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Revisiting “Black Monday – 1987” – October 19 – Part 1

Back in the day, for those of you that are old enough to remember and have experienced one of the most incredible trader psychology driven stock market decline in recent history.

The difference between “Black Monday” and most of the other recent stock market declines is that October 19, 1987, was driven by a true psychological panic, what we consider true price exploration, after an incredible price rally.

It is different than the DOT COM (2001) decline and vastly different than the Credit Market Crisis (2008-09) because both of those events were related to true fundamental and technical evaluations.  In both of those instances, prices have been rising for quite some time, but the underlying fundamentals of the economics of the markets collapsed and the markets collapsed with future expectations. Before we get too deep, be sure to opt-in to our free market trend signals newsletter.

Our researchers believe the setup prior to the Black Monday collapse is strangely similar to the current setup across the global markets.  In 1982, Ronald Reagan was elected into his second term as the US President.  Since his election in 1980, the US stock market has risen over 300% by August 1987.

Reagan, much like President Trump, was elected after a long period of US economic malaise and ushered in an economic boom-cycle that really began to accelerate near August 1983 – near the end of his first term. The expansion from the lows of 1982, near 102.20, to the highs of 1987, near 337.90, in the S&P 500 prompted an incredible rally in the US markets for all global investors.

This is very similar to what has happened since 2015/16 in the markets and particularly after the November 2016 elections when the S&P500 bottomed near 1807.5 and has recently set hew highs near 3026.20 – a 67.4% price rally in just over 3 years.

One can simply make the assumption that global investors poured capital in the US markets in 1983 to 1986 as the US markets entered a rally mode just like we suspect global investors have poured capital into the US markets after the 2016 US elections and have continued to seek value, safety, and returns in the US markets since.  These incredible price rallies setup a very real potential for “true price exploration” when investors suddenly realize valuations may be out of control.

So, what actually happened on October 19th, 1987 that was different than the last few market collapse events and why is it so similar to what is happening today?

On October 19, 1987, a different set of circumstances took place.  This was almost a perfect storm of sorts for the markets.  The US markets had risen nearly 44% by August 1987 from the previous yearly close – a huge rally had taken place.  Computer trading, which some people suspected may have been a  reason for the price decline on October 19, was largely in its infancy.

Floor traders were running the show in New York and Chicago.  The London markets closed early the Friday, October 16, because of a   weather event that was taking place.  The “setup” of these events may have played a roll in the liquidity issues that became evident on Black Monday and pushed the US markets down 22.61% by the end of trading.

The US markets had set up a top near 2,722 in early August 1987 after rising nearly 44% from the 1986 end of year closing price level of 1,895.  The SPX rotated lower from this peak to set up a sideways price channel near 315 throughout the end of August and through most of September.  On October 5, 1987, the SPX started a downward price move that attempted to test the lower support channel near 312.  On October 12, one week later, the SPX broke below this support channel and closed at 298.10 (below the psychological 300 level).  The very next weekend was October 17 & 18 – the weekend before Black Monday.

Sunday night, October 18, in the US, the Asian markets opened for trading and a price sell-off began taking place in Hong Kong.  Because the London markets has closed early on the 16th due to the storm, by the time they opened the UK markets began tanking almost immediately.  Early in the day on Monday, October 19, the FTSE100 had collapsed over 136 points.

Our researchers believe the declines in the US markets in early October 1987 set up a breakdown event that, once support was broken, prompted a collapse event where liquidity issues accelerated the price decline volatility – much like the “flash crash”.  Global investors were unprepared for the scale and scope of the price decline event and panicked at the speed of the price collapse.

In fact, at the height of the 1987 crash, systemic problems (mostly solvency and brokerage house operations) continued to threaten a much larger financial market collapse.  Within days of Black Monday, it became evident that margin accounts and solvency issues related to operating capital, large scale risks and continued fear that the markets may continue to collapse presented a very real problem for the US and for the world.  Have we reentered another Black Monday type of setup across the global markets?

