Posts

Long-Term Predictive Software Suggests Volatility May Surge

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

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

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

SP500 INDEX – 2 MONTH LONG TERM CHART

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

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

NASDAQ 2 WEEK CHART – ADAPTIVE DYNAMIC LEARNING (ADL)

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

DOW 2 WEEK CHART – ADAPTIVE DYNAMIC LEARNING (ADL)

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

CONCLUDING THOUGHTS:

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

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

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

Fibonacci Predictive Modeling Suggests Price Volatility Will Continue

We believe price volatility may surprise many traders throughout the end of this year.  Our proprietary Fibonacci price modeling system is suggesting that price must rotate dramatically higher or lower to establish any new confirmed price trends.  The Fibonacci price modeling system can be particularly useful in determining where and when price may attempt a major future price move.  Today, we are sharing both Daily and Weekly chart highlighting our proprietary Fibonacci price modeling system for the ES and YM to help our readers and followers understand what’s in store for the US markets over the next few weeks and months. Before we get into the details be sure to opt-in to our free market trend signals newsletter

Much like many of our other proprietary price and predictive modeling systems, the Fibonacci price modeling system adapts to price rotation, trends and volatility automatically by adjusting internal factoring levels and analysis functions to adapt to changes in price range and volatility.  The process of adapting in this manner provides us with some very insightful capabilities.  Today, we are going to focus on the Daily, the shorter term Fibonacci price analysis, and the Weekly, the longer term Fibonacci price analysis, modeling system results and attempt to share our current expectations with you.

This ES Daily Fibonacci chart prompts two initial analysis insights – first, the peaks near 3025 appear to have setup a double-top pattern that should be interpreted as major resistance.  Historical Fibonacci price trigger levels setup a range in price that has proven to be a key price channel (highlighted in LIGHT BLUE).  Current price rotation suggests continued price weakness may continue – at least until price attempts to rally above 3025 and attempts to establish a new price high.  Downside price targets are near 2900, 2695 and 2610.  Rotation within the price channel could continue for a while before a new price trend is established. If you want to see more of our trading indicators and tools click here.

This Weekly ES Fibonacci price chart highlights the very wide Fibonacci price trigger levels that suggest extreme price volatility could become a major factor going forward.  The interesting facet of this chart is that Bearish Fibonacci trigger levels have been crossed over the past 12+ months whereas Bullish Fibonacci trigger levels have stayed just outside of real price levels.  This suggests that the current upside price move, over the past 7+ months, could be a pullback in a bearish price trend.  As difficult as that may be for some traders to understand at this point, the process of the Fibonacci price modeling system that adapts to price trend and rotation is designed to allow for price to determine future outcomes.  Thus, the Bullish trigger levels being far outside the upside price peaks suggests that price may be moving higher within a defined downtrend cycle – a pullback within a bearish trend.

This Daily YM chart is setup very similar to the ES Daily chart with a defined price channel established by the current Fibonacci price trigger levels (highlighted in LIGHT BLUE on this chart).  The lower price peak recently, near September 11, suggests price was unable to rally back to near previous high levels.  Technical, this can be interpreted as a Double-top and can also be interpreted as a failure to attempt to rally above 27500.  We believe the current rotation is indicative of a channel consolidation before a breakout/breakdown move.

This Weekly YM chart highlights the extended range between the Fibonacci price trigger levels and suggests the YM is setting up a bigger move in the near future.  Just like the ES chart, the YM is showing that price is stuck within a channel and that the Fibonacci price modeling system is suggesting a breakout or breakdown move is likely.  At these times, we would fall back to the Daily charts for the shorter term analysis which suggests sideways trading within a range and the potential that the bearish price trend is the more dominant bias.

We believe the US stock market could be setting up for a downside price rotation that may become very volatile over the next 2 to 3 months.  Price would have to break below recent price troughs before we could attempt to establish any new longer-term price trends.  The recent price rotation, higher highs, and higher lows, is indicative of a bullish price trend.  Although, we believe this trend may be a technical pullback of a bearish price trend.

