As we’ve been warning over the past few weeks and months, the current price rotation in the US stock market is very much related to the strength of the US Dollar and the continued Capital Shift that is taking place as trade issues and currency valuations drive investors into the US equity and debt markets as protection against risk. We talk about some of these new Super-Cycles starting and how we can take advantage of them in this new guide.
The US Dollar stalled today after a recent price decline from just above $98 to a current level near $96.60. Over the past 15+ months, the US Dollar has risen from lows near $88 to highs near $98 – an 11.2% price rally. Meanwhile, many other foreign currencies have collapsed over this same span of time.
We believe the continued Capital Shift is driving further investment in the US stock market and debt market as a way to avoid the risks of further currency valuation declines and as a means of protecting wealth. Until this currency dynamic changes, we expect the strength of the US economy and US Dollar to continue to push investors into the US equity markets.
This being said, a very interesting dynamic is starting to set up. Gold and Silver have started to move higher while Oil, Natural Gas and other commodities are pushing lower. This type of activity in the commodity markets suggests some increased fear is driving investors away from speculating on increased global economic activities and pushing capital into expectations of a market top or deeper correction.
We’ve read recently where institutional traders have started initiating heavy short positions in the US markets and we believe these investors have jumped the gun a bit. We don’t see how or where a massive US market collapse is likely given the current strength in the US Dollar and the US economy. Yes, at some point this dynamic may shift and at some point, we may see a fairly deep correction of 12% to 18%. We believe that a top may happen in August or September 2019 – after the US stock market (DOW) reaches new all-time highs above $30k.
Right now, we believe the first rotation of our expected Pennant/Flag formation is starting to set up and we look for early signs in the DOW and TRAN charts.
This TRAN chart shows price rotation near the CYAN resistance level originating from the late April peak and spanning the early May price high. We believe this resistance level may play a key role in understanding how and when the next upside price leg begins to advance. We expect a downside price rotation to take place pushing the TRAN towards the $9600 level over the next few days/weeks.
This YM chart highlights a similar price pattern, but clearly illustrates one key difference – the New Price High. This fundamental element of Fibonacci price theory is that any attempt to break a past critical price high which results in a “new price high” designates the current trend as Bullish. Within Fibonacci price theory, price is always seeking to establish new price highs or new price lows – AT ALL TIMES. Therefore, a new price high or new price low is very significant.
The TRAN chart may continue to consolidate below the CYAN resistance level whereas the YM chart may attempt to push higher, with a bullish bias, setting up a Pennant/Flag formation as we expect. This would indicate that even though economic and transportation expectations are waning, the bullish bias in the YM suggests the Capital Shift factor is still pushing the US stock market upward.
Pay close attention to that big blue ellipse near the top of the chart. We drew that in place many months ago as an indicator of where we believe critical resistance is should the markets attempt to push higher and attempt new all-time highs.
We still believe this resistance is valid and as price rotates into the Pennant/Flag formation, we’ll extend this resistance forward – carrying the same slope and angle forward. If the YM is going to attempt a move to above $30k before our expected August/September 2019 top setup, it will have to push well above this resistance zone to accomplish this move.
Watch Gold and Silver over the next 3 to 4 weeks as any perceived weakness will push the precious metals higher still. We believe Gold will reach $1450 this summer and possibly higher before August as smart money rotates into the safe havens in anticipation of a bear market.
If you wanna become a technical trader with use and trade ETFs then be sure to join our Wealth Building Newsletter today and get our daily video analysis and swing trade alerts. In the past 17 months, our newsletter trade signals have generated 91% ROI for its subscribers, be sure to join before the markets start making new big moves and profit with us!
Chris Vermeulen
www.TheTechnicalTraders.com
https://thegoldandoilguy.com/wp-content/uploads/2019/06/29.png387700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-06-13 11:38:152019-06-13 11:38:15US Stock Market Setting Up A Pennant Formation
Chris Vermeulen, Founder of The Technical Traders joins me for a look at the energy sector, metals, and US markets. He points out that the US markets, as well as the metals, are at very important levels. Over the next few trading days, a decision will need to be made by the US markets which Chris thinks could be lower.
Click here to visit The Technical Traders website and follow along with what Chris is trading.
In fact, there are several super cycles starting to take place as we head into 2020 and beyond which Brad Matheny and layout in our new book: 2020 Cycles – The Greatest Opportunity Of Your Lifetime
https://thegoldandoilguy.com/wp-content/uploads/2019/06/audio-image.jpg10001000adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-06-13 10:54:082019-06-13 10:54:08THE NEXT WEEK WILL BE VERY IMPORTANT FOR US MARKETS WHICH IMPACT ALL THE OTHER MARKETS
Closing out the first week in June 2019, the US stock market rallied hard from recent lows and prompted many traders/investors to rethink their future plans. At the same time, Gold and Silver began a decent price rally of their own while Oil found support just above $50. It certainly has been an interesting week for traders. One that was full of incredible opportunity as many symbols rotated 6 to 12% or more over the past 10+ days.
The fact that Oil is finding support above $50 while Gold and Silver continue to rally suggests that fear may be entering the metals market while Oil may have found a temporary price bottom near $50 to $51. Weakness in the US Dollar is also helping both Oil and Metals to push higher. Our recent research suggests that the US Dollar will find support near $95 indicates the US Dollar may fall a bit further – pushing Oil and Metals a bit higher.
The strength in the US stock market near the end of the week suggests fear of any US collapse or future economic concerns appears to be abated. It is very unlikely the US major indexes would rally as they have on any extreme fear of any major US calamity or economic concerns. A slightly weakening US Dollar and moderately strong US economic data continues to suggest the US stock market may continue to be the repository of funds for foreign investors for many years to come – or until something dramatic changes in the US.