As new economic data continues to suggest the global markets are economically contracting and stagnating, the US Federal Reserve has started buying assets again while the foreign central banks continue to push negative interest rates while attempting to spark any signs of real economic growth.  The US stock market has continued to push higher – almost attempting new all-time highs again just recently.  The US stock market is up nearly 68% over the past 3.5 years since Trump was elected and as of Friday, October 18, 2019, the US stock markets fell nearly 0.75% on economic fears.

In Part II of this article, we’ll explore the potential of another Black Monday type of setup that may be playing out before our very eyes right now in the US stock market.

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.

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 Today to Get a Free 1oz Silver Bar with a subscription – Offer Ends This Week!

Chris Vermeulen
www.TheTechnicalTraders.com

Treasuries Pause Near Resistance Before The Next Rally

Our research team believes the US Treasuries and the US Dollar will continue to strengthen over the next 2 to 6+ weeks as foreign market and emerging market credit and debt concerns outweigh any concerns originating from the US economy or political theater.  Overall, the major global economies will likely continue to see strength related to their currencies and debt instruments simply because the foreign market and emerging markets are dramatically more fragile than the more mature major global economies.

We believe the US Treasuries may surprise investors by rallying from current levels, near price resistance, to levels above $151 on the TLT chart.

Our belief is that further economic concerns related to trade, foreign economic metrics and data and the forward perspective of many emerging and foreign markets will continue to weaken much more dramatically than the US or other major global economies.  Thus, we believe capital will continue to pour into the US and more mature major global economic markets (Canada, Japan, Great Britain, Swiss) as a move to safety just as capital is moving into the precious metals markets.

When fear enters the global markets, capital seeks out the safest and most secure environments for investment.  If the rest of the world’s economies are becoming weaker and more fragile as trade and economic factors continue to hit the news wires, the more mature major economic countries are naturally going to benefit from their more robust and secure economic power and strength.  The flight to safety will result in capital moving away from risk and into the safety of these more mature economies simply because they provide a level of security and risk aversion that can’t be found elsewhere. Make sure to opt-in to our free market trend signals newsletter.

DAILY TLT CHART

This Daily TLT chart highlights the resistance level that we believe is current constricting the current price advance from breaking higher.  We believe this resistance channel is causing the TLT price to pause below $147 and will continue to keep prices within this channel until some economic news event or positive US economic news item pushes the price higher.  The US and global markets are waiting for some type of news event before attempting to make another move.  We believe the future news will result in an upside technical breakout and a new rally towards the $152 to $155 level in TLT.

WEEKLY TLT CHART

This Weekly TLT chart highlights the extended bullish price rally that started back in late October 2018.  This upside price move has already rallied more than 40%, but we don’t believe it is over yet.  Our Fibonacci price modeling system is suggesting $154 to $155 is the next upside price target.  To be a bit more conservative, we’ve targeted the $152 level for skilled traders to work with.  Once price achieves the $152 target level, look to cover any open long trades you may have.

If you are an active trader of gold, gold stocks, bonds, or the SP500 and would like to hear a trading style that reduces the amount of trades you take while making the same or better returns listen to this conversion with Adam Johnson who is an x-Bloomberg anchor, and now active trader.

Understanding how pricing and global market dynamics work throughout the stock market and the global market can be confusing at times.  How can one attempt to understand what will move in a certain direction, why it will move that way and how one can profit from these opportunities and be difficult for many people to grasp.  We do our best to try to help you by highlighting trade setups, explaining our thinking and research, sharing some of the charts with our proprietary trading tools and to help you identify strong opportunities for success.

Bonds are likely to continue to trade in a sideways price range before breaking higher near the end of 2019.  This aligns with our expectations that foreign markets may come under intense economic pressure while the US economy continues to provide safety for investors for the long term.  The support level above 157 is critical going forward.

DAILY PRICE CYCLE PREDICTED PRICE TREND

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.

