Find Out Which ETFs Will Benefit From as a Stronger U.S. Dollar Reacts to Global Market Concerns

The recent news of Hedge Fund and other institutional crisis events has opened many eyes as investors and traders realize the post 2008-09 global market credit bubble has extended well beyond what many people may realize. 

Recent news that China offered a “deferment” for Chinese corporations and state run enterprises content with shadow banking credit/debt issues at a time when China is tightening monetary policy shows that a process, like the 2008 Lehman incident, may be setting up where institutional level credit/debt liabilities ripple through the global markets as global central banks attempt to reign in monetary policies.

This process is not likely to happen suddenly though. If this type of contraction in global monetary policy takes place, resulting in increased pressures to contain excessive credit/debt functions in the markets, then we believe the process may result in an extended 9 to 16+ months of “hit-and-miss” events leading up to a potentially bigger event. 

The Archegos Fund forced unwinding of trades hit the markets recently as a wake-up call. Prior to the Archegos event, the Greensill Capital collapse shocked the global markets because of the size and scope of this failure. Now, we see Credit Suisse issuing warnings that Q1 earnings may have taken a big hit because of exposure to the Greensill and Archegos assets – which is leading to Credit Suisse attempting to put the Gupta Trading Unit into insolvency....Read More Here.

Gold Rallies as Fear Take Center Stage

Gold has rallied extensively from the lows near $1560 over the past 2 weeks. At first, this rally didn’t catch too much attention with traders, but now the rally has reached new highs above $1613 and may attempt a move above $1750 as metals continue to reflect the fear in the global markets.

We’ve been warning our friends and followers of the real potential in precious metals for many months – actually since early 2018. Our predictive modeling system suggests Gold will rally above $1650 very quickly, then possibly stall a bit before continuing higher to target the $1750 range.

The one thing all skilled traders must consider is the longer term fear that is building in the markets. Many traders are concerned about the global economy with the Coronavirus spreading economic worries throughout Asia, Japan, and Europe. We believe this fear will push precious metals continually higher over the next 24+ months with a real upside target above $2100 eventually.

Right now, skilled traders need to understand that wave after wave of higher price rotation will continue to happen in Gold and Silver. If you missed the $1450 level and missed the $1550 level, this is your time to attempt to find your entry point near $1650 or below that level. Ultimately, real fear has yet to result in a parabolic rally in Gold and Silver – but it is likely going to happen within the next 24+ months.

As skilled traders, our Fibonacci price modeling system is suggesting that any price rotation below $1550 would be an excellent buying opportunity. These levels really depend on where the current rally ends and what happens in the global markets over the next 60+ days.

Less than 7 days ago, we published this research article suggesting that our ADL predictive modeling system was telling us that Gold would rally above $1650 within 15 to 30 days. It is very likely this rally will start a multiple leg upside price advance in precious metals where Silver will finally breach the $20 to $21 level as Gold advances higher.

February 13, 2020: Predictive Modeling Suggests Gold Will Break Above $1650 Within 15 - 30 Days

Once fear really enters the markets, we’ll see huge sector rotation and a massive price reversion event take place. Historically, Gold and Silver will react to this move, but the parabolic price move in precious metals will come 4 to 6+ months after the reversion event in the global markets. So, from a historical standpoint, any entry-level near current price levels is exceptional.

Trust us, you really don’t want to miss this next move in precious metals. Our Fibonacci price modeling system and Adaptive Dynamic Learning modeling system are suggesting price levels above $2400 as an ultimate upside price target for Gold.

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

Chris Vermeulen
The Technical Traders

2020 - A Close Look at What to Expect

Quite a bit has changed in the global markets and future expectations over the past 4+ weeks. Q4 2019 ended with a bang. U.S./China Trade Deal, U.S. signing the USMCA Continental Free Trade Agreement, BREXIT and now the Wuhan Virus. On top of all of that, we’ve learned that Germany and Japan have entered a technical recession. As Q4-2019 earnings continue to push the U.S. stock market higher – what should traders expect going forward in 2020?

Volatility, Sector Rotation, and Continued U.S. Stock Market Strength.