It is rather simple to understand the capital process that is at work in the global economy at the moment; until foreign market valuations and expectations appear to be opportunistic for future returns, the US Dollar and the US stock market are the most likely targets for foreign investment and safety. Weakening currencies, weakening global economies and weakening commodity prices will push capital away from foreign markets and into safety. Safety will be found in the US markets, precious metals and possibly Crypto currencies. Anything that avoids deflationary risks and credit/debt risks.
This YM Weekly chart highlighting our Fibonacci price modeling system shows how dramatic the upside price reversal was by the end of last week. The closing candles created an Engulfing Bullish candlestick pattern which is typically quite bullish. The fact that price closed above the GREEN Fibonacci trigger level is further indication that a renewed price rally may begin soon. Support near $24,000 appears to be quite strong and any further downside price risk must first break this level. As long as support holds and price continues an upside bias, there is a very strong potential for a move to above $28,000 in the works.
This NQ chart highlights a similar price pattern and suggests the NQ needs to climb above $7600 before a true rally can begin. Ultimately, the upside targets for this move are near $8500 or higher based on current price rotation. Support near $6800 is critical – so price must stay above this level for any future rally to continue.
We authored a VIX/Volatility article just a few days ago that highlighted our believe that the VIX would trade lower, within a sideways price channel till near the end of July or August 2019 – then begin another VIX Spike move upward. This coincides with the current research we are seeing where the US stock market will likely continue to push higher, very possibly setting new all-time highs again, before any real risk of any downside price collapse happens.
Follow our research and don’t miss these opportunities. We’ve been warning our followers for months that 2019 and 2020 are going to be incredible years for skilled traders. These recent 10 to 20% moves in Gold, Silver, Oil and many ETFs are just the beginning. Our research team and trading team are ready to help you find and execute for better success.
Chris Vermeulen
www.TheTechnicalTraders.com
https://thegoldandoilguy.com/wp-content/uploads/2019/06/21.png387700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-06-10 10:26:172019-06-10 10:26:17US Markets Rally Hard – Could Another Big Upside Leg Begin?
The continued upside price move in Gold is a very clear sign that fear is starting to enter the global markets again. We read an article last night that suggested many professional fund managers are preparing for a bigger downside price move as well as expecting the US Fed to potentially decreased interest rates over the next 12 to 24 months as the expected downside price move takes place. We understand this concern by many industry professionals and share some of their same concerns, yet we believe these individual are far too early in shifting their stance in the markets right now.
As you may be aware, our research does not show any major downside risks until later in July 2019 or August 2019. Even then, the price of the Dow Jones Index would have to fall over 18% before the December 2018 lows become threatened. The current upside price recovery, with the Dow Jones up over 400 pts from the lows on Monday, June 3, suggests the US market and the Capital Shift that has been taking place over the past 24+ months is still rather strong with investor buying dips. We told our followers this bounce was about to happen the day before it bottomed here.
It seems that everyone is trying to pick a top or call the big crash right now. Back in November 2018, it seemed like every professional trader we knew was advising their client “This is the BIG ONE” and suggesting the US markets could never recover from a deep sell-off like the one we experienced in late 2018. Yet, here we are, after reaching near all-time highs again, rotating a bit lower and the same voices seem to be stating “This is the BIG ONE” again.
Allow us to help clear up what is likely to happen based on our research and proprietary modeling tools.
This first chart of the VIX (Volatility Index) shows what we believe to be the most likely outcome over the next 30+ days. After a spike in the VIX in early may which our followers profited over 25% in a few days, we believe a downward pricing channel will set up where the VIX will continue to drift lower – eventually settling back below 14 again for another setup. It is very likely that this volatility consolidation coincides with a US stock market price recovery over the same span of time. We’ll get into more detail in the following charts.
Eventually, sometime in mid-July or mid-August, we expect the VIX to spike well above 20 to 22 as a broader US stock market price collapse takes place.
Throughout our expectations, we expect the US Dollar to enter a similar type of price pattern – setting up a Pennant formation after a moderately deep price correction nearing the $95 level. We believe the US Dollar will continue to move lower, driving precious metals higher, where the $95 support level is the key target. Once this level is reached, we believe the US Dollar will rotate higher and attempt a move above $97.50 again – possibly attempting new price highs. These new highs are likely to happen in early to mid July 2019.
Our last chart highlights what we believe will happen in the Dow Jones Index (as a general market example of what will likely happen in the ES, NQ and YM). As you can see, we believe the downside price swing that has currently taken price nearly -7.25% lower should be very close to completion. We believe the $24,300 to $24,600 level will act as strong support for this move and prompt another upside price leg over the next 7 to 14 days. We believe this upside price leg will push the DJI price level back towards the $26,000 level by late July or early August 2019.
We are suggesting that the early move into a protectionist stance by professional traders may be about to experience some extreme pressures. Should the US/China trade issue or the Mexico trade issue lessen or be resolved over the next 60+ days, the US stock markets could rally towards new highs fairly quickly. If things stay the same as they are now, we expect price to move exactly as we have highlighted on these charts.
Near the end of July or sometime in August 2019, we expect a bigger top formation to setup where a moderate price collapse may take place. Everything must setup perfectly for this to happen and we still have 40 to 60+ days of trading before this setup gets closer. Lots of things can happen over this span of time, so pay attention to our continued research to stay ahead of these moves.
One thing you can do to prepare for any future price volatility or rotation is to accumulate Gold and Silver positions near recent lows. If you like precious metals see my forecasting signals here This increase in volatility means that precious metals should continue to push higher as fear becomes more rooted across the globe.
We’ve now shown you two different price setups using Fibonacci price theory and the only thing we have to do is wait for a technical price confirmation before finding our entry trade. We’ll see how this plays out over the next few days and weeks. Remember, we are not proposing these as “major price bottoms”. They are “upside pullback trades” (bounces) at this point. A bullish price pullback in a downtrend.