Ultimately, price will dictate a new price trend and extended direction.  We believe any price rotation (downward) will be fairly short lived and setup a new upside price rally that will attempt to rally beyond recent price highs.  Skilled technical traders need to be prepared for extended volatility over the next 30 to 60+ days and be prepared for some big price trends.

MORE CRUCIAL WARNING SIGNS ABOUT THE US MARKETS TOPPING AND THE GOLD AND SILVER BULL MARKET

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here.

I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused mainly on the SP 500 index and the gold miners index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here.

On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis.

More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

CONCLUDING THOUGHTS:

In short, you should be starting to get a feel of where stocks are headed along with precious metals for the next 8-24 months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter.

Be prepared for these incredible 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.  You won’t want to miss this big move, folks.  As you can see from our research, everything has been setting up for this move for many months.

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.

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 starting to present themselves will be life-changing if handled properly.

FREE GOLD OR SILVER WITH MEMBERSHIP!

Kill two birds with one stone and subscribe for two years to get your FREE PRECIOUS METAL and get enough trades to profit through the next metals bull market and 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 (www.thetechnicaltraders.com) to learn how to take advantage of our members-only research and trading signals.

August 19 Price Peak Prediction Is Confirmed By Our ADL Predictive System

Our Adaptive Dynamic Learning (ADL) predictive price modeling system is one of the most unique and incredible predictive price utilities anyone has ever seen.

Over the past 24+ months, the ADL system has been able to call nearly every market rotation in the US major indexes (the ES, NQ, and YM) as well as our incredible call in Gold from October 2018 till now.  There is really nothing on the planet that can make accurate predictions for future price activity like our ADL predictive modeling tool.

Weekly chart of the NQ – NASDAQ

This Weekly chart of the NQ (NASDAQ futures) highlights the ADL predictive modeling systems results from a price peak in late April 2019.  The results consist of 52 unique price instances that make up the future predictive price levels.  This prediction suggested that price would fall to levels near $7200 by May 27, 2019, then rally from that date to a peak level near August 19, 2019.  This new August 19 peak level will likely be near $8500 – nearly +500 pts from the current price level.

Traders that have setup short positions may feel quite a bit of pressure over the next 4+ weeks as this move higher extends to align with our ADL predictive modeling system.  Overall, we believe a volatile price period in the markets may extend near this August 19 prediction where price volatility will increase and a potential for a downside price rotation may occur.

Additional ADL predictive results suggest a downside potential for price to levels near $7200 as volatility increases near August 19, 2019.  These predictions are suggesting that the key date, August 19, 2019, will likely be the peak in the price for a period of time.  The downside predictions where the price is suggested to reach $7200 indicates the range of potential volatility after the August 19 peak.

We have been suggesting that traders continue to scale back long positions before this peak is reached.  Ideally, we urge traders to pull some profits off the table and to prepare for this potential rotation in price as well as to prepare for increased volatility near or after August 19, 2019.  Our extended research suggests deeper support is found near $6700 and we believe a volatility increase could drive prices towards these levels in a reversion price rotation.

As of right now, the most logical expectation for the price is for a continued upside price bias lasting 3 to 4 more weeks reaching a price peak near August 19, 2019 – just as we originally predicted. The Fed rate cut we just talked about could be what spurs the market on for this final exhaustion rally. As we near that critical date, we expect to see increased volatility throughout the global stock market and we would expect the VIX to begin a spike move higher.

Currently, an ADL price anomaly is setting up that may prompt a quick downside move on or after the August 19 date.  It is because of this price anomaly setup that we are suggesting the bottom for the price could be anywhere between $6500 and $7200 (ADL predicted levels).  In other words, get ready for some increased volatility and a very strong potential for a price reversion to unfold.

We have seen some really strange price action in small-cap stocks this week which I will cover shortly as well, so stay tuned!