Our researchers have been pouring over our charts and predictive modeling tools to attempt to identify any signs of weakness or major price rotation. There are early warning signs that the US Stock Market may be setting up for a moderate downside price rotation within the first 6 months of 2020, but we believe the continued Capital Shift that has been taking place over the past 24+ months will continue to drive foreign investment into the U.S. and North American stock markets for quite a while in 2020 and 2021.

The interesting component to all of this, which should keep investor’s attention and really get them excited, is the chance that some type of foreign market disruption may take place in 2020 and 2021. There are a number of things that could potentially disrupt foreign market expectations.

First on the list is this virus event in China (that seems to be spreading rapidly). Second would be the news that Japan and Germany have entered a recession. Further down the list is the very real possibility that many Asian and foreign nations could see a dramatic decrease in GDP and economic activity throughout much of 2020 and 2021.

It is far too early to make any real predictions, but traders need to be aware of the longer term consequences of global markets entering a contraction phase related to a confluence of events that prompts central bank intervention while consumers, financial sectors and manufacturing and industrial sectors are pummeled. Imagine what the global markets would look like if 25% to 55% of Asia, Europe, and Africa see a dramatic decrease in economic output, GDP and financial sector activities (on top of the potential for massive loan defaults). It may spark another Credit Crisis Event – this time throughout the Emerging and Foreign markets.

A massive surge in U.S. stock market valuation has taken place since the start of 2020. It is very likely that foreign capital poured into the U.S. stock market expecting continued price advancement and very strong earnings from Q4 2019. This valuation appreciation really started to take place in early 2019 and continued throughout the past 14+ months. We believe this valuation appreciation is foreign capital dumping into the U.S. markets to chasing the strong U.S. economic expectations.

We believe this surge into the U.S. stock markets will continue until something changes future expectations. The U.S. Presidential election cycle would usually be enough to cause some sideways trading in the U.S. stock market – maybe not this time.

The fact that Japan and Germany, as well as China very soon, have entered an economic recession would usually be enough to cause some sideways price rotation in the U.S. stock market – maybe not this time. The potential widespread economic contraction related to the Wuhan virus would normally be enough to cause some contraction or sideways trading in the U.S. stock market – maybe not this time.

There is still a risk that price could revert to middle or lower price channel levels at any time in the future. We’ve highlighted these levels on the charts below. Yet, we have to caution traders that the foreign markets may be setting up for one of the largest capital shift events in recent history. If any of these contagion events roil the foreign markets while the U.S. economic activity and data continue to perform well, then we could be setting up for a massive shift away from risky foreign markets/emerging markets and watch global capital pour into Safe-Havens (metals/miners) and pour into the U.S. stock market (U.S., Canada, Mexico).

We’ve authored numerous articles about how the foreign markets gorged themselves on debt after 2009 while easy money policies allowed them to borrow U.S. dollars very cheaply. We’ve highlighted how this debt is now hanging over these corporations, manufacturers and investors heads as a liability. The recent REPO market activity suggests liquidity risks already exist in the global markets. If these liquidity issues extend further, we could see a much broader market rotation within the U.S. and foreign markets.

Dow Jones Industrial Average – Quarterly Chart

Currently, the U.S. stock market appears to be near the upper range of a defined price channel. Near these levels, it is not uncommon to see some downside price rotation to set up a new price advance within the price channels. This INDU chart highlights the extended price channel trend, originating from 2008, and the more recent price channel (yellow) originating from 2015. Any breakdown of these channels could prompt a much broader downside price move.

SP500 – Quarterly Chart

This SPY chart highlights the extended upside price trend in the US stock markets. The SPY has recently breached the upper price channel level. It may be setting up a new faster price channel, yet we believe this rally in early Q1 2020 is more of a reaction to the very strong 2019 US economic data and the continued capital shift pouring capital into the U.S. markets. A correction from these levels to near $275 would not be out of the question.

Transportation Sector – Quarterly Chart

This Transportation Index (TRAN) chart presents a very clear price channel and shows a moderate weakness recently in this sector. The fact that the TRAN has consolidated into a middle range of the price channel while the other US stock market indexes continue to push higher suggests the valuation advance in the U.S. stock market is mostly “capital chasing strength of the U.S. economy” than a true economic expansion event.