THE TECHNICAL TRADERS CONCLUDING THOUGHTS:

Right now, we believe the markets are waiting for some news events to make their next move.  This is the time to take very measured positions when trading.  This is NOT the time to go “all-in” on some trade.  Be prepared for a spike in volatility and a new price trend to establish within the next 3 to 10 trading days.

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.

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 Today to Get a Free 1oz Silver Bar with a subscription – Offer Ends This Week!

Chris Vermeulen
www.TheTechnicalTraders.com

Currencies Show A Shift to Safety And Maturity – What Does It Mean?

Recent rotation in multiple foreign currencies hints at the fact that a new stage of the “Capital Shift” process is taking place and that skilled technical investors need to pay very close attention to how these currencies continue to react over the next 3 to 6+ months.  In the recent past, most of the world’s foreign currencies were declining in value while the US Dollar continued to strengthen.  In fact, we authored many research articles about these trends and how weakness in foreign currencies will drive new foreign investment into the US stock markets for two simple reasons; strength and security.

Now that a few of the world’s most mature economies, and some that may surprise you, are starting to change directions, we may be beginning a new stage of the “capital shift” process that may open up multiple new opportunities for skilled technical traders.  As the old saying goes, “follow the money”.  At this point, if our research team is correct about these price trend changes, following the money may mean opening our eyes to new investment opportunities across the Pacific and Atlantic – as well as very near to the US.

Before we continue, we suggest reading the following research post to understand a bit about the history of our research and be sure to opt-in to our free market trend signals newsletter.

September 10, 2019: METALS & THE US DOLLAR: HOW IT ALL RELATES – PART I

The first thing we want to highlight is our belief that the US Dollar and US stock market should continue to provide price strength and upward price opportunity – even throughout any price correction or contraction that our researchers may identify.  Our predictive modeling systems have shown us what we believe to be an incredibly accurate prediction of future price activity over the next 3 to 5+ years.

Even though we are not going to share that research with you today, the one thing we want all of our followers to understand is that the US stock market, and likely the US Dollar, are poised to continue to see longer-term upward price growth over the next 3+ years.  Yes, there may be a few price rotations/declines throughout this process and we need to be aware that price naturally attempts these types of rotations in an effort to provide future price support, price exploration and future price trends.  The price must always attempt to establish new highs or lows throughout a trending process.

US DOLLAR

The US Dollar has been trending higher since early 2018.  We believe the US Dollar will continue to push higher within the price channels we’ve drawn on this chart and, eventually, attempt to move to levels above 100 near the end of 2020 (or slightly after this date).  We don’t believe anything will disrupt the continued strength of the US Dollar unless some major economic/credit crisis completely destroys the support of the global economic markets and takes everything down with it.

Our researchers believe the new shift in the “capital shift” process of global investing is centered around the concept that certain global currencies, as well as their associated stock markets and strategic stock sectors, may have reached a point where price is exceedingly below fair value and when one considers the fundamental economic strengths related to maturity, economic capabilities, geopolitical or proximity economic factors and future leadership/opportunity factors – investors are suddenly viewing these currencies and stock markets as “uniquely positioned for potential upside growth”.  Thus, this change in perspective could drive a new upside price trend throughout a number of undervalued currencies as well as present a very real possibility that skilled technical traders may find real value and real opportunity by expanding their search criteria into assets related to these currencies.

One of the most basic elements of investing is understanding how supply-demand economic functions work and where the current “equilibrium” is at.  The easiest way for us to try to explain this concept is to think of a very sought-after product (let us assume one ounce of gold) and the price of that gold as a measure of the price level in relation to demand.  When the price of gold is very low, buyers rush into the market to buy up as much as they can afford because the perception is that gold prices should be higher (thus gold is undervalued).  This means the equilibrium level is higher than the current price level of gold.  When the price of gold is very high, buyers stay away from purchasing (or can’t purchase because it is too high) and the price will eventually begin to fall lower because demand is very low.  This means the equilibrium level is lower than the current high price of gold.