CRUCIAL WARNING SIGNS ABOUT GOLD, SILVER, MINERS, AND S&P 500

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here.

I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused mainly on the SP 500 index and the gold miners index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here.

On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis.

More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

CONCLUDING THOUGHTS:

In short, you should be starting to get a feel of where each commodity and asset class is headed for the next 8+ months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter.

Be prepared for these incredible 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.  You won’t want to miss this big move, folks.  As you can see from our research, everything has been setting up for this move for many months.

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.

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 starting to present themselves will be life-changing if handled properly.

FREE GOLD OR SILVER WITH MEMBERSHIP!

Kill two birds with one stone and subscribe for two years to get your FREE PRECIOUS METAL and get enough trades to profit through the next metals bull market and financial crisis!

Chris Vermeulen – www.TheTechnicalTraders.com

US Markets Rally Hard – Could Another Big Upside Leg Begin?

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

Adaptive Price Modeling Suggests Big Rotation In US Dow Stocks

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.

Chris Vermeulen
www.TheTechnicalTraders.com

US Increases Trade Tariffs Against China – Markets, Gold, and Silver

Today, the US increased tariffs on $200B of Chinese goods as the US/China trade deal breaks down.  China has vowed to retaliate for the move.  The past week has seen the global markets shocked by two items: Iran sanctions and US/China trade breakdown.  The markets had been expecting a US/China trade deal to be reached and optimism was quite high – hence the rally in the Chinese stock market and the rally in the US stock market.  What next?

Well, we believe this news, as well as future news that will likely hit the markets over the next 3+ months, will continue to prompt the Shake-Out we have been warning about.  Depending on how severe these news events are, the rotation in the markets could be quite severe as well.

Our recent analysis suggests that recent lows in the US stock market may be near-term support and that the US stock market may attempt to form a bottom near these lows.  Our research shows the Transportation Index is leading this move.  We believe the ORANGE Moving Average level, as well as the RED and GREY Fibonacci projection points, will act as a temporary price floor this week and next.  The YM could move lower by 100 to 200 points today, retesting these low levels, before recovering near the end of the day.

 

Gold is showing signs of a potential upside price leg in the early stages, just as we had been suggesting.  Our April 21~24 momentum base call from months ago appears to be incredibly accurate.  At this point, we are just waiting for the upside price swing to begin.  When it starts, the momentum behind this upside move will increase as it will catch the attention of many gold traders and solidify the “fear” aspect of this move.

 

Silver is still lagging behind Gold – as usual.  We continue to believe the real opportunity for a great trade lies in Silver.  The potential for a $22 o ~$28 upside price swing on a market breakdown or fear play is still very solid.  Headed into the 2020 US election cycle and with all the uncertainty in the global markets, we believe this is the “sleeper trade” of the next 16+ months.  When Gold begins to breakout to the upside, Silver should follow about 20 days later.

 

These new US trade tariffs puts pressure on China to come to the table and develop and honest deal.  This is not the old way of slow negotiations with no real consequences.  For China, the lack of access to the US market could be devastating in both the short and long run.  Skilled traders should not be overly optimistic throughout this weekend.  Protect your longs and prepare for more news over the next few weeks.  This is the type of market that will make or break many traders.

UNIQUE OPPORTUNITY ONLY IN MAY

On May 1st we talked about the old saying goes, “Sell in May and Go Away!” and that is excactly 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 a few 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 11 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 13 more silver rounds I’m giving away
so upgrade or join now before its too late!

SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!

Happy May Everyone!

Chris Vermeulen

The Shake-Out Continues – Where Is The Bottom?

Smart traders are already asking themselves “where is the bottom for this move”.  They’ve likely been through these types of rotations in market price before and understand the fundamentals of the US economy are strong enough to support further upside price activity in the near future.  The current US/China trade worries could result in a pricing disruption of 4 to 8%, seen as rotation, yet the US Fed is continuing to leave rates unchanged and most US economic numbers are still posting strong levels.