We believe the current price rotation is just the beginning of something much bigger. Over the past 16+ months, we’ve been calling these tops and bottoms many months in advance. In February/March 2018, we called the bottom and initiated a call that the US stock market would rally to establish new all-time highs. Very few believed us at that time, but the markets did exactly what we predicted. In September 2018, we called for the markets to experience weakness, pause after a quick downturn, then establish an “ultimate bottom” near November 2018 before rallying back to near all-time highs again. At that time, everyone was betting the new market crash had taken over Wall Street and we were really the only ones suggesting the US stock market would rally back from the December 2018 lows. Guess what happened? The markets did exactly what we predicted and went on to hit new highs months later.
We’ve recently called the precious metals move perfectly with our originating research being done in October 2018. We called the Oil downturn in 2018 as well as the rally starting near December 2018. Now, we are going to share with you some incredible market insights and help you prepare for what will likely become the most frustrating next six months of trading for everyone.
Why is it going to be frustrating? Because everyone has already made up their minds as to what they expect to happen in the markets and WHY. We read a report today from an analyst that suggested he “moved into a defensive position and initiated positions in Inverse ETFs and Put Options”. Probably a smart move if he timed it right. What he’s going to do over the next 6 months will either make him a king or a pauper.
The fact is that the US stock market has initiated a very moderate downside price rotation recently and multiple levels of support must be breached before we could consider any of the recent downside pricing pressure as a “major trend reversal”. We believe many of these analysts are hyperventilating with regards to this move and seeing what they want to see from it – THE BEAR MARKET.
At this time, we do not agree with this narrative. Yes, the US stock market is under pricing pressure. The US/China trade deal is far from completed and the new US/Mexico tariffs are sure to roil the markets. Europe has just completed EU elections and must continue to navigate the hard questions of future management and opportunity with a BREXIT hanging over everyone’s heads. The Prime Minister of Malaysia is calling for a new “gold backed SE Asian currency” to help prevent the wild currency valuations as Malaysia saw in the mid-1990s. The US Presidential election cycle is just 15 months away and it is sure to be a blood-bath in some ways.
Could it be the start of the bear market?? Maybe, but our research suggests otherwise.
Our research suggests there is still another chance that the US stock market could bottom after these recent lows find support and rally back to near all-time highs again. Be cautious about how we stated this… “could bottom after these recent lows find support and rally back to near all-time highs again” does not mean “rally beyond recent highs” or “another leg to the upside will take place”. It means that we believe the current support will prompt a brief price rally back to “near all-time highs” before the end of August 2019.
This Weekly ES chart highlights the support levels we are watching and the peak zone near $2961. We believe the current support levels will attempt to provide a floor for price above $2630 and will prompt an upside price channel that will likely see price climb higher from recent lows.
The bottom line here for the broad stock market is that we should see bounce over the next couple weeks, then we follow the market higher with a big rally or short a collapse in price.
This chart is a little noisy with analysis and our custom indicator lines but it shows key analysis levels. The same type of setup is also taking place in the NQ – although we believe the NQ may have a bit further downside price risk than the ES or YM at the moment. We believe the support levels near $6800 and $6400 will act as a price floor and attempt to drive price moderately higher over the next 25 to 45 days. We believe the NQ will come under increased price pressure because of a capital rotation away from risk in Technology and future risk factors.
The YM is setting up very similar to the ES. Very clear support and the current price level is still relatively bullish compared to the two most recent bigger downside price moves. The idea that analysts could call this “The Big One” with little to know price confirmation is very confusing. We believe support above $23,400 will likely hold and price will begin a moderate upside price move (within a channel/pennant formation) over the next 25 to 40+ days in the YM.
One very clear exception to this analysis would be a very clear price breakdown below the lowest support level while attempting to target the December 2018 lows. Should this happen over the next 30 to 60 days without any sign of the support rotation and upward price channel we are expecting, then we would consider this analysis to have failed and we could be looking at a much bigger downside price move in the US stock markets. At this point, we don’t believe this will happen UNLESS some massive US or foreign crisis event unfolds over the next 30 to 60+ days.
We believe a shift in the “Capital Shift” process we have been discussing for the past 2+ years is still taking place. This is a “risk off” move prompted by a renewed FEAR level and currency price trends over the past 6+ months.
This currency chart clearly shows everyone is selling their currency and moving into what they believe is the safest currency which is the USD.
We believe Capital Shift process will go through a weakening process while fear drives investors out of high performing assets. This process will likely shift back towards searching for undervalued US equities as global investors seek new opportunities after these support levels prompt a base. The hunt to find returns will eventually lead everyone back into the US stock market as there is too much turmoil in the global markets currently.
If you missed this move, sit back and wait for these support levels to settle and then look for new trade opportunities. There will be lots of time to get into the BIG SHORT TRADE when it finally sets up and confirms.
https://thegoldandoilguy.com/wp-content/uploads/2019/06/9.png5871003adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-06-04 12:20:202019-06-04 12:20:20Second Half of 2019 – Expect The Unexpected
I have been pouring over the longer term charts as we’ve started to see Oil and Gold move in directions that would indicate increased fear throughout the global markets while a contraction in economic activity/oil prices appears to be setting up for another big move. The objective is to attempt to identify longer-term volatility expectations and price targets. To accomplish this task, we use our Adaptive Fibonacci predictive modeling utility on 3 Week charts because they provide a unique look at price activity and are a bit more reactive to shorter-term price activity than Monthly price bars.
We found some very interesting components by reviewing these charts of the ES, NQ, YM, and CL. We believe we are setting up a 2~4+ week sideways price rotation in the US stock market as price attempts to consolidate within this range before a broader breakout/breakdown move could happen. Just as we predicted many months ago, the July 2019 price peak we suggested could form appears to be setting up with a sideways pennant/flag formation as investors digest the economic and global trade war news data.
