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Vix Warns Of Imminent Market Correction

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX.  These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance.  This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. You can get all of my trade ideas by opting into my free market trend signals newsletter.

VIX VALUE DROPS BEFORE MONTHLY EXPIRATION

When the VIX falls to levels below 12~13, this typically very low level is usually associated with an extreme peak in price.  Throughout history, after the VIX has collapsed to these types of low price levels, the markets have a tendency to revert/correct in ranges that are typically in excess of 3.5% to 5.5%. In some cases, these corrections have been as large as 11% to 18% or more.

CURRENT CONTINOUS VIX PRICE CHART

The current VIX level, near 12, is near the lowest historical levels of the past 12 months.  Every time the VIX has fallen to near these levels, a peak in price has set up within just a few days potentially.  Each time this setup has occurred, the price has rotated/corrected downward by at least 5.5%.  Is that about to happen again in the US markets?

CUSTOM MARKET CAP INDEX

Our custom Market Cap Index is also suggesting a market peak has setup and that price may likely revert to lower levels. Historically, when the price reaches these extreme price ranges, a rotation/reversion price event takes place.  We believe a price reversion may be setting up in the US/Global markets that traders may not be prepared for.  The current rally in the US stock market suggests a broader market rotation may take place.  This suggests a deeper reversion event may be setting up.

Last week I talked about the 3-year record high outflows in the GLD gold bullion ETF and how it’s warning us that investors are not fearful of falling stock prices. This along with the vix, and our custom index paint a clear contrarian signal that a top is near!

CONCLUDING THOUGHTS:

As we near the end of 2019, the current bullish price trend may come to a dramatic end as the VIX charts and our custom Index charts suggest the US/Global markets may have reached levels that support a price rotation/reversion event may be setting up.  Traders need to be prepared for the risks associated with such an event and plan for extended risks.

If you find this type of analysis interesting be sure to video my website to learn more about how you take full advantage of this analysis every week at www.TheTechnicalTraders.com

Chris Vermeulen
Technical Traders Ltd.

What happens To The Global Economy If Oil Collapses – Part 3

This, the final section of this multi-part research article, will continue our exploration of the consequences that may result from our ADL predictive modeling system’s suggestion that Oil may continue to fall to levels below $40 over the next few months.

In Part I and Part II, we’ve highlighted what we believe to be very compelling evidence that any continue oil price decline from current levels may be setting up the global markets for a massively volatile price reversion – similar to what happened in 1929.

Prior to the stock market collapse in 1929 and the start of the Great Depression, commodity prices collapsed in 1921 and again in 1930.  This commodity price collapse was the result of over-supply and a dramatic change in investor mentality.  The shift away from tangible items and real successful investing/manufacturing and towards speculation in the housing markets and stock market.

Today, we want to focus on some of the core elements of our current global economic structure to attempt to present any more compelling evidence of a commodity collapse event that may happen after the past 7+ years of a massive credit market expansion event.  Allow us to briefly cover the events of the past 20 years.

You can get my daily market analysis articles and trade ideas by opting into my free market trend signals newsletter.

1999: the DOT COM bubble burst after a mild recession in 1993-94 and a stock market rally from 1996 to 1999

September 11, 2001: Terrorist Attack on US soil.  Shocked the world and global stock markets.  Sent the world’s economy into severe contraction. US Fed lowered interest rates from 6.25% to 1.0% from 2001 to 2003.

2004-06: US Fed begins raising rates from 1.0% and gradually increased rates to 5.25% in August 2006: +525%.  Pushing the US credit market, and housing market, over the edge and starting the 2008 Credit Crisis.

2007-2008: US Fed lowered interest rates to near ZERO over a very short 16-month span of time as the US Credit Crisis event unfolded.

2009-15: US Fed continued to keep interest rates near zero throughout this time-frame and continued to pump capital in the global capital markets with multiple QE and debt buying events.  Other global central banks followed the US lead providing additional capital throughout the global markets.  This massive expansion of credit/debt over a 7+ year span of time allowed foreign nations to “binge” on cheap US and Euro credit/debt while an Emerging Market and Foreign Market recovery were taking place.