So, smart traders want to know where the bottom in the market is likely to be found and when they should start to accumulate new long positions – which is understandable.  We’re here to help.

Our proprietary Fibonacci price modeling system is one of the unique modeling tools we use to hone into any market move.  The reason for this is because it shows us so much data that we can “read into” our analysis/research.  The other reason is that it is an “adaptive learning” model – which means it continues to learn from price data and adapt its analysis of that data.

Let’s start with the Weekly YM chart.  The GREEN highlighted box on this chart shows where the past two Bullish Fibonacci price trigger levels were generated.  These, obviously, become key support levels going forward.  The narrow ORANGE box near the current peak is the resistance channel we highlighted many weeks ago that suggested a volatility rotation peak may be setting up.  We have also drawn an oblique/circle on the chart in BLUE that highlights upside Fibonacci target price levels.

It is our opinion that a further downside leg, possibly to levels below $25,000, are possible as this Shake-Out continues and as the global markets continue to revalue expectations.  We are watching the currencies very closely as the Chinese Yuan has devalued extensively over the past few days.  This US Dollar strength will keep metals fairly flat while prompting some extra stability in the US stock market over time.

 

This next chart, the NQ Weekly, shows a similar chart format to that of the YM.  Clear resistance can be seen near the recent highs and support is found near the $6600 level from previous Fibonacci Bullish Price Trigger Levels.  The NQ, being very heavily weighted in Technology and Internet stocks, may have the ability to fall the furthest within this price rotation – possibly as much as -700 to -800 pts before finding support.  Currently, a support level near $7400 is the first level we are watching.  If the NQ breaks below this level, then we could see a much bigger move to the downside unfold fairly quickly.

 

Lastly, the Transportation Index (TRAN) is showing us that the downside price move may have already reached a level that may prompt intermediate price support – or a potential base formation.  The $10,400 to $10,500 level, which was already reached, appears to be the initial support level for the TRAN.  It would make sense that the TRAN may begin to base near this level over the next few days/weeks while the US stock market attempts to hammer out a bottom.

Ultimately, the $10,000 level has proven to be very strong historical support for the TRAN.  So any breakdown in this index would immediately prompt a target level of $10,000 for the next support level.  Again, pay attention to the US Dollar and Gold as this movement continues.  Any real fear will translate into a weaker US Dollar and increasing prices in precious metals.

 

In closing, we believe the early signs of a potential price bottom are setting up right now.  This may not be the ultimate bottom, but the clear support level in the TRAN is a very good sign that the markets are setting up a support base that may prompt some sideways trading over the next few weeks as the market continues to digest all this global trade news.  A deeper “washout-low” price formation may set up in the INDU or the NQ over the next few days which means we may see a deeper price rotation before the downtrend actually ends.

Right now, pay attention to our continued research and we’ll help you find the bottom when it forms.  Our current expectations are for a continued downside price move that will establish a washout-low formation over the next 3 to 10 trading days.  We’re not out of the woods yet, but we are starting to see the early signs of price support – which means a bottom may not be too far off.

UNIQUE OPPORTUNITY ONLY IN MAY

On May 1st we talked about the old saying goes, “Sell in May and Go Away!” and that is excactly what is happening now right on queue. In fact, we closed out our SDS position today for a quick 3.9% profit and our other new trade started today is up already 10%.

Second, my birthday is only a few 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 13 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 13 more silver rounds I’m giving away
so upgrade or join now before its too late!

SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!

Happy May Everyone!

Chris Vermeulen

US/China Trade Issues Create SHOCKWAVE Around The Globe

Unless you were following our research, see below, and were already aware of the many warning signs we’ve been posting in our continued efforts to help traders and to help educate skilled investors, you were probably caught completely off guard by the news of near trade tariffs last Sunday, May 5th.  Let’s face it, the short position in the VIX was an indication that institutional and retail investors had gone “all in” on this rally and had failed to even consider anything disrupting the narrow range price rally that had been in place over the past 45+ days.  Well, all of that changed on Sunday night and many traders woke up Monday morning to the INDU down nearly -500 points.