Eventually, the price will make a move in an attempt to break this sideways price channel and our predictive modeling solutions can help us to understand how these price setups will playing out. Let’s get into the charts and research.
As we start to pull apart the data from these charts, we urge you to pay attention to two things – the range of the current Bullish & Bearish Fibonacci Price Trigger levels and current price rotations of price peaks and troughs over the past 40 to 60 bars. It is very important to understand and attempt to use the “new price high” and “new price low” Fibonacci price theory that we keep talking about in our articles.
This first chart is the ES 3-Week chart highlighting the range between the Fibonacci Bullish and Bearish Price Trigger Levels (highlighted in light-CYAN). It is important to understand why the current bearish price trigger level is so far below current price levels. The Adaptive Fibonacci modeling system adjusts trigger levels based on recent price activity and price volatility to attempt to identify when the price is congesting in a sideways price trend or trending upward or downward. When price congests in a sideways form, the Adaptive Fibonacci modeling tool identifies this and determines that price would need to move to new levels in order to qualify for a new bullish or bearish price trigger. In this case, it is suggesting that price would need to fall below $2014 before this 3-Week chart would qualify the move as a “new bearish trend”.
That is a big move from current levels. It totals more than -750 points – a -27.5% price decline.
Currently, as long as the ES price stays above the $2633 level, the Fibonacci predictive modeling system is still suggesting the Bullish trend is intact and should continue.
This NQ 3-Week chart is setup in a similar manner to the ES chart. Although the Fibonacci volatility range on the NQ chart is much more narrow than the ES chart, the Fibonacci modeling system is still suggesting that the current trend is still Bullish and the key levels for the triggers are $6792 for the Bearish Trigger level and $6556 for the Bullish Trigger level.
Because of the narrow volatility range and because the Bearish trigger level is above the Bullish trigger level, we believe a price rotation where the price stays above $6800 is very likely over the next few weeks. Obviously, should price break below the Bearish Trigger level, then we would begin to become concerned that a broader downside trend is being established and start to look at the Fibonacci downside price targets (near $5815 & $3900). Until that happens, expect sideways price rotation with a 250 to 500 point range on average (about 2x the Fibonacci volatility range).
The YM is really the key to understanding just how the markets are going to play out over the next few weeks and months. The extremely large Fibonacci volatility range on the YM chart highlights the potential for the wild sideways price rotation that we are expecting over the next few weeks and months. Remember, our analysis from many months ago suggests a price peak will likely form in July/August 2019 and prompt a broader downside price move after this peak completes. Our expectation that a current sideways price channel is setting up leads us to believe the apex of this sideways price channel may result in a very brief price rally (pushing prices back towards recent highs) before rolling over and starting a new downside price move to coincide with our July/Aug 2019 predictions.
One way or another, it appears the DOW/YM will be leading the way in terms of price volatility and rotation. The wide range between the Bullish and Bearish Fibonacci Price Trigger Levels is suggesting that price volatility is increasing and that the YM would have to move to levels above $29,750 or to levels below $18,875 before establishing any new price trends. The past Fibonacci trigger levels help us to understand key price levels as this future move takes place.
Past Fibonacci Trigger Price levels are $26,025 for a Bearish Price Trigger level and $24,770 for a Bullish Price Trigger Level. This means if the price is below $26,025 – we should expect a bearish price trend to continue and if the price is above $24,770 – we should expect a bullish price trend to continue. Yet, price is current BETWEEN both of these levels, so what should we expect right now? When the price is in between these levels, like now, we typically look for the last price rotation (peak or valley) and for the last level that was crossed (in this case the $26,025 Bearish level) and would conclude:
The trend is currently Bearish and the $26,025 level is key to maintaining this bearish price direction. Should price move back above this level and close above this Bearish Price Trigger Level, then we would consider the trend “moderately bullish” while we wait for a new Price Trigger Level Breach to setup.
Lastly, Crude Oil. We’ve been writing to all of our followers that we felt Oil was setting up for a price rotation many weeks ago. We warned that the $65 price level may be the end of the move and that the $55 to $50 levels are the likely downside targets. The volatility range is somewhat narrow and the last Trigger Level that was breached was the Bearish Trigger Level near $68.75. Therefore, we believe the recent downside price move, below the $60 Bullish Trigger level, results in a new Bearish price trend with immediate targets near or below $50. Ultimately, the $42.40 level may be the longer term downside price target – which would coincide with a broader commodities slowdown and global economic activity contraction.
So here is what you need to know to go into this weekend and for the next 4+ weeks.
Expect the US stock market to trade in a moderately volatile sideways price channel for the next 4+ weeks.
Expect the end of this price channel to result in a “false rally” move that may push prices towards recent highs before faltering and rotating back to the downside.
Expect this END of the sideways price channel to happen sometime near mid-July or early August 2019.
Expect Gold and Oil to continue to react as “fear measures” over the next few weeks/months as global traders reposition their assets throughout this rotation.
Expect a bigger price move near late July through September~October 2019 as this volatility move really begins to take root with equities.
Follow our research and learn how we can help you stay well ahead of these price moves. We’ve just highlighted what is likely to happen over the next 30 to 60 days in this research post. Want to know how we are going to trade these moves? Join our other members to see how we create success and keep our members ahead of these big moves. Also, if you wanted me to ship you free silver rounds with a subscription to this Wealth Trading Newsletter you better join today as this offer expires June 1st.
https://thegoldandoilguy.com/wp-content/uploads/2019/05/33.png368700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-05-31 23:47:412019-05-31 23:47:41Adaptive Price Modeling Suggests Big Rotation In US Dow Stocks
After an incredible 7+week rally in Bitcoin, from $3700 to above $8000, the current price action is setting up for what may become an extended Pennant/Flag formation with quite a bit of sideways trading ahead.