2016-2019: US Fed raised interest rates from 0.08% to 2.42% over this span of time. Pushing US Fed rates up by the highest percentage levels EVER: +3025%

This continued global cycle of “boom and bust” has wreaked havoc on global consumers and business enterprises.  Over the past 20+ years, various cycles of economic appreciation and depreciation have left some people considerably better suited to deal with these cycles while others have been completely destroyed by these events.  Now, it appears we are entering another period of “early warning” as global manufacturing activity, growth and economic output appears to be waning. Are we entering another period like the 1929 to 1940 period of the US where a global economic contraction resulted in a deeper economic recession/depression and took 15+ years to recover from?

The US Fed has recently started acquiring assets again – at a far greater rate than at any time since 2012.  It is very likely that the US Fed is “front-running” a crisis event that is already starting to unravel again – possibly aligned with institutional banking entities and global credit/debt risks.

Chinese factory orders have continued to fall recently and the news is starting to trickle out of China that the US trade tariffs have done far greater damage than currently expected.  This suggests that manufacturing, exports, and GDP for China have entered a massive decline.  What happens next is that commodity prices collapse because of the lack of demand from manufacturers and consumers. (Source: https://www.yahoo.com/finance/)

Chinese new loan origination rates have fallen to a 22 month “new low” – which suggests corporate and consumer borrowers are simply not willing to take on any new debt/credit at the moment.  This happens when a population decides they want to “disconnect” from any economic risks and shift towards a “protectionist” process. (Source: https://finance.yahoo.com)

Recent news suggests that Chinese demand for European consumer and luxury goods has also contracted dramatically.  Germany will release GDP estimates on November 14th.  It is our opinion that the Chinese have already shifted into a more protectionist consumer stance and that would mean that demand for non-essential items (call them high-risk purchases) are very low at this time.  If this is the case, the lack of true demand origination out of China/Asia could push much of Europe into a recession. (Source: https://www.yahoo.com/)

The last thing China would want right now is to blow the potential for any type of US/China trade deal – even if it means giving up more than they may have considered many months ago.  More tariffs or any type of tit-for-tat retaliatory trade war would not be in the best interest of either party at this stage of the game. Who flinches first? The US, or China, or the rest of the world?

So, the question, again, becomes..  “will a commodity collapse lead the global stock market into a prolonged period of price decline and/or a global recession over the next 10+ years?”

If so, can we expect commodities to collapse as they did after the 1929 stock market peak?

You may remember this chart from the earlier sections of this multi-part article.  It highlights what happened leading up to the 1929 stock market crash and how early warning signs of manufacturing and agriculture weakness continued to plague the markets while speculation in housing and the stock market pushed certain asset values much higher near the end of the “Roaring 20s”.

Are we setting up for the same type of event right now where global trade, manufacturing, and agriculture are weakening after the 2008 Credit Crisis and we are meandering towards a repetition of the events that led to the “Great Depression”?  Will commodities prices collapse to 2002 or 2003 levels for most items?  Will Oil collapse to levels below $30 ppb over the next 6 to 12+ months?  And what will happen to Gold and Silver throughout this time?

Can we navigate through these troubling events without risking some type of new collapse event or reversion event?  Are the central banks prepared for this?  Are traders/investors prepared for this?  Just how close are we to the start of this type of event?

The answers lie in what we do now and how the commodities react over the next 12+ months.  The one major difference between now and 1929 is that the world is far more inter-connected economically and there are more people throughout the world that have moved into the “economic class”. Thus, it is our opinion that any event that is likely to happen will be followed by a moderately strong recovery event – no matter how severe the outcome. The world is in a different place right now compared to 1929.  Overall, only time will tell if our research and ADL predictive modeling system is accurate with respect to future oil prices.

We believe it is critical for all traders to understand what lies ahead and the risks involved in “playing dumb” about the current market environment.  We recently authored an article titled “Welcome to the Zombie-land for investors” and highly suggest you read it. Our researchers will share this one component that should help to ease some of the stress you may be feeling right now – the most capable, secure, mature and best-funded (reserves) economies on the planet will likely lead any recovery process should an event as this happen.  Therefore, look for strengths in the most mature and capable economies on the planet if some new crisis event begins.

Even if a trade deal between the US and China were to happen today and eliminate all trade tariffs, would this change anything or would this simply pour fuel onto the “capital shift” fire that is already taking place with speculation reaching frothy levels?

If you want to earn 34%-50% a year return on your trading account with very few ETF trades then join me at the Wealth Building Newsletter today!

