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Silver Traders Big Trend Analysis – Part 2

This, the second part of our Silver research article suggesting Silver may be forming a massive price base in preparation for an explosive upside move, will continue from Part I of this research series.

Our research team believes Silver is setting up in a price pattern that may already be “ripe” for an explosive upside move.  Our researchers have poured over the data and believe the disparity between Gold and Silver is already at excessive levels.

Historically, anytime the disparity between Gold prices and Silver prices (rationalized into comparative Gold price levels) breaches 30% to 60% and Gold begins an upside price advance, Silver typically begins to move higher with 4 to 8+ months.  This setup pushes the Gold to Silver ratio back below 50 or 60 as Silver rallies substantially higher, and faster than the price of Gold.

Comparatively, Silver continues to trade within a sideways price range after basing in early 2016.  This price range has been fairly consistent between $14.50 and $21.0.  With Gold recently starting to move higher because of the US/Iran military conflict, this raises an early warning flag for our research team because Silver has continued to trade below $18 – and well below recent highs near $20.

The price disparity between Gold and Silver is currently greater than 200% based on our proprietary modeling system.  Remember, anytime this disparity level is greater than 30% to 60% and Gold breaks out in a rally, Silver will break to the upside within just a few months.

The second stage rally in Silver, the real money-maker, will come when investors pile into Silver and Silver Miners as the breakout in Silver becomes explosive.  The time to get into this trade is/was now or 4 months ago.  Still, there is plenty of opportunity for skilled traders right now because the breakout move in Silver and Silver Miners has not really begun yet.

The first big upside move in Silver and Miners will be to attempt to move higher and target recent resistance.  Resistance in Silver is currently near $19.70 and $21.00.  This means any move above $19.75 (or higher) where the price of Silver fails to move above $22 or $23 would constitute a “Stage 1 Base Advancement”.

After this move is complete, a “Breakout Stage” price move will take place.  This may be where Silver prices advance from the $21 to $23 level up towards the $28 to $32 price level.  This upside price advance breaches the Stage 1 resistance and attempts to establish new support for a continued Stage 2 advance.

Remember, the current disparity level is just over 200% between Gold and Silver.  If Gold continues to rally higher and Silver attempts to break higher, attempting to narrow the disparity level, then Silver will (at some point) enter a near parabolic upside price move above $36 to $40.  Our researchers believe this may happen before June or July 2020.

This incredible opportunity is currently setting up for skilled traders.  Believe it or not, while Silver continues to trade below $18 per ounce and global investors are focusing on US stocks, Emerging Markets, and Gold, Palladium and others, this setup in Silver may become the biggest investment opportunity of 2020.  Sure, Gold may rally 80% to 140% over the next 12 to 24 months.  Palladium may rally even higher.  If Silver does what we expect it to do once this setup/trigger really breaks open, Silver could rally 500%+ over 12 to 24+ months on an incredible upside disparity reversion move.

This last chart highlights why we believe this setup in Silver should not be ignored.  In 2005, the rally in Silver as a result of this Disparity trigger resulted in Silver reaching a 38% higher peak than Gold.  In 2009, the same Disparity trigger prompted Silver to rally to levels nearly 300% higher than the peak in Gold prices.  If Gold rallies to levels above $2800 to $3100, which is our expectation, and this Disparity trigger prompts an upside move in Silver, we believe Silver could rally to levels 200% to 400% (or more) higher than Gold prices.  By our estimates, that would put Silver prices above $90 to $95 per ounce – possibly much higher.

Take advantage of any opportunity you have to position your portfolio for this setup and be patient.  The upside breakout in Silver happens like a train leaving the station.  Slow and steady at first, then building momentum, then finally running at top speed.  Each time this Disparity trigger sets up and executes, Silver starts a moderate move higher at first, then explodes to the upside as Gold continues to rally higher.  That last explosive move is why Silver reaches peaks that are substantially higher (in percentage terms) than the peaks in Gold.