Our researchers believe the past 7+ weeks rally in Bitcoin was prompted by a shift away from risk in Asia/China and into more suitable protection assets. Cryptos appear to be the easy choice for many as this rally coincided with the April 3rd through 6th US/China trade talks in Washington, DC (https://www.scmp.com/economy/china-economy/article/3004961/us-says-theres-still-significant-work-be-done-trade-talks). It appears that many investors were preparing for a difficult deadline after the March 1st deadline for a deal was pushed back. These early April trade talks may have been interpreted as a “do or die” effort from both sides. Again, shortly after the May 1st US/China trade talks in Beijing, Bitcoin began another rally from the $5200 level all the way up to the $8000 level.
Our contacts, although we admit they are fairly limited in total quantity, have stated the sentiment from locals in China are very pessimistic on the US and President Trump. A few of our contacts have recently stated they have been laid off or terminated from their jobs and, as we understand, locals have already started to react in a protectionist mode. This happens when economies contract quickly. Consumers attempt to protect their wealth and assets by moving any capital they have into something more efficient than their local markets – thus Cryptos.
This Weekly Bitcoin chart highlights areas that we believe our current support and resistance levels. The $8000~8100 level goes all the way back to the February 2018 low. This is a critical level for trading as it became a massive price support level back in 2018 – and eventually became critical resistance in July 2018. Additional resistance is found near $9900.
This Daily Bitcoin chart highlights what we believe are the current Key Highs and Key Lows that will tell us if the next phase will be a continued rally or a breakdown in price. The Key Low near $7480 must hold for any further upside price advance. If $7480 is broken, we would expect the next Key Low price to be targeted (near $6200). Otherwise, if another rally breaks out and price rallies above the Key High, then we could see an upside target range between $9200 to $9700 very quickly.
You can see from our BLUE CHANNEL levels on the lower indicator that we believe a Pennant/Flag formation may be setting up in Bitcoin right now. This type of price rotation is not uncommon after a big move like we’ve seen already and it could be a fairly wide price rotation as this sideways Pennant/Flag pattern continues. The current range between Key Highs and Key Lows is about $2000 – lots of room for trading/traders.
The key to understanding this move is the protectionist thinking of the people of China. They are very likely attempting to move their capital into something that is not Chinese Yuan based and away from traditional holdings (Gold, Real Estate, Jewelry or other assets). Eventually, we will likely see Gold/Silver follow the rally in Cryptos if fear continues to hit the markets. Cryptos, although, appear to have executed the first leg of the “fear trade” originating from the breakdown in the US/China trade negotiations.
An additional word of warning should be that any resolution to the US/China trade talks over the next 60+ days could remove any long term support for this upside move in Cryptos. Pay attention to the news cycles and what is happening in China, the EU and the rest of the world. As fast as it went up, it could easily break down as news hits.
Lots of great price action unfold to take advantage of. Subscribers just closed out a 24% winner and another 3.46% as the markets prepare for a new move. If you want my trade signals and alerts be sure to check out my Wealth Trading Newsletter.
The incredible strength of the US Dollar over the past 12+ months has put downward pricing pressure on Gold and Silver. I believe this downward pricing pressure could be muting any upside price advanced in Gold and Silver by as much as 20% to 30% or more.
The US Dollar has turned into the global “safe-haven” for international investors and foreign governments. Over the past 6 to 12 months, or more, the US Dollar has been the only fiat currency to see any strength and upward trend. All the other major global currency levels have fallen – some dramatically lower.
The EUR, GBP, AUD, CAD, and CHF have all fallen sharply over the past 6 to 12 months as the strength of the US Dollar and US Economy continued to surprise many. We’ve been calling this a “capital shift” that started back in 2015~2016 – when the 2016 US Election cycle began and China began to implement capital controls. At the same time, foreign nations such as Brazil and Venezuela began to shift into an economic abyss while the UK dealt with BREXIT negotiations. All of these external factors created an environment where the US Dollar became a global safe-haven for global investors – all of which were seeking US equities and US Dollars to hedge weakening foreign currencies and weak foreign stock market performance.
I think that the US Dollar strength, in combination with the continued foreign Gold acquisitions has amounted to a resolved “reversion” in Gold prices that could reflect a 10% to 20% price anomaly. In other words, the strength of the US Dollar has muted the advancing price of Gold by our estimates of 2x to 2.5x the strength of the US Dollar. Over the past 12 months, the US Dollar rallied from 89.42 (April 2018) to 97.92 (May 2019: current price). This reflects a 9.60% increase in the value of the US Dollar.
If my research is correct, the price of Gold should have rallied by about 18% to 26% from the April 2018 levels IF the US Dollar had not appreciated in value as it has. Therefore, the true price of Gold should be somewhere near $1600 (18% above April 2018 levels) to $1700 (26% above April 2018 levels) if we attempted to eliminate the “reversion effect” of the US Dollar strength.
We come to this conclusion by statistically analyzing the US Dollar strength after April 2018 and how Gold reacted to this strength – by falling over 12.5% from near $1350 to a level near $1170. That range of time reflected an 8% price advance in the US Dollar. Thus, a ratio of 1.5 to 1 has clearly been established within that move. More recently, from August 2018 till now, the US Dollar has rallied 1.47% while the price of Gold has rallied 8.87%. The current price of Gold is -5.60% below the April 2018 price level.
If we were to assume that the rally in the US Dollar deflated the price appreciation of Gold by nearly equal ratios, then we take the April 2018 price of Gold ($1350) and add the related price variances of Gold over this span (essentially reverting the price of Gold to April 2018 US Dollar levels : $1350 * 1.27) and we end up with $1714.50. This reflects a greater than 30% price anomaly from the current price of Gold.