Chris Vermeulen
www.TheTechnicalTraders.com

What happens To The Global Economy If Oil Collapses Below $40 – Part I

Currently, commodity prices are the cheapest they’ve been in over 40 years compared to equity prices.  US Equities have continued to rise over the past 7+ years due to a number of external processes.  QE1, 2, 3, and Fed Debt Purchases Share Buy-Backs and creative credit facilities.  Only recently have investors really started to pile into the US stock market (see charts below). Global investors were very cautious throughout the rally from 2011 to 2016.  In fact, the amount of capital invested within the US money market accounts was relatively flat throughout that entire time.

It was only after the 2016 US presidential election that investors really began to have confidence in the global economy and started piling into the US stock market and money market accounts.  This was also after the time that Oil began to collapse (2014~16) as well as the deflation of Emerging Markets rallies.  With all this new money having entered the global markets and equities being extremely overbought currently, what would happen is Oil collapsed below $40 and the global economic outlook soured headed into the 2020 US presidential election?

On July 10, 2019, we authored a research article using our ADL predictive modeling for Oil.  At that time, we predicted Oil would fall in August, recover in September and October, then collapse to near $42 (or lower) in November and December.  You can read our followup to this article here.

Currently, Oil has followed our ADL predictive modeling relatively closely over the past few months.  Although the attack in Saudi Arabia sent prices skyrocketing in mid-September, Crude price has generally stayed within our expected ranges and has recently settled near $55.  If you notice the two GREEN BARS on the chart, above, September and October price expectations suggested price settling near $54 and 59 throughout those two months.  Now, with November upon us, the ADL predictive modeling system is suggesting Oil prices will collapse from levels near $58 to levels near $40 – a massive 31% price collapse.  In reality, the price could fall below on a deeper price decline event.

This Crude Oil chart highlights what we believe may happen in Oil over the next few weeks and months – where price may collapse below $40.  Yet, we started asking another question..  What happens to the global economy if Oil prices collapse below $40 before the end of 2019?  What happens to the nations that depend on exported Oil income and to central bank functions within the economy?

When we start to understand the correlation between the price of Oil and the expectations throughout the global market, we must immediately focus on the income expectations of nations that rely on oil as the main source of income.  If our ADL predictions are correct, Oil will begin to plunge to levels near $40 (possibly below $40) over the next 3~4 months.  How will foreign nations react to this loss of income and who are the most dependent nations on Oil revenues.

Oil-producing nations vary in scale across the world, yet the United States, Saudi Arabia and Russia are the largest producers.  Nations that are the most dependent on Oil revenues are some of the smaller, less mature economies of the world.  Should the supply of oil stay relatively consistent across the globe while an extended economic contraction continues, we must begin to question the sustainability of various nations in terms of oil revenues.

For many of these nations, the income from Oil exports make up more than 15% of their annual GDP – in some cases, with Brunei, Kuwait, Libya, the Republic of Congo, Saudi Arabia and Singapore, oil revenues make up more than 30% of GDP.  How would a dramatic decrease in oil prices act as an economic destabilization event for these nations? Could they survive the event?

If the price of oil were to fall to $40 from current levels (near $67), this would represent a 40%+ price decline.  Oil revenues for all nations would likely collapse by similar amounts.  Nations that are most dependent on oil revenues would be hardest hit and this decrease in national revenue would likely increase strains on future operations, debt/credit as well as potentially create massive social unrest and strife.

If our ADL predictive modeling system is accurate and oil prices collapse to near $40, the economic, social and future strains this creates for many nations become even more severe – at a time when an economic contraction is taking place.  This type of commodity price collapse could lead the world into a chaotic economic mess if it is prolonged.

In Part II of this article, we’ll explore the ramifications of this potential oil price collapse across the global stock market and other factors that may be setting up to drive a period of uncertainty and volatility within the global markets.

Opportunities are all around us.  Using the right tools to identify the true technical cycles, price cycles, and trading setup can help to eliminate risks and hone into more profitable trades.  It is almost impossible to time market tops and bottoms accurately, yet, as you can see from our work above, we have tools that can help us see into the future and help to predict when major price peaks and valleys should form.  Using a tool like this to help you determine when the real opportunity exists and when to time your trades will only improve your market insights and trading results….

