Posts

Is Natural Gas Ready For An April Rally

Our researchers have been following Natural Gas for many months and believe the current price level, near $1.65, is acting as a continued historical support level (a floor in price).  Our researchers also used one of our data mining tools to attempt to identify if any opportunity exists in NG over the next 30 to 60+ days for skilled traders.  The purpose of this data mining tool is to explore historical price activity and to determine if there is any true price “bias” that exists within certain months.

For example, if we could determine that Natural Gas tends to rally in April by a 2:1 ratio (historically) and that the rally in NG is typically somewhere between $0.50 and $1.50 to the upside, then we could attempt to use this information to set up a trade that allows us to attempt to profit from this potential future trend bias.  A 2:1 ratio would indicate that, historically, the price rallied 10 times and didn’t rally 5 times over a span of 15 instances.

Our data mining utility reported the following data for April, May, and June in Natural Gas.

MONTHLY NATURAL GAS PRICE CHART

If we look at the APRIL data, the POS bars = 17 and the NEG bars = 8 – that sets up a slightly greater than 2:1 ratio of advancing price over declining price in April.  The “Total Monthly Sum” across 25 instances of data is $1.12 whereas the Average for the POS price activity comes to just $0.24.

This suggests that in April, we have a fairly high opportunity for some upside price activity in Natural Gas based on this data – a nearly 2:1 advancing price ratio (historically).  Yet it also means that advancing price may only rally $0.35 to $0.75 from any price bottom – so we have to be aware of risks that may exists with a small price advance from the current low levels.

If we take a look at the MAY data, the POS bars = 13 and the NEG bars = 11 – that sets up a 1.18:1 ratio that suggests a very slight advantage to the possibility that continued upside price activity will happen in May.  Yet, the upside price advantage shown my the “Total Monthly Sum” data suggests a very big opportunity for a breakout rally in May (+$2.40).  The way I interpret this data is to understand that May is roughly 60/40 biased to the upside whereas if any upside move takes place in April, a continuation of that trend in May could be incredibly profitable with a proper strategy.

Take a look at the JUNE data and try to come up with an interpretation yourself.  The POS bars / NEG bars represent a less than 1:1 ratio.  The Total Monthly Sum ($0.21) is not a very substantial price advance.  The data is somewhat indecisive or inconclusive in suggesting any real price advantage in June for trading.

Yet, we have a very clear advantage in April and May.  So, how are we going to approach this trade setup?

WEEKLY NATURAL GAS CHART – CYCLES & SUPPORT

Currently, NG is testing very deep price levels within the BLUE support range box.  Aggressive traders can attempt to look for opportunities within this range but must understand risks are still high for continued moderate price decline before a bottom sets up in April.  Skilled traders would wait for the bottom to set up and possibly look for opportunities in ETFs as a means to limit risks on initial positions – attempting to scale into the trade comfortably.

Once the rally in NG really sets up and breaches the $1.98 level moving higher, then we believe we have a very real rally on our hands that may see price levels back above $2.75 eventually.  The $1.85 to $1.99 price level will act as resistance as price attempts to move higher.

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

Why are these types of setups so important to skilled traders?  Historical price structures and patterns, like this data mining pattern, help to clearly illustrate strategic advantages in certain markets for skilled traders. Determining how to set up a proper trade knowing this data is also important.  Risks exist with every trade you make and I’m sure we’ve all learned a lesson or two about making a hasty trade and not thinking about it?

Our research team believes April and May 2020 could be very exciting for Natural Gas.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Silver Prepares For Next Leg Higher

Following up on some of our recent metals research, we wanted to alert our friends and followers to the incredible opportunity that still exists in Silver.  We’ve highlighted two of our more recent articles for reference and review, below.  Silver continues to be one of the most incredible opportunities for 2020 and Silver Miners (SIL) could explode to the upside as the price of Silver rallies to close the gap between the Gold to Silver ratio.

Our researchers believe Silver is currently undervalued, compared to Gold, by at least 240%.  Historically, the Gold to Silver ratio averages a 10+ year rotational range of between 63 to 67.  This means that through both peaks and troughs, ranging from the high 80s to mid-90s to the low 30s to mid-40s, on average the middle price range level for this ratio is near 65.  Currently, this Gold to Silver ratio is 88.4.

Gold is currently trading at $1590 – just below the recent peak near $1613.  We believe that Gold will continue to rally higher, breaking the $1613 level, and continue higher targeting the $1750 level over the next few months.  Eventually, within 2020, we believe Gold will continue to rally higher breaking the $2100 price level.

This continued upside price action in Gold, while Silver has really yet to see any massive upside price movement, continues to create a massive price disparity between Gold and Silver – which is highlighted in the Gold to Silver ratio.  As Gold rallies, Silver must begin to move dramatically higher in order to close this price disparity between the value of Gold to Silver.  Historically, we believe the rally in Silver will force the Gold to Silver Ratio to fall to near the 65 level.  This would represent a massive 70% to 120%+ rally in the price of silver – targeting $24.50 to 32.50.

GOLD AND SILVER RATIO WEEKLY CHART

If the Gold to Silver Ratio falls below the 65 level and targets lower ratios, as has happened in the past, then Silver may rally as high as $45 to $55 per ounce while Gold stays below $1800.  If Gold does rally above $2000, as we expect, the true potential for Silver experiencing a major price reversion event could be as high as $60+ per ounce.

Please take a minute to read some of our previous research posts regarding the metals markets here:

January 14, 2020: SILVER TRADERS BIG TREND ANALYSIS – PART II

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

DAILY PRICE OF SILVER CHART

This Daily Silver chart highlights what we believe will be the next move higher in Silver.  The next upside price advance should target the $21 to $23 level as Silver attempts to revalue compared to the price of Gold.  Near this $23 level, Silver should stall briefly before attempting to move much higher.  The reality is that once this revaluation event begins to take place in Silver, we believe it will prompt an extended price rally that could last well into 2023-2024.