The most incredible facet of this rotation was that the markets had already discounted the trade tariff news and began to rally almost immediately after the opening bell on Monday.  Sure, we are not out of the woods at this time with the potential for continued price volatility and price rotation, but the fact that the US stock market was capable of rallying back from a very deep opening price shows just how resilient the US stock market and the economy really are.  The issue this time, we feel, will be felt in the global market and in foreign currency rates. We’ll get into that more as we continue.

In case you missed our most recent research posts, we suggest you take a few minutes to review the following posts to bring you up to speed with our analysis/research.  Reviewing these posts may help you to better understand the rest of this article and our expectations for the next 60 to 90 days.

 

March 31, 2019: Proprietary Cycles Predict July Turning Point for Stock Market
https://www.thetechnicaltraders.com/proprietary-cycles-predict-july-turning-point-for-stock-market/

 

April 10, 2019: Intra-Day Fibonacci Modeling Shows Volatility Is About To Spike
https://www.thetechnicaltraders.com/intra-day-fibonacci-modeling-shows-volatility-is-about-to-spike/

 

April 17, 2019: US Stock Markets Setting Up For Increased Volatility
https://www.thetechnicaltraders.com/us-stock-markets-setting-up-for-increased-volatility/

 

April 22, 2019: Prepare For Unknown Price Action As New Highs Are Reached
https://www.thetechnicaltraders.com/prepare-for-unknown-price-action-as-new-highs-are-reached/

 

April 28, 2019: Markets Are Setting Up a SHAKE-OUT – Be Prepared
https://www.thetechnicaltraders.com/markets-are-setting-up-a-shake-out-be-prepared/

 

Now that we’ve covered a bit of our past research, allow me to attempt to summarize things a bit.

_ First, we continue to expect new high prices to be established over the next 30+ days.  Yes, volatility will be larger than it was 30 days ago, but we believe the “Shake-out” is just starting and we believe the US stock market will continue to push higher – at least for the next 3+ weeks.

_ Second, we are very cautious of the July/August 2019 Cycle Predictions, see above.  We believe these cycles could be a warning of a major price trend change that prompts some type of “dynamic shift” in the global markets.  Right now, it appears a “Shake-out” in China/Asia may be in play.  But we believe a bigger “Shake-out” may be brewing somewhere else in the world.

_ Lastly, we believe any top formation in the US Stock market will result in a Pennant/Flag formation, rotational top formation, that will give traders ample time to reposition their trades and reduce risks.

Just a few days ago, we posted this research to help traders understand just how close the markets are to topping and what to expect – see below.  We continue to believe this “Shake-out” is more about disrupting low volatility expectations and less about a major market top in the US stock market

 

April 30: How Close Are The Markets From Topping?
https://www.thetechnicaltraders.com/how-close-are-the-markets-from-topping/

 

The Chinese stock markets will likely continue to drop as new expectations are suddenly realized and trade issues, especially IP and future IP partnerships, become a major contention moving forward.  Every step China takes, right now, is very fragile in terms of US expectations and the ability to show the world China is willing to become a responsible player in the technology field.  If China fails to realize this, the world will clearly see that China’s intention is to take as much as they can from global technology leaders while stuffing their pockets full of foreign cash – it will not end well.

The Shockwave that has just started to unfold across the global stock market/financial world is that trade, economic expectations, and currency valuations will continue to “revalue” to address these ongoing concerns until some formal resolution works itself into place.  In the meantime, any new issues that become present could further complicate these “revaluation” efforts.  The concert just started, folks.  We have a long way to go before this is all over with.