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

Welcome To The Zombie-Land Of Investing – Part 1

This current market environment is very reminiscent of the 2006-08 market environment where price rotated into weakness on technicals and continued to establish new all-time price highs in the process – creating what we are calling a “zombie-land melt-up”.  This very dangerous price action is indicative of money chasing a falling trend.  Where technicals and fundamentals are suggesting that price is actually weakening quite substantial, yet the process of price exploration is continually biased towards the upside as investors continue to pile onto the back of the beast expecting a further melt-up.

Let’s take a look at what happened to the ES and Gold in 2006 and 2007. But, wait before you continue reading make sure to opt-in to our free market trend signals newsletter.

SP500 WEEKLY INDEX CHART IN 2006-2007

First, we’ll start with the ES (S&P 500 E-mini futures contract).  Pay attention to the MAGENTA arcs we’ve drawn on this chart that highlight the continued new highs reached throughout 2006 and 2007.  Pay attention to the price rotation and volatility that started to happen near the absolute peak in July and October 2007 – just before the massive price collapse began.  Notice how the technical indicators had been suggesting that price was weakening quite extensively since the beginning of 2007 and more aggressively after July 2007.  Pay very close attention to the last peak on this chart and how a very deep price correction setup a new price high in a very tight FLAG formation just before the breakdown event.

PRICE OF GOLD WEEKLY CHART IN 2006-2007

This Gold chart from the same time period highlights how Gold anticipated the market weakness by rallying up to a level near $750 in May 2016 – then retraced nearly $200 before forming a lengthy price bottom/base.  Gold, acting as a safe-haven for investors, rallied almost 94% in the 24 months prior to this peak in 2006.  It rallied another 256% (at the ultimate peak) from the low point established in June 2006.  The process of this rally was an extended base/bottom in Gold between the base/bottom in 2006 and the renewed uptrend that started just before the end of 2007 (just before the markets started crashing).

COMPARE SP500 INDEX 2006-07 TO 2018-19

We believe the current uptrend in the US stock market is acting in a very similar price formation to what we’ve highlighted in the 2006-07 market “zombie-land melt-up”.  We believe that investors are piling into the US stock market when price weakness is clearly being illustrated by the technical and fundamental data.  We believe a capital shift has continued to pile money into the US stock market as foreign investors pile onto the backs of other investors seeking safety and security within a stronger US economy.

CONCLUDING THOUGHTS:

We believe the current Zombie-land market is anticipating a price roll-over event (reversion) and that technical and fundamental data supports this analysis.  We believe the credit/debt expansion of the past 8+ years has fueled a massive bubble that may result in a deep price correction if given the right circumstances and events.  We believe this upside price move in the US markets, which are setting up near the exact same time-frame as the 2008 price collapse, maybe a very stern warning for traders and investors – BE PREPARED.

In Part II of this research post, we’ll highlight the similarities setting up in the current market “Zombie-land” and what happened in 2006~2008.  The expansion of the credit market over the past 8+ years has been extensive throughout the globe.  The biggest difference this time is that risk may come from foreign markets vs. from within the US.

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

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

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

Chris Vermeulen
www.TheTechnicalTraders.com

Long-Term Predictive Software Suggests Volatility May Surge

Over the past few weeks and months, a number of key economic data has continued to rally the US major indexes towards new highs, hopes of a US/China trade deal, a continued shift of capital in the US markets for protection and safety, and moderately strong US economic indicators and an earning season that appears to be moderately strong for Q3 of 2019.  The interesting facet of this move higher is that it is happening while trading volume has diminished dramatically in the SPY.  The futures contracts, the ES, YM, and NQ, continue to show relatively strong volume activity though.

Additionally, the overnight Repo markets have risen to the attention of many skilled analysts.  The concern is that the continued US Fed support of the overnight Repo facility may be a band-aid attempt to support a gaping credit crisis that is brewing just outside of view.  We’ve been doing quite a bit of research over the past few weeks regarding this Repo market support by the US Fed and we believe there is more to it than many believe.  We believe certain institutional banking firms may be at extreme risks related to derivative investments, shadow banking activities and/or global commodity/stock/currency/asset risk exposure.  The only answer we have for the extended Repo facility at increasing levels is that the institutional banking system is starting to “fray around the edges”.  Thus, we believe some larger credit risk problems may be just around the corner.