Please pay attention to our research team’s efforts to help you create greater success and find great trades.  Take a minute to visit Technical Traders Ltd. to learn how we can assist you in 2020 and help you build wealth, attain greater success and stay ahead of these bigger market moves.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

Join my Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

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

Commitment Of Traders (COT) Data Suggests Gold In Rally Mode

Many people believe the price of Gold will need to fall to support Institutional short positions.  We don’t believe this is the case.  The Commitment Of Traders (COT) Data suggests Commercial Hedgers have a large and growing shot position that is a very positive sign for a continued rally in Gold and Miners looking forward months from now.

Don’t think about COT data like everyone else with it comes to gold.

Over the past 20+ years, every time the COT Commercial Hedgers position in Gold falls, weakens substantially, or makes new multi-year lows the price of gold rallies.

WHY RECORD COMMERCIAL SHORT HEDGE POSITION IS BULLISH

It is my belief that the markets will move in favor of where the big money (commercial/institutions) want it to go in most cases. so if the commercial’s keep adding a short hedge position that means they are adding to heir long exposure and need to add more of a hedge to help protect their growing LONG position.

The weakening COT data from 2001 through 2012 is a perfect example.  As Commercial Hedgers moved away from Gold, the price of gold rallied to the all-time highs.

Additionally, after the major bottom in Gold in 2016, Commercial traders would have bought and accumulated gold driving the price higher.

Now, in late 2018 and throughout all of 2019, the Commercial Hedger COT position in Gold has fallen to the lowest level in the past 20+ years. This suggests the rally in Gold has really just begun to accelerate to the upside and there are more people buying gold than ever before who are buying protection (hedging)

The COT data I find very deceiving because it’s displayed and delayed in a way that makes traders and investors think the opposite.

Wall Street is in the business of making a market, and that means they play a game of deception so you do the opposite of what they are doing. Wall Street show As you watch gold moving with your new view on the COT data, you will notice gold will rally and post strong moves, then a couple of weeks later the COT data comes out.

With all that said, this is just my view and opinion of how I read the COT data for gold specifically. As with every chart and trader, there are many different ways things can be analyzed and viewed.

Since the price just had a strong advance, and you now see the commercials have added to their short position you naturally expect a pullback after a price rally especially when you see the big players adding to their short/hedge position. But what really just happened? the big players bought gold, and they had to hedge some of their new position. Very bullish in my opinion. While I do not use it for trading, it is a good confirming indicator of a trend.

Our research team, as well as our proprietary price modeling systems, suggested that Gold may rally to levels above $3700 before reaching an ultimate peak.  Currently, our predictive modeling systems are suggesting the next target is well above $1600 and we believe our original target from our October 2018 analysis, of $1700 to $1750, is still very valid.

We believe this current upside price rally in Gold will attempt to clear the previous high levels near $1924 – from September 2011.  We believe moderate resistance/rotation near $1700 to $1750 will be the last level of price resistance before a continued rally will push Gold prices above the $1924 peak – possibly stalling just below $2100.  Once price breaches the previous high level, we expect a short period of price rotation before another upside price acceleration takes Gold prices above $2400 to $2500.

Gold Miners are poised for an incredible upside price rally if our analysis of Gold is accurate.  GDXJ is currently trading near $42 – showing moderate weakness while Gold has seen some strength this week.  We believe Miners will do very well once Gold really breaks out above $1750 and begins to target the previous all-time high level.

Much like our expectations for Gold, we believe GDXJ will rally to levels near $60 once this current overbought condition wears off. Then we expect it to head towards $60 and rotate lower for a few weeks before attempting to rally further to levels above $70+.