2020 will likely continue to see more volatility, more price rotation, more US stock market strength and further risks of a reversion event. We believe forward guidance for Q1 and Q2 will be revised lower as a result of these new global economic conditions originating from Asia, Europe, and Japan.

If the virus event spreads into Africa and the Middle East (think Belt-Road), then we could see a much broader correction event. In the meantime, prepare for weaker future earnings related to the shut down of industry and consumer sectors throughout much of Asia.

If this “shut down” type of quarantining process extends throughout other areas of the world, then we need to start to expect a much broader economic contraction event. Minor events can be absorbed by the broader markets. Major events where global economies contract for many months or quarters can present a very dangerous event for investors.

Overall, we may see another 20 to 40+ days of “sliding higher” in the U.S. stock market before we see any real risks become present for investors. This means you should start preparing for any potential unknowns right now. Plan accordingly as this event will likely result in a sudden and potentially violent change in price trend.

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

Chris Vermeulen
The Technical Traders

The Black Swan Event Begins

As the Asian markets opened on late Sunday, traders expected a reactionary price move related to the threat of the Wuhan virus and the continued news of its spread. The U.S. Dow Jones futures markets opened close to -225 points lower on Sunday afternoon and were nearly -300 points lower within the first 25 minutes of trading. Gold opened $10 higher and continued to rally to a level above $15 higher.

If this is early price activity, or a reactionary price move, related to fear of what may come, then the warnings signs are very clear that global traders and investors believe this virus outbreak may very well turn into a major Black Swan event.

Our research team believes a 5% to 8% rotation should be considered a normal reversion range where price may find immediate support and attempt to rally from these support levels. Anything beyond 10% may set up a much bigger price reversion event, something akin to a Black Swan event. Therefore, we are advising our friends and followers to take the necessary steps to protect your wealth and assets as this move continued to extend.

30 Minute YM Futures Chart 

This 30 minute YM futures chart highlights the reactionary downside price move (GAP) taking place on the open of the Asian markets. This GAP lower may be just the beginning of a much broader downside price move. We are going to have to wait and see what happens related to the Wuhan virus over the next 14+ days.

30 Minute Gold Futures Chart

Gold shot up nearly 1% in early trading on Sunday. Fear is driving investors to pile into the precious metals markets. As news of this virus continues to hit the news cycle, we expect metals will continue to push higher and higher – likely targeting the $1750 level in Gold.

If you want to see what the big money players own check out these gold charts and a very different interpretation of the gold COT Data here.

If you have not been following our research and if you have not already positioned your portfolio for this potential reversion event, then now would be a good time to start taking action. Do some research on the 1855 Third Plague Event in China where more than 15 million people died (nearly 1.25% of the total global population at the time). If those levels hold for this event, then possibly 60 to 80 million people may die over related to this event.

Crude oil is collapsing again and just his out downside target of $53. Our energy sector trade idea is up over 15% already.

Remember, all of this is speculation at this point. Yet we urge traders to act now to take action to prevent further erosion of their wealth and retirement accounts. Visit the Technical Traders website to learn how we can help you plan for these events, protect your wealth, and find great trades.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, I have a good pulse on the market and timing key turning points for both short term swing trading and long-term investment capital. The opportunities are massive/life changing if handled properly.

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

Chris Vermeulen
The Technical Traders

American Shale Oil In High Demand

The narrative a while back was that the world would face a shortage of heavy crude because sanctions on Iran and Venezuela had reduced production and exports. Some also implied that shale oil would fill up U.S. storage because American refiners were designed to process the heavy, high sulfur crudes from Venezuela, Saudi Arabia, and the like.

But the light, sweet crude is in high demand for export, and that appetite is likely to continue to grow with the implementation of IMO 2020 around the corner, going into effect January 1st. Freight rates from the U.S. Gulf to Europe have surged to record highs.

Equinor ASA and Unipec, the trading arm of China's top refiner Sinopec, have provisionally chartered Aframax tankers for $60,700 per day, an increase of almost 30 percent in a week, a new record high, according to shipbroker Poten & Partners. Aframax tankers are the “workhorse” of the U.S.-Europe oil trade, which has risen more than 60 percent in 2019 compared to 2018.

The EPIC pipeline began service in August. It has the capacity to deliver 400,000 b/d from the Permian Basin to terminals on the Gulf Coast. The new Cactus II pipeline system also started shipping crude oil in August. It has the capacity to deliver 670,000 b/d of crude oil from the Permian.