This Weekly YM chart showing our proprietary Fibonacci price modeling system is suggesting we have a “long way to go” before we could consider any downside price rotation a major risk.  The recent price highs in this YM chart have prompted a Bearish Fibonacci Trigger Price near the December 2018 lows (see the RED line near the $21,450 level).  You might be asking, “why so low?”.  This “learning modeling system” attempts to learn from price and attempts to identify where key price levels are that MUST be reached for a confirmed trend change.  As price has continued to rotate within a very wide range over the past 7+ months, the Fibonacci modeling system is suggesting that price could fall all the way back to near the December lows WITHOUT triggering a new “long term” bearish price trend.

In other words, the current price range that would constitute “normal price volatility” is anywhere between $21,450 and $26,950.  When we said to expect increased volatility, we really meant it.  This is a $5,500 range in the YM that could become a “normal volatility zone”.

 

The NQ Weekly chart, on the other hand, is providing us a much clearer Bearish Fibonacci Trigger level, near $7,393.  Once the price is able to close below this level, then we would consider the NQ entering a new Bearish trend as long as price stays below the $7,393 level.  If it was to rally back above this level, then the trigger is negated as long as it stays above the trigger level.

Pay very close attention to the YELLOW price channels that originate back in early 2018.  Those levels are likely to play a very important role in going forward as price attempts to establish new price ranges/channels throughout this expected price rotation and volatility.

 

Lastly, we’ve been warning that the Financial Sector could come under some intense pressures over the next 5 to 16+ months as all of this “Shockwave” plays out.  The reason we believe the Financial sector is vulnerable to this crazy volatility is that the exposure to multiple levels of capital risk could complicate the long-term earnings capabilities of this sector.  Almost all of these firms are involved in Personal, Corporate/Business, Real Estate, Trade, Global financing, Currency, and Bond related business ventures.  These firms are not remotely immune to any “Shockwave” – they are located right in the Bullseye/Target zone.

We believe the XLF may come under increased pressure over the next 3~6+ weeks as the Shockwave event continues to unfold.  We believe issues with Personal/Consumer credit will be the first sign of a Shockwave event and further pressures from Corporate/Business/Global/Currencies would likely be the second shoe to drop over the next 8+ months.  We believe a rotation in the XLF to near $25 is very likely over the next 3~6 months and that this move could be the result of extended risk factors originating from the “Shockwave event” we’ve been suggesting is currently unfolding.

Skilled traders should be watching technology stocks, the NASDAQ, the INDU, the Financial Sector and commodity prices over the next 4+ months for any signs that the Shockwave event is increasing in amplitude.  Additionally, pay very close attention to how currencies are moving and where the US Dollar is moving in relation to other currencies.  Gold and Silver should also be on your radar over the next few months as well.  Lastly, prepare for the major cycle event in July/August 2019.

The past four tradings sessions with volatility has kept us busy check out our most recent index trades on the SP500

 

Our advice continues to be to look for opportunities as the volatility increases and continue to expect an upside price bias in the US stock market – at least until we have any strong evidence that price trend has changed.  Don’t buy into the doom-sayers just yet.  In our opinion, this US upside price move is not over yet.

If you want to become a technical trader and pull money from the markets during times when most others cannot be sure to join the Wealth Trading Newsletter today. Plus, for a few days only I’m giving away and shipping Free Silver Rounds to subscribers who join our select membership levels.

Chris Vermeulen
www.TheTechnicalTraders.com

 

How Close Are The Markets From Topping?

Now that most of the US Major Indexes have breached new all-time price highs, which we called over 5+ months ago, and many traders are starting to become concerned about how and where the markets may find resistance or begin to top, we are going to try to paint a very clear picture of the upside potential for the markets and why we believe volatility and price rotation may become a very big concern over the next few months.  Our objective is to try to help you stay informed of pending market rotation and to alert you that we may be nearing a period within the US markets where increased volatility is very likely.