Take a minute to review some of our recent Gold research posts to gain further insight

January 2, 2020: ADL GOLD PREDICTION CONFIRMS TARGETS

December 30, 2019: METALS & MINERS PREPARE FOR AN EARLY 2020 LIFTOFF

December 4, 2019: 7 YEAR CYCLES CAN BE POWERFUL AND GOLD JUST STARTED ONE

You won’t want to miss this incredible run in Precious Metals and Miners.  Follow our research.  Learn how we can help you find and execute better trades.  We’ve been warning all of our followers of this move for months – now it is about to get very real. In fact, we are giving away free silver and gold bullion bars to all new subscribers of our trading newsletter!

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

I urge you visit my Wealth Building Newsletter and if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

Is The Energy Sector Setting Up Another Great Entry?

Another wild week for oil traders with missiles flying and huge overnight price swings in crude. As we recently pointed out within our current Oil research article, Oil and the Energy sector may be setting up for another great trade.  We recently commented on how the supply/demand situation for oil has changed over the past 20+ years.

With US oil production near highs and a shift taking place toward electric and hybrid vehicles, the US and global demand for oil has fallen in recent years.  By our estimates, the two biggest factors keeping oil prices below $75 ppb are the shift by consumers across the globe to move towards more energy-efficient vehicles and the massive new supply capabilities within the US.

Our researchers believe the downside price rotation in Crude Oil early this week, after the US missile attack in Iraq, suggests that global traders are just not as fearful of a disruption in oil supply as a result of any new military actions in Iraq, Iraq or anywhere near the Middle East.  If there was any real concern, then the price of Crude Oil would have spiked recently.

We talk more about what we expect with oil both the bullish and bearish outlooks in this recently recorded conversation with HoweStreet.

INVERSE ENERGY ETF ERY DAILY CHART

This leads us to believe the inverse Energy ETF, ERY, maybe setting up a very nice bottom in price below $40.  Ultimately, we believe a deeper price bottom may set up in the next 10 days where ERY may trade below the $36~37 range, but time will tell if we are correct about this or not.

Historically, price levels below $40 have resulted in some very nice long trade setups in ERY.  This ERY Daily chart highlights the Support Channel we believe exists in ERY and why we believe any entry-level below $36 is an outstanding entry point for any future upside price move.

WEEKLY ERY CHART

This Weekly ERY chart highlights the past rallies that have originated from within the Support Channel.  Pay special attention to the size and scope of these moves.  The October 2018 rally resulted in a 183% price rally.  The April 2019 rally resulted in a 57% price rally.  The July 2019 rally resulted in a 50% price rally and the last move in September 2019 resulted in a 41% price rally.

Could this next setup in ERY be preparing for another 40% to 60%+ upside price rally?

We believe the setup in ERY is very close to generating an entry trigger.  We have not issued any new trade triggers for our members-only service as we are waiting for confirmation of a potentially deeper price move in ERY.  Right now, get ready for what may become a very good setup in ERY over the next few weeks.

Watch what happens in the energy sector over the next 30 to 60 days.  We may be setting up for a fairly large price rotation as the tensions spill over into the global markets and precious metals.  We may find that Oil is the big loser over the next 60+ days.

Profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts. Visit our website to learn how you can see what this research is telling us.

SUBSCRIBE TO MY TRADE ALERTS AND 
GET YOUR FREE BULLION!

Chris Vermeulen
www.TheTechnicalTraders.com

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

Middle East Trouble Renews Interest in Gold

Last time oil peaked, it dropped nearly 20% soon afterward!


Profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts. Visit our website to learn how you can see what this research is telling us.

I am going to give away and ship out silver and gold 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:

1oz Silver Round FREE 1-Year Subscription 
1/2 Gram Gold Bar FREE 2-Year Subscription

SUBSCRIBE TO MY TRADE ALERTS AND 
GET YOUR FREE BULLION!

Chris Vermeulen
www.TheTechnicalTraders.com

The Battle Between Safe Havens And Risk On Continues

With all the fear around the world, it is fascinating to watch the battle that is underway between risk-on and risk-off assets. Chris Vermeulen joins Cory Fleck to share the way he is trading these markets and what he thinks will cause a breakout in either risk-on or risk-off.

Profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts. Visit our website to learn how you can see what this research is telling us.

I am going to give away and ship out silver and gold 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:

1oz Silver Round FREE 1-Year Subscription 
1/2 Gram Gold Bar FREE 2-Year Subscription

SUBSCRIBE TO MY TRADE ALERTS AND 
GET YOUR FREE BULLION!
Free Shipping!

Chris Vermeulen
www.TheTechnicalTraders.com

Crude Oil Reverses Lower Again After US Missile Attack

Normally, after tensions between Iran/Iraq and the US flare-up, Oil and Gold rally quite extensively but reversed sharply lower by the end of the session.

Yes, Gold is 1% higher today and was up over $35 overnight, but Crude Oil has actually moved lower today which is a fairly strong indication that disruptions in oil supply from the Middle East are not as concerning as they were 10+ years ago. Traders and investors don’t believe this isolated targeted missile attack will result in any extended aggression between the US and Iran.

When past conflicts in the Middle East happened, Oil would typically rally and Gold would spike higher as well.  Consider this a reflex action to uncertain oil supply issues and concerns that global market uncertainty could crash the markets.  Gold seems like an easy expectation related to this type of uncertainty as it continues to act as a hedge against many risks like missiles/war, financial uncertainties etc…

In my pre-market video report to subscribers today (Monday, Jan 6th) I pointed out how the price of crude oil was testing a critical resistance area form the last time there were missiles fired. Today’s reversal is not a huge surprise and in fact, it looks like an exhaustion top.

Oil, on the other hand, has experienced one of the longer price declines in recent history, from the peak price near $147 near July 2008 to levels currently near $63.  But we saw a low price for oil below $30 (near February 2016).

CRUDE OIL DAILY CHART

I believe a technical resistance channel may be pushing Oil prices lower today as the price has continued to rotate lower after moving into this extended Resistance Channel.  It may be that global traders don’t believe this conflict with Iran will result in any type of massive oil supply disruption or risk for the global markets right away.  The Resistance Channel, between $63 and $65.50, has continued to act as a price ceiling over the past 7+ months.

CRUDE OIL WEEKLY CHART

Our proprietary Fibonacci Price Modeling system is highlighting similar levels near $64 and $50.  This price modeling system maps and tracks price rotation using a proprietary adaptive Fibonacci price theory model.  These levels, highlighted on this chart, represent immediate price target levels for any upside move (CYAN, already reached) and any downside move (BLUE, suggesting a move back towards $50 may be in the works).

If Oil is not capable of breaking above this Resistance Channel, then Fibonacci Price Theory would suggest price must turn lower and attempt to establish a new LOW PRICE level that is below recent low price levels.

If this Resistance Channel continues to act as a solid price ceiling, Crude Oil may turn lower over the first few quarters of 2020 and attempt to target levels near or below $50 fairly soon.  Skilled traders should prepare for this type of move and identify opportunities for profits in the near future.

In fact, I also gave subscribers a head up that GDXJ and TLT were going to gap higher and likely be under pressure all session. Also, I showed how the SP500 was going to gap lower deep into oversold territory and likely rally strongly just like last Friday, all of these things happened perfectly today.

Pre-market GDXJ, SPY, TLT warning of price gaps into extreme territories beyond the small colored lines: Red (overbought level), and Green (oversold level)

PRE-MARKET CHART ANALYSIS

END OF DAY MARKET MOVEMENTS

My point is my team and I have a good pulse on the major markets and can profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts. Visit our website to learn how you can see what this research is telling us.

I am going to give away and ship out silver and gold 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:

1oz Silver Round FREE 1-Year Subscription 
1/2 Gram Gold Bar FREE 2-Year Subscription

SUBSCRIBE TO MY TRADE ALERTS AND 
GET YOUR FREE BULLION!
Free Shipping!