PRICE OF SILVER WEEKLY CHART

This Weekly Silver chart highlights our research team’s expectations related to Silver over the next 6+ months.  At first, we believe the $21 to $23 level will become the target.  Then, a short period of price rotation will find support near $21 before another upside price leg pushes silver above $24.  Remember, if Gold continues to rally higher, these expectations could extend 5% to 10% in size and scale.

SILVER MINERS SECTOR ETF – WEEKLY CHART

Another key component of this move is the opportunity in Silver Miners.  This SIL Weekly chart highlights the real potential for a 20% to 30% upside price rally related to the expected price revaluation/reversion event we have been describing for Silver.  Miners are an excellent correlative component for skilled traders expecting a move like this in the metals market.

Learn how we can help you find and execute better trades and turn the extreme volatility into solid profits.  Read our research and see what our research team has been predicting over the past few months.  We dedicate our efforts to helping you find great trades and helping you protect your assets.

Join my ETF Trade Alert Newsletter – 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 to learn how to take advantage of our members-only research and trading signals.

VIX To Begin A New Uptrend and What it Means

The news of the drone attack on Saudi Arabia over the weekend prompted a big upside move in Oil (over 10%) and a moderate downside rotation in the US major indexes/stock market.  Although prices had recovered slightly by the opening bell on Monday, September 16, the shock wave resulting from this disruption in oil supply is just now starting to play out.

The long term uncertainty in the markets, as well as the rotation in the US Dollar and other foreign currencies, could play a bigger role in the type of volatility and extent of the immediate price rotation that may result from this external news event.  Our VIX predictions and ADL predictive modeling system are suggesting volatility will become front and center over the next 60+ day before settling into a more narrow price range.

As we see it, this disruption in oil is an external factor related to the markets.  Yes, it will disrupt about 5% of the global oil supply.  Yes, some type of retaliation could take place over the next 30 to 60 days.  Yes, the global markets will continue to rotate until they have priced in the additional risk related to this current event and potential future events.  That means investors must understand the value and opportunity of proper position sizing and risk management.  The next few weeks may be full of surprises.

VIX INDEX FIBONACCI UPSIDE TARGETS CHART

Our VIX chart highlights what we expect in terms of the potential upside price volatility in the US stock market.  You can see we expected the VIX price to decline after the peak in early August 2019, then bottom near August 20~21 and attempt a move higher (related to our August 19 breakdown expectations).  This breakdown never happened as news events pushed the general markets higher – abating the spike in the VIX we were expecting.  Our further expectations were that VIX would cycle lower near the end of August 2019 and into very early September 2019 before setting up a bottom near 24 and extending higher.  Obviously, our expected levels were off by quite a bit, but the rotation in the VIX continues to align with our rotational cycles.

Therefore, we believe the potential for an upside price move in the VIX is still very valid, especially given the events of last weekend and the continued trade talks, market fragility and potential for major news events.  We believe the VIX may be starting an upward price cycle that could push it well past 21~24 should the US stock markets rotate lower or contract.

 

SP500 INDEX WEEKLY ADAPTIVE DYNAMIC LEARNING (ADL) CHART

Our ES Weekly Adaptive Dynamic Learning (ADL) chart highlights why we believe an extended volatility range exists over the next 60+ days and why we believe a rotation of 8 to 12% is a real possibility in the US stock market/major indexes.  Our ADL predictive modeling system is very useful because it highlights where price may attempt to target out into the future based on a proprietary price mapping/data mining solution.  The purpose of this tool is to map historical price activity by unique price pattern, technical data and categories, learn from the past and attempt to use this data to predict the future.  We’ve found it to be extremely valuable in our research.

This ES Weekly ADL chart suggests an 8 to 12% price range is set up in the US stock markets over the next 60+ days.  This suggests that and price weakness or external news event could send the US stock market much lower before finding any real support.  Any absence of this breakdown event or crisis-type news event would suggest that prices will attempt to drift moderately higher over the next 60+ days.

In other words, there is a very real potential for a potentially big downside price rotation currently set up in the markets.  That potential vanishes in early November 2019 as the ADL predictive modeling system suggests a more narrow target range for the price with an upside price bias driving markets to potentially new all-time highs.

 

CONCLUDING THOUGHT:

Get ready for some really great trading opportunities over the next 4+ months.  Any downside price rotation will present a very clear buying opportunity for skilled technical traders and members of our ETF Wealth Building Newsletter as we lead into the November/December market rally (Christmas Rally).  This means we must continue to be cautious of extended volatility and play these price rotations with a strong focus on managing risk before the November/December rally sets up to close out 2019.

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.

So, if you believe in technical analysis, then this is the newsletter and market condition for you to really shine.

Be prepared for these price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our  Wealth Building & Global Financial Reset Newsletter.

Join me with a 1 or 2-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.

FREE GOLD OR SILVER WITH SUBSCRIPTION!

Chris Vermeulen – www.TheTechnicalTraders.com

A LOOK AT THE DOWNTREND IN US MARKETS AND OIL, AND THE UPTREND IN GOLD

Chris Vermeulen, Founder of The Technical Traders joins Cory Fleck today to share his thoughts on the recent downtrend in US markets and oil, plus a couple of comments on the gold uptrend. Long term trends are still the most important and until a larger break happens the trend is still higher. more importantly, the gold uptrend seems to just be beginning.

Get Chris’ ETF Trade Alerts Now – Click Here