We need to ask ourselves one simple question, what would it take for Precious Metals and the global stock markets to revert back to these expected price levels? Would it be a move away from the US Dollar? Would it be some shift in foreign currency valuations? Would it be a combination of factors that drive greater fear into the markets and reflect a US Dollar valuation decline? In the second part of this article, I will explore some possibilities and explain why I believe we are just days or weeks away from finding out exactly what will cause this price anomaly to revert along with my proprietary gold price cycle forecast.
I just highlighted the strength of the US Dollar in comparison to other foreign currencies and suggested this US Dollar strength may have created a “price anomaly” setup in Precious Metals – specifically Gold. I believe a very unique setup is happening in the global markets right now and that the price of Gold is substantially undervalued compared to risks that are present throughout the global economies. I believe the strength of the US Dollar has muted the upside potential of Gold by at least 20% to 30% over the past 12+ months and I believe a shift is taking place where Gold is starting to break these pricing constraints.
If the analysis is correct, I believe traders only have about 3~6+ weeks before we’ll find out why and what will cause this price anomaly to revert back to what I believe is “price normalcy”. The strength of the US Dollar, as well as the continued global “capital shift” where foreign investors are piling into the US stock market and US Dollar related investments, have continued to put incredible pricing pressures on Precious Metals. We believe this “shift” may be about to revert back to some levels of normalcy in term of Precious Metals pricing.
I believe a major Pennant/Flag formation is setting up in Gold where this price anomaly event will be resolved. This type of price anomaly reset, or reversion will prompt a massive upside price advance in Gold and Silver that will attempt to restore proper pricing levels to the Precious Metals commodities. I believe we are just weeks away from the completion of this Pennant/Flag apex/breakout event and believe the upside price targets identified align with a series of key events that are likely to unfold over the Summer months of 2019. Take a few minutes to read the recent three-part research post regarding these events and how they relate to the global stock/commodity markets here.
Our predictive modeling systems have been warning that a price advance in Gold and Silver will take place between April/May of 2019 and Aug/Sept or 2019. We are calling this the “initial upside price leg” because we believe this upside price move will be just the beginning of a much larger move higher for Precious Metals. We’ve highlighted some of the biggest concerns we currently have related to the global stock market price appreciation levels and the concerns related to the US Presidential Election cycle in precious articles – Please read them here :
We believe it is imperative to alert all investors/traders of this event and to attempt to allow all investors/traders to plan for what may become one of the biggest global stock market swings in recent history as well as one of the biggest moves in Precious Metals in history.
My proprietary cycle analysis and trade signals are suggesting a mild price recovery in Gold will prompt moderate upside pricing pressure over the next 10~20+ days. This aligns perfectly with our Pennant/Flag formation, see the previous chart. It would be expected that Gold prices would form a moderate price support level near $1270 before moving back up to the upper Pennant price channel, near $1295. Then, price should set up the “Apex Breakout” move – which will likely be a “washout-low” price rotation (somewhere near or below $1270) with a very quick reversal to the upside – breaking $1330 and rallying much higher. This type of rotation is very common and often prompts traders to jump into short positions on the “washout-low” formation before getting clobbered on the reversal/rally. Be prepared.
Lastly, we want to alert everyone to a chart we’ve been following that could become a determining factor for the future of the global stock market levels, the US Dollar and Precious Metals. The one thing we don’t want to see is a massive decline in yield in the 2 Year Treasuries. This would indicate failed growth expectations throughout the globe and, in particular, reflect concerns that the US markets could contract/decline in-line with further global market devaluations.
We’ve already been trying to warn investors that the US Presidential Election cycle will likely create a stalling price pattern in the US stock market. We’ve been warning, for the past 18 months, that Gold is setting up a massive bottom/breakout formation. We’ve recently highlighted the global concerns (Europe, China, US, and others) that may combine to create something like a “perfect storm” for currencies and the global equities markets. If that translates into “yield weakness” in the US Treasuries, think about how that would translate into the Precious Metals “reversion” that we are suggesting is only a few weeks away?
Chart courtesy of www.crescat.net
We strongly urge investors to pay very close attention to our research and prepare for this event. Yes, the Capital Shift event is still taking place and as long as nothing disrupts this shift, capital will continue to flow into the US Dollar and US Equities. Our concern is that the charts are telling us we are very near to the end of this event cycle and we are alerting all of our followers so they can prepare for this move. It may start out mildly – it may not. We do know that our predictive modeling systems are suggesting that July/August 2019 are on our radar for a major price rotation/event.
UNIQUE OPPORTUNITY
First, we typically see stocks sell-off and as the old saying goes, “Sell in May and Go Away!” which is what has been happening.
So what does this mean? It means we should start to see money flow into the safe-haven assets like the Utility sector, bonds, and most importantly precious metals. I anticipated this and our XLU utilities ETF taken with members has already hit our first profit target, and our VIX ETF trade also hit out 15% profit target and we the balance of it is still up 25% as of yesterday.
Second, my birthday was this month, and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.
For May I am going to give away and ship out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. You can upgrade to this longer-term subscription or if you are new, join one of these two plans listed below, and you will receive:
1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)
2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)
I only have 25 silver rounds I’m giving away
so upgrade or join now before its too late!
In our continued effort to help skilled traders/investors understand the future risks associated with geopolitical market turmoil, the EU Elections next week and the continued US/China trade war, this Part III of our Sector Rotation article will highlight certain sectors that we believe may continue to perform over the next 12 to 24+ months and help traders/investors survive any extended price volatility/rotation over that same time. Read Part I, and Part II.