Chris Vermeulen
www.TheTechnicalTraders.com

NASDAQ Set to Fall 1000pts In Early 2020, and What it Means for Gold

One of our most interesting predictive modeling system is the Adaptive Dynamic Learning (ADL) price modeling system.  It is capable of learning from past price data, building price DNA chains and attempting to predict future price activity with a fairly high degree of accuracy.  The one thing we’ve learned about the ADL system is that when price mirrors the ADL predictive modeling over a period of time, then there is often a high probability that price will continue to mirror the ADL price predictions.

One of our more infamous ADL predictions was our October 2018 Gold ADL prediction chart (below).  This chart launched a number of very interesting discussions with industry professionals about predictive modeling and our capabilities regarding Adaptive Learning.  Eric Sprott, of Sprott Money, highlighted some of our analyses related to the ADL predictive modeling system in June and July 2019.  Our ADL predictive modeling system suggested a bottom would form in Gold near April/May 2019 and then Gold would rally up toward $1600 by September 2019, then rotate a bit lower near $1550 levels.

LISTEN TO WHAT ERIC SPROTT SAID ABOUT OUR ANALYSIS

OCTOBER 2018 GOLD FORECAST

CURRENT 2020 GOLD FORECAST

This next chart shows what really happened with Gold prices compared to the ADL predictions above.  It is really hard to argue that the ADL predictions from October 2018 were not DEAD ON accurate in terms of calling and predicting the future price move in Gold.  Will the ADL predictions for the NQ play out equally as accurate in predicting a downward price rotation of 1000pts or more?

CURRENT 2020 NASDAQ FORECAST

This NQ Weekly chart shares out ADL Predictive Modeling systems results originating on September 23, 2019.  The Price DNA markers for this analysis consist of 15 unique price bars suggesting the future resulting price expectations are highly probable outcomes (95% to 99.95%).  This analysis suggests the end of 2019 resulting in a broad market push higher in early 2020 may come to an immediate end with a downward price move of 800 to 1000+ pts before January 20~27, 2020.  The ADL predictive modeling system is suggesting price will be trading near 8000 by January 20th or so.

Only time will tell in regards to the future outcome of these ADL predictions, but given the current news of the US missile attack in Iraq and the uncertainty this presents, it would not surprise us to see the NQ fall below the 8000 level as this euphoric price rally rotates to find support before moving forward in developing a new price trend.

Pay attention to what happens early next week with regards to price and understand the 8000 level will likely be strong support unless something breaks the support in the markets over the next 30+ days.  Ultimate support near 7200 is also a possibility if a deeper downside move persists.

As we’ve been warning for many months, 2020 is going to be a fantastic year for skilled technical traders.  You won’t want to miss these opportunities in precious metals, stocks, ETFs and others.

We have a good pulse on the major markets and can profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts. Visit our website to learn how you can see what this research is telling us.

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:

1oz Silver Round FREE 1-Year Subscription 
1/2 Gram Gold Bar FREE 2-Year Subscription

SUBSCRIBE TO MY TRADE ALERTS AND 
GET YOUR FREE BULLION ROUNDS!
Free Shipping!

Chris Vermeulen

What Does The Global Stock Market Contraction After The Missile Strike Mean?

The US Stock Market contracted in early morning trading on Friday, January 3, by more than 1% after news of the missile attack in Baghdad targeting a top-level Iranian military General and others.  After the attack on the US Embassy in Iraq last week, President Trump issued a strong warning that the US would act to protect its people throughout the world and Iran scoffed at this message.  It would certainly appear President Trump means business and won’t hesitate to stop terrorists from acting against the US – no matter where they are in the world.

This news, overnight, pushed Oil, Gold, Silver and most precious metals higher.  The fear factor associated with the unknowns of what may come from these actions shot through the roof over the past 24 hours.  The global stock markets contracted by a fairly strong amount in Friday’s trading.  Most global markets were off by 0.75% to levels well over 1%.