Price always moves from above or below the equilibrium level to price levels on the opposite side of the equilibrium level.  Think of the equilibrium level as the optimal price level where demand meets supply and where future expectations of price are minimized.  This equilibrium level is where the price would be if we removed all the hype, fear, greed and speculation out of the market.  The equilibrium level fluctuates as true fundamentals and true price exploration takes place across the supply-demand curve.  Almost like the average temperature fluctuates throughout the seasons of the year.

When a shift in investor sentiment happens, much like a shift in seasons, price changes direction begins to rally of decline and this shift in trend changes the supply-demand equilibrium level as investors pile into or pull out of a market.  Thus, if our researchers are correct and this change in the longer-term opportunity for selected currencies is a true longer-term capital shift, it may be a very early opportunity for investors to begin focusing on the opportunities that will become present in the near future.

AUSTRALIAN DOLLAR

The first currency we want to focus on is the Australian Dollar.  Historically, the Australian Dollar has continued to trend lower over the past 18+ months and currently shows very little strength or opportunity to form a bottom.  The lows near 0.67 may prove to become a future bottom in price, but the trend has not confirmed this yet and because of that, we believe weakness is still prevalent in price.

CANADIAN DOLLAR

The Canadian Dollar, on the other hand, has set up an intermediate price bottom in early 2019 and has continued to strengthen moderately over the past 10+ months.  One thing that we want to point out about our research is that we believe currencies and nations that have strong economic ties and proximity advantages (being close to the US and having strong economic ties with the US) are very likely to perform well or begin to strengthen in the near future.  Canada has a number of factors that may prove to be advantageous going forward.  Strong economic ties with the US, a booming cannabis and resource market, strong agriculture exports and a very mature economy compared to other nations.

EURO

The Euro price chart continues to illustrate price weakness as future expectations of economic strength is very far off.  The interesting facet related to the Euro is that a weakening Euro will eventually present a very clear opportunity for investors the instant the European-union enters any type of economic recovery or strength.  Until that happens, we believe the continued price weakness will potentially drive the Euro lower – eventually attempting true parity with the US Dollar.

BRITISH POUND

The British Pound has recently rebounded to the upside with some level of ferocity.  Of course, this 6+ week upside price rally does not make a new longer-term price trend yet – but we believe this upside price move may be related to the future BREXIT deal and renewed economic ties/trade with the US.  In other words, investors may be shifting expectations and price levels into acceptance that the British Pound may become a very solid future investment assuming the BREXIT deal creates a renewed economic cooperation between Great Britain and the US.

MEXICAN PESO

Lastly, the Mexican Peso has recently started to base near 0.049 and may possibly attempt to move above longer-term resistance near 0.053 on renewed expectations of a stronger economy, stronger economic ties with the US and a post-US 2020 Presidential election rally.  Currently, the bottom in the Peso occurred in 2017 near 0.04785.  We believe the Peso could rally above 0.061 over the next 18+ months – resulting in an 18%+ upside price rally related to stronger US economic growth and stronger economic ties between the US and Mexico.

CONCLUDING THOUGHTS:

These changed in direction in the Mexican Peso, Canadian Dollar and British Pound suggest that global investors may begin shifting capital into the strongest sectors and/or the value sectors of these countries attempting to capture a late 2020 price rally that may carry forward into the 2021 and beyond economic recovery that we expect to take place after the 2020 US Presidential elections.

Please keep in mind that quite a bit hinges of the outcome of the US Presidential elections in 2020.  Just like we saw on election night in November 2016, global investors and global corporate leaders will react to any fear or opportunity related to who is expected to win the US elections in 2020.  More taxes, more regulation, more uncertainty will immediately derail any attempted economic recovery that sets up over the next 10+ months.  We need to watch how these currencies strengthen before the election, then become very cautious 2 to 3 weeks before the election takes place in 2020.

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

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.

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

I Mentioned This Before And You Need To Know – Take It Or Leave It!

I mentioned this already so just ignore if you are not interested, but just a reminder that you registered to get my weekly free analysis, you have likely read my articles or watched the analysis videos which we have been nailing nearly every market move this year, but for some reason, you stopped?