Our longer-term analysis continues to suggest that “all is fine – until it is not”.  Our belief that a capital shift that has been taking place over the past 5+ years where foreign capital continues to pour into the US markets is driving US stock market prices higher.  There is evidence that the capital shift into the US has slowed over the past 5+ months, yet one would not notice this by looking at these longer-term charts.  The point we are trying to make today is that price peaks near current highs have, historically, been met with strong resistance and collapsed by 8 to 15% on average.

SP500 INDEX – 2 MONTH LONG TERM CHART

This ES 2 Month chart highlights the resistance channel initiated near the 2003 lows (the lower YELLOW price channel line) and how that level has continued to act as moderate price resistance throughout most of 2017, 2018 and 2019.  We believe that price, at current levels, must either rally above this level and be capable of sustaining higher price levels (which would be supported by stronger forward guidance, earnings, economic data and/or investments), or will attempt to rotate lower from these current highs because price is simply unable to support/sustain higher price levels given the current global economic data.

When we attempt to rationalize the potential for price given the Repo issues, the current global economic data/news, the uncertainty of a US Presidential election cycle only 12 months away, the BREXIT deal hanging out in the near future and recent currency rotations, we believe is transitional shift is taking place in the markets in preparation for some type of surge in volatility associated with a very strong potential for extended price rotation.

NASDAQ 2 WEEK CHART – ADAPTIVE DYNAMIC LEARNING (ADL)

Our Adaptive Dynamic Learning (ADL) price modeling system on this NQ 2-Week chart highlights what the ADL system suggests as a moderate price rotation setting up over the next 2 to 8+ weeks.  This data originates on August 5, 2019, and the alignment of the future predicted price levels (the DASHES) on this chart shows how accurate the ADL future price predictions have been over the past 3+ months.  Currently, the ADL predictive modeling system is suggesting a price reversion is about to take place in the NQ where price may fall 10 to 15% over the next 2 to 6+ weeks.  Then, the price will attempt to set up a momentum base and begin to move higher near the end of 2019 or early into 2020.

DOW 2 WEEK CHART – ADAPTIVE DYNAMIC LEARNING (ADL)

This YM 2-Week chart showing the same type of ADL predicted price levels suggests the YM may also see some type of price reversion, yet the size of this reversion is much smaller than the NQ.  The ADL predictive modeling system is suggesting the YM may rotate to levels near 26,000 or lower before finding immediate support and attempting a renewed rally back to levels near 27,000.

CONCLUDING THOUGHTS:

What this suggests is that the NASDAQ and S&P500 may become much more volatile than the Dow Jones index over the next 2 to 6+ weeks.  Volatility may surge on a reversion move in the ES and NQ over the next few months while the YM remains rather calm comparatively.  Skilled traders must understand that subtle risks are starting to show throughout the global markets.  Foreign markets are starting to show signs of extended contraction – China and Asia in particular.  The situation in Europe and with the Euro are open to interpretation.  Our opinion is that risk levels have already exceeded a comfort level in this arena.

Should some event take place where the global banking system and/or Repo market continue to attempt to take up the slack – traders will become even more concerned that “something is broken” and could pull massive amounts of capital out of the markets fairly quickly.  If this happens when volume and volatility are very low, we have a situation where simple price exploration could present a real problem (think FLASH CRASH).

Skilled traders need to stay very cautious near these new highs.  We may see a surge in volatility over the next few weeks unless the markets are able to settle the concerns raised by analysts and others.  Headed into the end of 2019, into a contentious US presidential election cycle and with obvious signs that something may be breaking in the global banking system, now is the time to protect and prepare for the unknown.  We can’t make this any clearer – consider this a warning alert from www.TheTechnicalTraders.com.

Nominal New Highs Reached, Skilled Traders Should Still Be Cautious

The US Stock market rallied on Friday, October 25, on TESLA earnings crushing expectations as well as news that any positive US trade deal outcomes could see almost immediate removal of future tariffs that are scheduled to be implemented near the end of October.  This was enough for the markets to rally from the start of trading and continue to push higher until near Noon in NY.  After new highs were reached, the markets contracted a bit headed into the close.