GLOBAL MARKET SELLOFF AFTER MISSLE STRIKE – CANADA, BRAZIL, CHINA, UK…

The real question skilled technical traders must ask themselves is this “will this turn of events prompt a change in investor expectations/thinking over the next 12+ months”?

I can remember what happened in the markets and the US economy in 1991 when Desert Storm happened.  Because this was one of the first US military efforts that were televised almost 24/7, almost immediately people were suddenly distracted by these war images and videos.  They were entranced by the actions taking place half-way around the world.  Local economies slowed because of this change in consumer sentiment and certain businesses struggled as their customers stayed home and watched TV.

A similar type of event happened after 9/11.  The United States was in shock.  People still attempted to conduct life as normal, yet our objectives changed.  We lost a bit of that care-free American attitude that we had in place before the 9/11 event.  We were more solemn, more conservative, more reserved in our daily lives.  Could something like this happen if Iran (and neighbors) attempt to retaliate against the US for this missile attack?  Could this change the thinking of consumers and investors as concerns about re-engaging in a Middle East conflict arise?

US MARKET SOLD OFF ON MISSILE ATTACK

The US stock market contracted fairly strongly in early trading on Friday, January 3, 2020.  Yet, by afternoon trading, support had pushed most prices off the lows.  We authored a research article recently that suggested traders were very emotional near the end of 2019.  We believe these emotions could continue to haunt the markets in various ways over the next 10 to 25+ trading days.  One thing we are concerned with is a change in price trend sometime between January 13 and January 25.  We believe these dates could prompt a major change in price trend and direction in the near future.

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

We don’t have a confirmation, as of yet, that any major trend change is taking place – but we feel it would be unprofessional to not warn traders that an event like this could dramatically change the way traders view future expectations.  We really have to understand one key factor about investing and trading – trends are the results of investors/traders believing the future revenues and results of a company, stock or economy will product greater or weaker returns.  If investors believe the returns will be greater, then the trend tends to move higher.  If investors believe the returns will be weaker, then the trend tends to move lower.

EVENT COULD CHANGE EQUITIES MARKET OUTLOOK – DOW JONES INDEX

Could this new event change future expectations for traders and investors?  How will extended uncertainty or military engagement alter trader’s expectations over the next 12+ months?

Right now, we want to urge our followers to protect their open long positions and watch carefully as this event unfolds.  We don’t have any confirmation that a trend change is taking place.  If the YM price fell to levels below $28,000, then we would consider recent support near $28,350 breached and begin to take a look at other price modeling systems.

We suggest our followers read the following research post from the end of 2019.  This will give you a better understanding of what is really happening right now and what would be needed to push the markets into a new bearish trend in early 2020.

December 31, 2019: WHAT TO EXPECT IN EARLY 2020

As we warned throughout most of 2019, we believe 2020 will be an incredible year for traders with extended volatility and returns.  You really don’t want to miss these bigger price moves when they happen.  Our precious metals calls throughout all of 2019 were nearly perfect and our recent Gold calls have nailed this big move.  Get ready – 2020 is going to be a great year for skilled technical traders.

With over 55 years of technical trading experience, we have been through a few bull/bear market cycles, I have a good pulse on the market, timing key turning points and what to buy and sell for both short-term swing trading and long-term investment capital. The opportunities are financially life-changing if handled properly.

I urge you visit my Wealth Building Newsletter and if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
Founder of Technical Traders Ltd.

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

Who Said Traders and Investor are Emotional Right Now?

Nearing the end of 2019, our research team continues to attempt to dissect the market rally in an effort to present credible research and timely insights to skilled technical traders.  We recently authored a research article discussing the potential that the US Stock market is less than 2.5% away from a major resistance level that could prompt a massive market top.  You can read our research related to these Fibonacci Price Amplitude Arcs here.