Why did you stop? This is IT! This is the ONE THING…that SINGLE trading and investment newsletter that’s going to turn into the greatest decision you’ve ever made.

In fact, we are about to enter a new trade and could last about 55 days but you need to join us in the member’s only area to find out exactly how to trade it for maximum profits. Imagine knowing where the S&P 500 or Gold is headed before everyone else, and you know the trend of each asset to trade with bullish or bearish ETFs? Yes, it is exciting, to say the least!

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Take a look at some of our recent trades our application that instantly and automatically track our trades, instantly sends an email and SMS alerts to you. It’s WAY faster than me spotting the alert then manually having to type up alerts and send them with a long delay – this software is now included!

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LAST CHANCE FOR WINNING TRADE ALERTS, DAILY VIDEO ANALYSIS, AND FREE SILVER BAR – CLICK HERE

Gold Cycle Forecast Signals Bottom Is Near

It is absolutely amazing how the precious metals markets have followed our October 2018 predictions almost like clockwork.  Our call for an April 21~24 momentum base below $1300 followed by an extensive rally to levels above $1550 has been playing out almost like we scripted these future price moves.

Now that the $1550 level has been reached, we are expecting a rotation to levels that may reach just below the $1450 level before attempting to set up another momentum base/bottom formation.  And just like clockwork, Gold has followed our predictions and price is falling as we expected. Just look at our October 2018 chart where we forecasted the price of gold rallies and corrections along the way.

GOLD FORECAST & IS THE DEBT CRISIS ABOUT TO BE REBORN IN 2020?
https://www.thetechnicaltraders.com/is-the-debt-crisis-about-to-be-reborn-in-2020/

GOLD CYCLE FORECAST – DAILY CHART

Take a look at the most active cycles for gold and where our gold forecast is pointing to next. The downside rotation currently in Gold is likely not quite over yet and the gold mines will selloff the most.  This new momentum base should setup and complete once the gold cycles bottom.  The next upside price leg should push Gold well above the $1760~1780 level – so get ready for another big rally of 20%+.

GOLD MINERS SELL OFF – DAILY CHART

Unfortunately, so many traders are highly emotional and fall in love with positions in shiny metals or gold miner stock positions. Yet we all know if you trade on emotions or fall in love with a position, you are most likely to lose a ton of money. Two weeks ago I got so much flack from traders when I said gold miners were on the verge of a violent drop in price, then the bottom fell out and the dropped huge. Then last Thursday morning when gold, silver, and miners are trading up huge in pre-market and at the opening bell I warned it looked like a big fakeout and price could collapse for yet a second leg down and the same response from those emotional traders who love their positions and won’t sell them when they should as active traders.

HAVE YOU OUTPERFORMED GDXJ THIS YEAR?

If you like to trade in the precious metals sector then you most likely love to trade the gold miners ETF GDXJ. As you can see above GDXJ is only up 19.55% year to date. Sure, it’s a nice gain, but are you still holding your metals position knowing you just gave back most or all of your profits?

Being a technical analyst my focus is to only enter a position when the charts/analysis point to an immediate price advance or decline. I site in cash waiting for the next cycle top or bottom to form in an asset class like gold miners, gold, silver, or silver miners, and once the cycle starts I jump on the wave and ride it for the move until it shows signs that its weakening and will break. almost 50% of the year my portfolio is sitting in cash. And my average position only lasts around 12 days.

Take a look at all my precious metals related trades this year (2019) below. They are all winners, and total gain for subscribers of my Wealth Building Newsletter is 41.74% profit. More than double the return than if you were riding the GDXJ roller coaster for 9 months straight and all your money at risk.

My point here is that no matter how much you love metals (and I LOVE METALS), but you do not need to always be in a position in them. There are times to own, and times to watch with your money safely in cash.

CONCLUDING THOUGHTS:

The end result is that the fear and greed that is starting to show up in the precious metals markets may become an “unruly beast” if it continues to grow in strength and velocity.