Gold shot up early this morning before the news related to the US trade deal hit.  Our opinion is that this is a natural advancement in precious metals that is not new related or muted by some external factors.  Precious metals have been setting up a sideways FLAG formation for over 2 months and we believe the apex/breakout move is near.

Oil was somewhat flat to close out the week and closed trading near $56.63.  The past three days we have seen oil rise from the $53 level to the current price levels, but we believe oil is still fundamentally oversupplied and that price will continue to weaken over time.

The real question before all of us right now is will this new nominal high represent a new breakout bullish price trend heading into a US Presidential Election cycle, or is this more price rotation within a defined price range?

If you consider all the shifting aspects of the US political and economic landscape as well as the current geopolitical and economic factors, we believe any real breakout move will come as we get closer to November 2020 – not now.  We believe this is still price rotation and we believe the NQ is the likely cause of this new nominal price high on Friday.  Tesla crushed earnings and that set a positive tone for Friday’s trading.

TRANSPORTATION INDEX DAILY CHART

The TRAN, Transportation Index, is still trading near current resistance and has not shown any true new price high yet.  It will be interesting to see how the markets open up early next week and what news may drive a new price trend by then.

MID-CAP SECTOR DAILY CHART

The Mid-Cap has failed to rally to recent price highs which suggest this is not a broad market rally.  We would want to see more defined price advancement across all sectors and above recent price highs to call this a broad market rally/breakout

Pay attention to the new that originates this weekend.  We don’t believe a deal will be reached with regards to trade as quickly as some others may believe and we still believe the next 12+ months of the US Presidential election cycle will be full of surprises.  We may start to get more clarity of a true price trend after the New Year (2020).  Until then, we’re staying cautious of these price rotations and picking our trades.

I urge you visit my 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 markets and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver 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. 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. PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime

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

The Divergence of Gold And Bitcoin – Which Represents A True Safe-Haven?

Recently, Mark Zuckerberg appeared before the US Congress to discuss his new Libra project and to attempt to calm concerns related to his new global alternate currency project.  It appears this project is putting global political leaders in a particularly powerful position of either accepting the Libra project as a viable future solution and implementing new laws and regulations in support of it or to shelve the idea while they consider the local and global risks associated with a project that creates a new class of global currency. (Source: https://www.bloomberg.com)

We believe the risks associated with a massive corporate and international backed Crypto/Alternate currency are far too great, at this time, for the US government to attempt to consider with only 12+ months to go before the US Presidential elections.  This is almost like opening Pandora’s Box in terms of total global risks and outcomes.  It becomes almost impossible for the US government, Federal Reserve or any other global central bank to be able to protect its citizens from the risks associated with any type of technology collapse, fraud, hacking or any other unknown risks associated with such an idea.

The concept of a “Safe-Haven” may come into question over the next 10+ months as investors continue to question what may happen in the global markets, global political events and asset valuations related to Cryptos, Precious Metals, and foreign currencies.  Our researchers believe mature economy currencies will quickly become new currency Safe-Havens for global investors over the next 10+ months as banking, credit and economic risks continue to shake out weaker markets.

Cryptos may see some support as price rotates over the next 10+ months prior to the US Presidential elections, yet we believe the real global asset markets (stocks, currencies, debt/credit, and bonds) will take center stage as the world transitions through a very tumultuous period prior to the November 2020 US elections.  Even for a period of time shortly after the US elections, global assets will continue to reposition as future economic and regional asset value expectations shift.

There is a very real potential that global investors continue to seek safety and liquidity in the global major markets, economies and global currencies.  Additionally, Precious Metals continue to show very little signs of weakening over the past 12+ months.

In fact, Precious Metals have continued to stay much stronger than many other investments over the past few years.  Gold is up +17.60% from October 2017.  Palladium is up 78.81% since October 2017. Silver is up 4.9% over that same period of time.  Once the next upside price leg begins in Precious Metals, we may see a massive price increase in Gold and Silver.  Supply issues continue to push Palladium prices higher as well.

Imagine being able to trade the precious metals sector easily with little downside risk and only being involved during the rallies and not the selloffs, all while generating 2x the return that GDXJ has return in 2019. Take a look at this trading strategy here.

Gold is setting up in a manner that is very similar to what happened in April 2019 – a sideways momentum base pattern that eventually broke to the upside in early June 2019.  Once that move higher began to take place, the continued move to the upside was very quick and extensive.  We believe the next upside move in Gold and Silver will be very similar – a moderately slow rotation out of the momentum base, then a fast acceleration to the upside as global investors realize the shift to safety has begun again.