Currently, the US stock market has weathered a bit of a jolt in terms of price rotation. After many stock indexes reached new all-time highs, the news of Iran Oil Sanctions, US/China trade talks failing and the political turmoil in DC as an incredible 2020 US Presidential election cycle heats up, investors are watching the markets for any signs of strength or weakness. Meanwhile, the US Dollar continues to strengthen against other global currencies in an incredible show of “King Dollar” strength and dominance. All of this plays into one of our favorite narratives that we started discussing over 30 months ago – the Global Capital Shift.
For those of you who remember our many articles about this global market phenomenon and the root causes of it, we’ll try to keep the following example/explanation of it fairly short. For those of you that are new to our research, please allow us to try to explain the Capital Shift event and why it is important to understand.
The Capital Shift started after the 2008-09 global credit market collapse. The US and many other nations created an easy money policy that was designed to spark investment and recovery across the globe. This easy money, at first, supported failing companies and governments in order to maintain social order and structure. After that process was completed, this capital went to work investing in under-valued global markets and assets. As prices continued to rise and the easy money policies became rooted into the social structure, the hunt for greater returns rotated throughout the planet – diving into undervalued markets and opportunities, often with no regard for risk.
After 2014, things began to change in the US and throughout the planet. The US entered a period of extended sideways trading that caused many investors to reconsider the “buy the dip” mentality. In 2014-15, China initiated “capital controls” in an effort to prevent outflows of capital from a newly rich population and corporate structure. Just before 2014, the Emerging Markets went through a period of pricing collapse which was associated with over-inflated expectations and $100+ oil. All of that started changing in 2014~2016 as Oil prices collapsed – taking with it the expectations and promises of many Emerging Market investors and speculators.
This shifting of capital in search of “returns with a moderate degree of risk” is what we are calling the “Capital Shift Event”. It is still taking place and it is our opinion that the US stock market will become the central focus of global capital investment over the next 4+ years. We believe the strength of the US Dollar and the strength of the US Stock Market/US Economy will drive future capital investment into US and other US Associated major markets in an attempt to avoid risks associated with the foreign market and currency market valuations. In other words, when the crap starts flying across the globe, cash will rush into the US and other safe-haven investments to protect real value.
Currently, the potential for another price decline in Crude Oil is rather strong with our research expecting a move back below $55 ppb over the next 4+ months. We believe a further economic contraction across the globe with a very strong potential for increased price volatility will drive Oil prices back below $55 with a very strong potential for prices to settle near $46~48 before the downward trend is completed.
The potential for some type of price contraction over the next 12+ months will be related to how the global and localized economic concerns play out over the next 24+ months. Yet, investors can prepare for these extended price rotations now by becoming aware of weakening price trends and the potential that certain sectors will likely be hit harder than others. For example, the most recent price weakness in the US stock market appears to be focused in certain sectors:
Technology, Semiconductors, Scientific Instruments, Financials, Asset Management, Property Management, Banking (Generally all over the US), Consumer Goods – Electronics, Airlines, Mail Order Services, Industrial Goods, Aerospace/Defense, Farming and Farming Supply, Medical Laboratories, Medical Appliances, Oil & Gas and others. This type of market contraction is fairly common in an early stage Commodity and Industrial economic slowdown.
The sectors that are improving over the past week are : Healthcare, Electric Utilities, Diversified Utilities, Gas Utilities, Consumer Personal Products, Consumer Confectioners, Cigarettes, Entertainment, Beverages and Soft Drinks, Meat Products, Specialty Eateries, REITS (almost all types), Credit Services, Telecom and Telecom/Communication Services.
All of these are protectionist rallies based on the US/China trade war and the market rotation away from Technology/manufacturing growth and into more consumer protectionist spending mode – where the consumer and larger firms focus on core items while expecting a mild recession within the economy. All of this is very common at this time within the US Presidential Election cycle. In fact, our researchers have shown that nearly 80% of the time when a major US presidential election is taking place, the US stock markets will decline within the 24 months prior to the election date.
The Monthly S&P heat map is not much different. It is still showing weakness where we expect and strength in sectors that have been somewhat dormant over the past 4+ years. The key to success for skilled traders is to be able to play this future price rotation very effectively as the different sectors continue to rotate headed into the 2020 US Presidential Elections and with all of the external foreign market factors taking place.
It is quite likely that the US Dollar will continue to push high, possibly well above $102, before finding any real resistance. It is very likely that most of the US stock market will fair quite well over the next 24+ months – yet we do expect some extended price rotation over this time and we believe Technology, Financials, Real estate, and Industrial/Consumer related stock sectors could take a hit over the next 16 to 24 months. These rotations are, again, common for this type of US Presidential Election cycle. Skilled traders are already aware of this cycle and have begun to prepare for this event to unfold. The unknowns of the current global market is China and the EU at present.
And with that last US Dollar chart, there you have it. Our three-part article about how the Global Capital Shift is about to intensify and continue to drive a US Sector rotation that many traders have failed to consider. The EU elections, the US/China trade wars, and the US Presidential Election event are all big factors in what we believe will drive in an increased level of uncertainty over the next 16~24 months. Additionally, we are very concerned that China is very close to experiencing what we are calling a “broken backbone” over the next 12+ months. We believe the pricing pressures in combination with a slowing economy and a consumer move into a protectionist stance could create a waterfall event in China/Asia.
Our advice for traders is to protect open long positions and to prepare for 16 to 36 months of “repositioning” of the global markets. The US elections are certain to drive an incredible range of future expectations throughout the world. Combine that with the EU elections, the BREXIT effort and the continued repositioning of US/China/Foreign market relations and we are setting up for a big shock-wave event in the near future.
Follow our research. We’ve already mapped out the next 24 to 36 months of market price activity with our proprietary price modeling tools. We believe we know what will happen over the next 24 to 36 months, we are just waiting for the price to confirm our analysis. Visit www.TheTechnicalTraders.com to learn more.