This recent research leads us to revisit the recent blow-off rotation in recent markets.  The typical market cycle moves from through these cycles Stealth Phase, the Awareness Phase, the Mania Phase and finally to the Blow-Off Phase.  The Stealth Phase is where the smart money pours into the market taking advantage of undervalued assets/equities.  The Awareness phase is where more traditional and retail investors pile into assets that have formed traditional bottom formation and started to rally.  The Mania Phase is when enthusiasm and greed take over and when the market moves higher in a parabolic price mode – ultimately reaching a massive top.  Then, we start the Blow-Off Phase which usually starts with a deep “R” type price rotation – followed by extended selling.

Before you continue, take a couple of seconds and join our free trend signals email list here.


Source: Dr. Jean-Paul Rodrigue Dept. of Global Studies & Geography Hofstra University

We’ve seen these types of market phases play out over the past 20+ years multiple times.  The DOTCOM market breakdown, the 2009 Credit Market Crisis, and the 2017 BITCOIN breakdown.  One of the clearest examples in history was the 1929 Stock Market Crash.

The effort of our research team is to highlight the recent rally mode in the US stock market after the 2018 US Stock Market rotation (January 2018 and August 2018).  If you pay very close attention to the details of these actual price rotations in the examples below, you’ll notice that every ultimate peak happened after a period of moderately deep price rotation and an extended upside price rally (an exhaustion rally).  In every example, this rotation setup the exhaustion rally which ultimately set up the massive price peak/top.


Source: Dr. Jean-Paul Rodrigue Dept. of Global Studies & Geography Hofstra University
Cole Garner: https://medium.com/hackernoon/marketcycle-4e5407d0c68

We believe the rotation in the US stock market in 2018 exhibited the exact same price setup and the current upside price rally is the exhaustion rally that will ultimately set up a massive price peak/top.  We’ve highlighted our research team’s expectations in the S&P500 chart below.

The fact that this potential price peak aligns with our GREEN Fibonacci price amplitude arc presents another clear example that massive resistance exists near 3200 in the S&P.  The phases of the extended market rally, lasting just over 10 years now, align nearly perfectly with the previous examples of major market tops and a Blow-Off Phase.

Our research team believes the resistance level near 3200 on the S&P will likely result in a downside price rotation setting up an “R” type price move.  Once this completes, a Blow-Off phase could begin rather quickly.  We believe the expansion of the markets has reached a point well past a euphoric phase and the rotation in 2018 setup the perfect exhaustion rally phase.  We believe it is just a matter of time at this point before the Blow-Off phase begins.

We would be surprised if the S&P rallied far beyond the 3200 price level before setting up the “R” price rotation.  We believe the first 3 to 5 months of 2020 will create the “R” price setup before broader market concerns take hold – potentially bursting investor enthusiasm.

All this could be the start of the next real estate crash we explain here.

Don’t miss these next moves in the markets.  Our research goes beyond traditional types of analysis and our research team is dedicated to helping you protect your assets and wealth.

In short, rotations in ETFs, such as this potential move in WOOD, will continue to set up and rotate throughout the 2020 election event and beyond we’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter. Join us with the 1 or 2-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. Get a Free 1oz Silver Round or Gold Bar Shipped To You as a Bonus!

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
Founder of Technical Traders Ltd.
www.TheTechnicalTraders.com

Lumber is about to rally and how to play it with this ETF

WOOD, one of the Ishares ETF symbols related to the Real Estate and Construction sectors may become the next hottest instrument for skilled technical traders.  Over the past three years, Wood has rallied over 110% between a $40 to $84 range and the trading volume of WOOD has been relatively consistent near an average of about 140k shares per week.  Let’s dig into the opportunities that may present themselves over the next 6 to 12+ months in WOOD.

First, you can get more information about this iShares ETF here.