We believe Cryptos may be left on the sidelines as investors prefer more traditional assets as a measure of safety as global concerns continue to weigh on investor’s minds headed into a very contentious US presidential election.  Currencies, Metals, Mature global market assets and true value stocks may become the investment of choice until we see some real clarity for the future from the global markets, global central banks, and global political leaders.

I urge you visit my 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 markets and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver 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. 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. PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime

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

What’s Coming in Q4 – Adam (Fundamentalist) & Chris (Chartist) Explain

Recently I met an incredible trader and x-Bloomberg television anchor. His name is Adam Johnson and if you have not listened to his podcasts or followed his stock trading portfolio be sure to visit his website BullsEyeBrief.com

Adam reached out to me a few weeks ago wanting to have me on his podcast show to talk markets because he focuses on individual stocks and their fundamentals, while I am a pure chartist that dissects price charts layer by later to find out what they are telling us will happen next.

Listen to this fantastic show Adam put together!


If you would like to receive my daily market analysis and forecasts along with my ETF trade alerts subscribe here.

Chris Vermeulen
Technical Traders Ltd.

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

US Major Indexes Retest Critical Price Channel Resistance

News, again, drives the US stock market and major indexes higher as optimism of a US/China trade agreement floods the news wires.  As we’ve been suggesting, the global markets continue to be news-driven and are seeking any positive news related to easing trade tensions and capital markets.  We believe any US/China trade deal would be received as very positive news by the global capital markets – yet we understand the process of achieving the components of the “deal” would likely still be 6 to 24 months away.

Still, with the strength of the US economy and the potential that some deal could be reached before the end of 2019 setting positive expectations, the US stock market and major indexes rallied last Thursday and Friday (October 10 and 11).  As the long holiday weekend sets up with no trading on Monday, it will be interesting to see what is potentially resolved between President Trump and the Chinese before the markets start to react on Sunday and Monday nights. Make sure up opt-in to our free market trend signals newsletter.

Our research team wanted to highlight some very key elements related to technical price theory and technical analysis.  These weekly charts highlight what we believe is “key resistance” in the US major indexes and share our research team’s concern that the markets may be reacting to news more than relying on fundamental economic and earnings valuations.  In past articles, we’ve highlighted how a “capital shift” is continuing to take place where foreign capital is actively seeking safety and security for future returns.  This leads to a shift in how capital is being deployed throughout the globe.

The current price channels in these Weekly charts highlight two key facets of the current market setup.  Either the US stock market will attempt to rally above this lower yellow price channel and attempt to regain strength between the two yellow price channels, or it will fail near the current price level and attempt to identify new support somewhere below the current price rotation ranges.

Just a few days ago, we posted this research article to alert traders of the Pennant/Flag formation that is setting up in the US markets …

October 7, 2019: US STOCK MARKETS TRADE SIDEWAYS – WAITING ON NEWS/GUIDANCE

NASDAQ WEEKLY CHART

With the holiday weekend upon us, we believe the news and economic data will continue to drive the market’s future moves and that volatility will continue to increase.

This Weekly ES chart highlights a similar setup, yet one key fact must be understood.  Price has already fallen away from the lower YELLOW price channel level and established a “lower high” price rotation recently.  Any price rally failure near this level may prompt a very big downside move.  The price must continue to rally above 3100 is price makes any attempt at further gains.

CONCLUDING THOUGHTS:

We believe skilled technical traders have already digested and are well aware of the risks that are present in the current market environment.  We’ve been urging our followers to stay mostly in cash and to consider very strategic, expertly timed, investments when price trends are relatively secure.

This is not a speculative market any longer – this is a very volatile and uncertain market that is currently resting as major resistance levels.  Don’t get overly aggressive at this point.  It is better for the markets to tell us what it wants to do.  Lower risk, lower chance of disaster and live to trade another day – these should be hammered into the heads of traders at this stage of 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 ever made for your trading.

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.

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. My simple technical trading strategy using ETFs will allow you to follow the markets closely and trade with it so you never get caught on the wrong side of the market with big losses.

Chris Vermeulen
Subscribe Today – www.TheTechnicalTraders.com

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