Keep reading our research because our proprietary tools have been nailing all of these price targets and moves 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 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!

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

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
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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.

Gold Gifts Traders With Another Rotation Below $1500

Positive expectations related to the US/China trades negotiations on October 10th prompted a moderately strong upside move in the US major indexes and the stock market.

Additionally, the precious metals fell in correlation to the upside move in the US stock market and presented another opportunity for skilled technical traders to look for entries below $1500 in Gold and below $17.75 in Silver.

We can’t stress the importance of this critical $1500 price level in Gold as a key level for all traders to watch.  It has continued to provide key support for Gold since the price rally that initiated in late April 2019.  We believe this level will act as a relatively strong price “floor” going forward and any price activity below $1500 could represent a very opportunistic entry area for skilled traders.

Back in early September, we authored this research post highlighting what we believed would happen going forward 30 to 60+ days for Gold.  At that time, the price of Gold has just rallied above $1500 for the first time in 2019.

We alerted our followers that we believed Gold would stall near the $1550 level, move briefly towards the $1475 to $1500 level, set up a new momentum base near the $1500 price level and begin a new rally soon after this base was complete.  You can read this research post here: https://www.thetechnicaltraders.com/global-market-chaos-means-precious-metals-will-continue-to-rise/ .

GOLD WEEKLY CHART FROM OUR SEPTEMBER 2ND RESEARCH POST

This is a Gold Weekly chart from that September 2 research post.  We still believe our research from that post is accurate and we believe this new move below $1500 is an incredible opportunity for skilled traders that understand the real potential of the future of precious metals.

120 MINUTE GOLD CHART SHOWING PRICE CORRECTION WARNING BEFORE IT HAPPENED

This 120 Minute Gold chart showing the early price decline on October 10, 2019 and highlighting the $1500 price support zone in RED illustrates how price has continued to find this level acting as strong support and how price has, in the past, moved through this level and back above it to form the new “momentum base/bottom” near October 1, 2019.

We believe any move below $1500 (or more precisely – $1495) is a very strong entry point.  Obviously, a price move to lower levels would be even better.  Currently, as long as price stays above the Momentum Base level (near $1463), then we consider the October 1 price rotation the true momentum base “low”.

CURRENT DAILY CHART OF GOLD – SUPPORT ZONE, AND FORECAST

This Daily chart highlights the same $1500 price support zone and clearly illustrates why we believe any price move below $1500 is a very strong opportunity for skilled traders.  The next leg in Gold should push prices above $1700 (possibly higher).  Longer-term, we believe the fear and uncertainty in the global markets will not subside until well after the 2020 US Presidential election cycle completes.

CONCLUDING THOUGHTS:

Therefore, we have at least 12 to 16+ months of continued fear driving investor uncertainty in precious metals and as the US political chaos heats up, so will precious metals.  At this point, we believe Gold has just started to “lift-off” in terms of the ultimate upside potential over the longer term.  We’ve discussed the potential of Gold reaching above $3750 and we believe this target level is very valid.

Yesterday I talked about how to trade and where gold, silver and miners were within their bul/bear market cycle which may surprise you. Listen to my thoughts in this Podcast here.

Play these moves accordingly.  This may be the last time you see Gold trading below $1500 for quite a while.

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.

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 to learn how to take advantage of our members-only research and trading signals.

Lots of Upside Ahead for the Metals and Miners

Palisade Radio talks with Chris as he discusses his approach to trading and why technical analysis works for him. He focuses on the chart and price action and explains why investors need to follow a trading strategy that suits their personality.

He cautions that a broad sell-off is likely when stocks move into the next bear market. This liquidation will pull everything down, including gold, for a time. Afterward, he anticipates a massive rally in the juniors.

Time Stamp References:

0:40 – Chris’s early career.

3:25 – What led him to technical analysis.

5:30 – Stage Analysis and market trends.

8:15 – Why investors need a strategy.

13:40 – Indicators for market timing.

17:20 – Avoid too much information.

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.

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 to learn how to take advantage of our members-only research and trading signals.