Chris Vermeulen
Technical Traders Ltd.
https://thegoldandoilguy.com/wp-content/uploads/2019/05/10.png427700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-05-21 10:53:182019-05-21 10:53:18Oil, Hot Stocks, and Currencies – Part III
Our research team, at www.TheTechnicalTraders.com, have been pouring over the charts and data to identify what is likely to happen over the next 60+ days in terms of global stock market volatility vs. the US stock market expectations. Recently, we posted a research article highlighting our Adaptive Dynamic Learning (ADL) predictive modeling system on the Transportation Index (https://www.thetechnicaltraders.com/markets-rally-hard-is-the-volatility-move-over/). This research suggests we are still going to experience increased price volatility over the next 30 to 60+ days and that price rotation may become somewhat of a normal expectation throughout the rest of 2019.
We believe the key to understanding price volatility over the next 30+ days lies in understanding the potential causes of uncertainty and capital shifts that are taking place around the globe.
Next week, On May 23~26, 2019, the European Elections take place (https://www.telegraph.co.uk/politics/0/european-elections-2019-uk-vote-date-results/). This voting encompasses all 26 EU nations where all 753 European Parliament seats may come into question. The biggest issues are BREXIT and continue EU leadership and economic opportunities for members. The contentious pre and post-election rancor could drive wild price swings in the global markets over the next 10+ days.
A tough stance between both nations, the United States and China, have left trade talks completely unresolved (https://www.reuters.com/article/us-usa-trade-china/chinas-tough-trade-rhetoric-leaves-talks-with-u-s-in-limbo-idUSKCN1SN207). At this point, the currency market is attempting to absorb much of the future expectations while the US/China stock markets react to immediate news events and perceived future economic outcomes. Overall, until this issue is resolved for both nations, the news cycles will likely drive increased price volatility across the global markets.
The US 2020 Presidential Elections are ramping up with over 24 Democratic potentials attempting to unseat President Trump. The current new from DC regarding the continued DOJ investigations and political posturing regarding Barr, Nadler and a host of other DC actors is setting up for a “cliff hanger” outcome over the next 12+ months. This will likely become one of the most hotly contested US Presidential election events in decades. The news of investigations, political corruption, and a potential US political “coup” attempt is certain to keep everyone guessing over the next 2+ years.
The markets are reacting to this volatility by attempting to adjust valuations expectations and future economic outcomes in multiple forms; currency price valuations (attempting to adjust to a shifting future economic landscape as well as to attempt to mitigate risk/capital/credit issues), Stock Market price valuations (attempting to further mitigate risk/capital and credit issues, and debt rates (attempting to effectively price risk and output expectations for the future).
Here is a map of the Currency Market over the past 12 months. We can see the dramatic shift that has taken place since the price peak in February 2018.
Overall, the US Dollar has continued to strengthen over the past 12+ months and is regaining the “King Dollar” status as the global uncertainty continue to plague foreign and EU markets. We don’t expect this to change in the near future.
Our continued research into the current price rotation in the US and global markets suggest that we are going to continue to experience moderately high price volatility across all markets over the next 30 to 60+ days – possibly well into the end of 2019. As we suggested, above, the uncertainty relating to the multiple election events and global trade/geopolitical events do not present a foundation of calm and collected future guidance. The only thing we can suggest regarding these future expectations is that the US and more mature global markets should be able to navigate these uncertain times much more effectively than emerging or “at risk” foreign markets.
Below, you will see a global Heat-Map spanning one week. Traders should take special notice that certain EU countries are surviving the recent global price rotation quite well (France, Netherlands, Switzerland, Ireland, Germany, and others). We believe this is the result of the fact that these economies are rather mature and consistent in their output and expectations. Pay attention to the South American, Asian and Caribbean nations. It would appear that a fairly strong price contraction is taking place throughout much of these nations as the focus shifts towards the more mature markets.
The following One Month global Heat-Map highlights a slightly different economic picture for some nations, yet confirms the shorter-term (weekly) trends for many others. Bermuda, Cayman, Germany, and Switzerland appear to be the Bullish Leaders over the past 30 days while the rest of the globe appears to be slipping into Bearish price trends. Canada and the UK appear moderately mixed with some green showing on the heat-map – which would be expected as both of these nations are considered mature global economies with strong economic ties to the US.
We believe the next 10~30+ days are going to be filled with moderate price volatility and we expect a setup in the global markets, near the end of June 2019, where a massive price volatility explosion may take place. This could be correlated with some trade issue, some fallout of the EU elections or some breakdown in credit/debt risks taking place between now and September 2019. We’ll go into more detail in Part II of this research post.
This is proving to be an incredible trading year for traders who follow our trade alerts newsletter.
For active swing traders, you are going to love our daily trading analysis. On May 1st we talked about the old saying goes, “Sell in May and Go Away!” and that is exactly what is happening now right on queue. In fact, we closed out our SDS position on Thursday for a quick 3.9% profit and our other new trade started Thursday is up 18% already.
Second, my birthday is only three days away and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.
Right now I am going to give away and shipping out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. I only have a few more left as they are going fast so be sure to upgrade your membership to a longer-term subscription or if you are new, join one of these two plans, and you will receive:
1-Year Subscription Gets One 1oz Silver Round FREE
(Could be worth hundreds of dollars)
2-Year Subscription Gets TWO 1oz Silver Rounds FREE
(Could be worth a lot in the future)
I only have a few more silver rounds I’m giving away
so upgrade or join now before its too late!
https://thegoldandoilguy.com/wp-content/uploads/2019/05/7.png359700adminhttp://www.thegoldandoilguy.com/wp-content/uploads/2014/11/tgaoglogo.pngadmin2019-05-20 10:07:242019-05-20 10:07:24US vs. Global Sector Rotation – What Next? Part 1