Longer term, many years into the future, our predictive modeling systems are suggesting this upside price swing is far from over.  Our models suggest that price rotation will become a major factor over the next 12 to 15+ months – headed into the US Presidential election cycle of November 2020.  Our models are suggesting that the second half of this year could present an incredible opportunity for skilled investors as price volatility/rotation provide bigger price swings.  Additionally, our models suggest that early 2020 will provide even more opportunity for skilled traders who are able to understand the true price structure of the markets.  Get ready, thing are about to get really interesting and if you are not following our research or a member of our services, you might want to think about joining soon.

We are focusing this research post on the NQ, ES and YM futures charts (Daily).  We will include a longer-term YM chart near the end to highlight longer-term expectations.  Let’s start with the NQ Daily chart.

The NQ Daily chart, below, highlights our ongoing research, shows the 2018 deep price rotational low and the incredible rally to new all-time highs recently.  The most important aspect of this chart is the “Upside Target Zone” near the $8040 level and the fact that any rally to near these levels would represent an extended upside price rally near the upper range of the YELLOW price channel lines.  We believe any immediate price rotation may end near the $7500 level (between the two Fibonacci Target levels near $7400 & $7600) and could represent a pretty big increase in price volatility.

 

This ES Daily chart highlights the different in capabilities between the NQ and the ES.  While the NQ is already pushing into fairly stronger new price highs, the ES is struggling to get above the Sept/Oct 2018 highs and this is because very strong resistance is found between $2,872 and $2,928.  It is very likely that the price volatility will increase near these highs as price becomes more active in an attempt to break through this resistance.  It is also very likely that a downside price rotation may happen where price attempts to retest the $2,835 level (or lower) before finally pushing into a bigger upside price trend.  The Upside Target Zone highs are just below $3,000.  Therefore, we believe any move above $2,960 could represent an exhaustion top type of price formation.

 

This YM chart is set up very similarly to the ES chart.  Historical price highs are acting as a very strong price ceiling.  While the NQ is already pushing into fairly stronger new price highs, the YM continues to struggle to get above the Sept/Oct 2018 highs and this is because very strong resistance is found between 25,750 and 27,000.  Please take notice of the very narrow resistance channel (BOX) on this chart that highlights where we believe true price support/resistance is located.  We believe it is likely that a downside price rotation may happen where price attempts to retest the $26,000 level (or lower) before finally pushing into a bigger upside price trend.

 

As you can tell from our recent posts and this research, we believe price volatility is about to skyrocket higher as price rotates downward.  Our predictive modeling systems are suggesting that we are nearing the end of this current upside move where a downward price move will establish a new price base and allow price to, eventually, push much higher – well above current all-time high levels.

We’ve issued research posts regarding Presidential election cycles and how, generally, stock market prices decline 6 to 24 months before any US Presidential election.  We believe this pattern will continue this year and we are warning our followers to be prepared at this stage of the game.  No, it will not be a massive market crash like 2008-09.  It will be a downside price rotation that will present incredible opportunities for skilled traders.  If you want more of our specialized insight and analysis, then please visit www.TheTechnicalTraders.com to learn how we help our members find success.

Lastly, we’ve included this Weekly YM chart to show you just how volatile the markets are right now.  Pay very close attention to the Fibonacci Target Levels that are being drawn on this chart.  The downside target levels range from $16,000 to $21,060.  The upside target levels range from $30,000 to $32,435.  Top to bottom, The Fibonacci price modeling system is suggesting a total volatility range of over $16,000 for the YM Weekly chart and this usually suggests we are about to enter a period of bigger price rotation and much higher price volatility.

 

Right now, we suggest that you review some of our most recent posts to see how we’ve been calling these market moves, visit www.TheTechnicalTraders.com/FreeResearch/.  It is important for all of our followers to understand the risks of being complacent right now.  The markets are about to enter a period of about 24+ months where incredible opportunities will become evident for skilled traders. If you know what is going to happen, you can find opportunities everywhere.  If not, you are going to be on the wrong side of some very big moves.

Chris Vermeulen