and Oil react over the next few weeks as Fear re-enters the global markets.  Our belief is that Oil will fall while Gold initiates the first leg higher, towards $1400 to $1450 before stalling.  Once this happens, we can be certain a new upside price advance is beginning in Gold and this could be a fairly strong indicator that the markets are weakening and there is increased global fear.

This is proving to be an incredible trading year for traders who follow our trade alerts newsletter.

For active swing traders, you are going to love our daily trading analysis. On May 1st we talked about the old saying goes, “Sell in May and Go Away!” and that is exactly what is happening now right on queue. In fact, we closed out our SDS position on Thursday for a quick 3.9% profit and our other new trade started Thursday is up 18% already.

Second, my birthday is only three days away and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.

Right now I am going to give away and shipping out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. I only have 4 left as they are going fast so be sure to upgrade your membership to a longer-term subscription or if you are new, join one of these two plans, and you will receive:

1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)

2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)

I only have 4 more silver rounds I’m giving away
so upgrade or join now before its too late!

SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!

Happy May Everyone!

Chris Vermeulen

Trade Issues Will Drive Market Trends – PART II

In PART I of this report we talked about and showed you the charts of the Hang Seng and DAX index charts and what is likely to unfold. In today’s report here we touch on the US markets. As we’ve suggested within our earlier research posts this year, US election cycles tend to prompt massive price rotations when the election cycles are intense.  For example, the 2000 election of George W. Bush prompted a very mild price rotation in 1999~2000.  This was likely because the transition from Clinton to Bush II was not overly contentious.  The 2008 election of Barrack Obama was a moderately contested election cycle and happened at the time of the biggest credit market collapse in modern history – thus, the markets were well on their way lower 12+ months before the elections.  The 2012 election cycle showed moderate price rotation as it was a highly contested election event in the US.  The 2015-16 election event was highly contested as well and the price rotation near this time appears longer and deeper than the 2012 event.

Now, in 2020, we have one of the biggest, most highly contested US election cycles in recent history unfolding and we have already begun to see a price range /rotation over the past 12+ months that suggests we could see even bigger price rotation.  If we add into this mix the US/China trade issues, global market concerns, US political rhetoric, and other issues, we have a recipe for A BIG MOVE setting up.

 

Our analysis still suggests that we are poised for an attempt at fresh new all-time highs before any massive price rotation takes place (near the upper trend line).  Yet, we believe the downside price rotation is an eventual component of the next 16+ months of the US election cycle and the future price advance that should take place in the near future.  In other words, we believe the markets are setting up for a bigger shake-out throughout this election cycle/trade issue event that will prompt lower prices before the end of 2019.  We do believe the markets will settle and resume an upward trend bias after this downside price rotation – yet we don’t know exactly when that will happen.

 

To the best of our ability to predict the future, we can state this at the moment.  It appears the end of 2019 will be filled with large price rotation – likely to the downside as trade issues and election/political issues cause a “shock-wave” in the markets.  We believe early 2020 will see a relief rally that may setup a bigger price move throughout the remainder of 2020.  Right now, traders need to be prepared for an incredible increase in volatility and price rotation.  It is very likely that we will see a VIX level above 40 at some point before the end of 2019.  This is a time for skilled traders to get in, get profits and get out.  Position trading over the next 12+ months will be very difficult.

For active swing traders, you are going to love our daily trading analysis. On May 1st we talked about the old saying goes, “Sell in May and Go Away!” and that is exactly what is happening now right on queue. In fact, we closed out our SDS position on Thursday for a quick 3.9% profit and our other new trade started Thursday is up 18% already.

Second, my birthday is only three days away and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.

Right now I am going to give away and shipping out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. I only have 5 left as they are going fast so be sure to upgrade your membership to a longer-term subscription or if you are new, join one of these two plans, and you will receive:

1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)

2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)

I only have 5 more silver rounds I’m giving away
so upgrade or join now before its too late!

SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!

Happy May Everyone!

Chris Vermeulen