Second, the WOOD ETF is relatively closely correlated to the US Real Estate and Construction sectors. Thus, when economic data is announced that supports growing Real Estate and Construction activity, traders can easily translate that into forward expectations in price in the WOOD ETF.  For the purposed of this article, we’ll stick with a simple example of New Private Housing Unit Building Permits data from the St. Louis Federal Reserve.

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NEW HOUSING BUILDING PERMITS

As you can see from the chart below, since the bottom of the housing market crisis in 2009, an extended bottom to place between 2009 and 2011.  Early in 2012, the housing market began to uptick with an increase in housing permits.

This increase continued until a peak in 2015 rattled the markets (right before the 2016 Elections).  The post-2016 recovery and rotation in housing permits are very clear to see through the end of 2018 and we can see an uptick in new building permits in 2019 as the US Federal Reserve change focus fairly early in 2019 to reduce the Fed Funds Rate and ease economic concerns globally.

This uptick in the housing permit data presents a fairly clear picture that builders are expecting a moderate increase in activity over the next 12+ months related to new home sales, inventory, and activity.  How can you learn to profit from these trends?

WOOD WEEKLY PRICE CHART

This Weekly WOOD chart highlights the trends that correlate to the housing permit chart above.  Notice how the growth from 2013 to 2015 was more moderate compared to the growth between 2017 and 2018?  This reflects the investor sentiment related to real economic activity and expectations.

In the 2014/2015 period, housing prices were still recovering well, yet the US Fed was also starting to raise interest rates from extreme lows and the US was headed into a very contentious election cycle.

You can see how WOOD contracted in 2016 as rates crept higher and the US election took hold of the markets – causing uncertainty and fear in the consumer market.  This fear translated to a slowdown of activity and expectations in the housing market that reflected a price decline in WOOD in 2016.

The rally, after the November 2016 US presidential elections, clearly illustrates that investors and consumers believed the new US President would usher in an economic boom cycle – no matter what the US Fed did (for the most part).

Currently, WOOD has retraced from $84 to levels near $54.  The current uptick in housing permits suggests builders and construction are ramping up expecting a bump in housing activity over the next 12+ months.  It could be that builders are expecting the US Fed to continue easing or a more positive business/political climate for consumers and wages.  Either way, the uptick in building permits suggests forward expectations are positive at this time.  If WOOD breaks above the $67/68 level, a new price rally may continue towards the $76 level.

DAILY WOOD PRICE TARGET CHART

One of our favorite measures of price activity is the “100% Fibonacci Measured Move”.  This Fibonacci price theory suggests that price typically legs higher or lower in 100% (or near 100%) legs/moves.  By taking a look at a previous price advance/leg, we measure that move and apply that range to a recent pullback to determine where the next 100% Measured Move may target.

In this case, the $76.40 level becomes the new 100% Fibonacci Measure Move target if the upside breakout happens as we expect.  This represents a 15%+ upside price move potential for skilled technical traders.

If wood starts to collapse in price, it could be the start of the next real estate crash we explain here.

We’ve been warning our followers and members that 2019 and 2020 are going to be excellent environments for technical traders.  Price rotation, trends and volatility should continue throughout the next 12+ months and well past the 2020 US elections.

Following wood/lumber may be new to you and that’s great because its another angle to profit from an asset class, not many traders talk about. We will also go into more detail in a future article on how we use the wood to gold ratio to help predict stock market direction. This may sound strange but, but this ratio plays a powerful roll in knowing when the big and smart money is rotating into the risk on/off asset classes.

In fact, both WOOD and Gold have bullish price patterns and one of them will fail, the question is which one? A couple of days ago we posted our analysis about what is happening in gold right now.

In short, rotations in ETFs, such as this potential move in WOOD, will continue to set up and rotate throughout the 2020 election event and beyond we’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter. Join us with the 1 or 2-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. Get a Free 1oz Silver Round or Gold Bar Shipped To You as a Bonus!

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
Founder of Technical Traders Ltd.