And the Gray Oak pipeline began service in November and will be capable of delivering 900,000 b/d at capacity. This new takeaway capacity will effectively reduce the production breakeven costs of substantial Permian crude oil because the pipeline charges are significantly lower than trucking costs.

This should provide stimulus to shale oil production growth, which had slowed due to takeaway pipeline capacity constraints.

Exports Rising
U.S. crude oil exports averaged 3.412 million barrels per day for the weeks ending December 13, 2019. Crude oil exports were 33 percent higher than the same weeks last year. But in the year-to-date, exports are over 50 percent higher.

Exports of crude oil and petroleum products have surged to almost 9 million barrels per day. This makes the United States the largest petroleum exporting country in the world.

Net oil imports have recently dropped below zero, making the U.S. a net oil exporter for the first time in modern history. As a result, the U.S. economy is no longer vulnerable overall to a spike in oil prices, though such a development would hurt consumers while helping domestic oil producers.

The U.S. balance of payments and trade would not be adversely impacted. This is a positive tailwind for the value of the U.S. dollar.

It also has political and defense spending implications. For example, following the attacks on Saudi Arabia in September, President Trump did not put the U.S. military at risk to defend KSA. He also did not counter-attack Iran on behalf of Saudi Arabia. The Crown Prince of Saudi Arabia reportedly began talks with Iran to defuse the situation, something the Kingdom did not have to try when the U.S. felt obligated to protect its oil supply for economic reasons.

Conclusions
The U.S. shale revolution is being re-booted by the opening up of new pipes in the second half of 2019. Given strong foreign demand and lower effective breakeven costs, a new surge may be in the works. Market observers who saw growth slowing may be in for a wake-up call over the coming six months when the new economic conditions take hold.

Check back to see my next post!

Best,
Robert Boslego
INO.com Contributor - Energies

When Crude Oil Collapses Below $40 What Happens - Part III

This, the final section of this multi-part research article, will continue our exploration of the consequences that may result from our ADL predictive modeling system’s suggestion that Oil may continue to fall to levels below $40 over the next few months.

In Part I and Part II, we’ve highlighted what we believe to be very compelling evidence that any continue oil price decline from current levels may be setting up the global markets for a massively volatile price reversion – similar to what happened in 1929.

Prior to the stock market collapse in 1929 and the start of the Great Depression, commodity prices collapsed in 1921 and again in 1930. This commodity price collapse was the result of over-supply and a dramatic change in investor mentality. The shift away from tangible items and real successful investing/manufacturing and towards speculation in the housing markets and stock market.

Today, we want to focus on some of the core elements of our current global economic structure to attempt to present any more compelling evidence of a commodity collapse event that may happen after the past 7+ years of a massive credit market expansion event. Allow us to briefly cover the events of the past 20 years.

You can get my daily market analysis articles and trade ideas by opting into my free market trend signals newsletter.

1999: the DOT COM bubble burst after a mild recession in 1993-94 and a stock market rally from 1996 to 1999

September 11, 2001: Terrorist Attack on US soil. Shocked the world and global stock markets. Sent the world’s economy into severe contraction. US Fed lowered interest rates from 6.25% to 1.0% from 2001 to 2003.

2004-06: US Fed begins raising rates from 1.0% and gradually increased rates to 5.25% in August 2006: +525%. Pushing the US credit market, and housing market, over the edge and starting the 2008 Credit Crisis.

2007-2008: US Fed lowered interest rates to near ZERO over a very short 16-month span of time as the US Credit Crisis event unfolded.

2009-15: US Fed continued to keep interest rates near zero throughout this time-frame and continued to pump capital in the global capital markets with multiple QE and debt buying events. Other global central banks followed the US lead providing additional capital throughout the global markets. This massive expansion of credit/debt over a 7+ year span of time allowed foreign nations to “binge” on cheap US and Euro credit/debt while an Emerging Market and Foreign Market recovery were taking place.

2016-2019: US Fed raised interest rates from 0.08% to 2.42% over this span of time. Pushing US Fed rates up by the highest percentage levels EVER: +3025%

This continued global cycle of “boom and bust” has wreaked havoc on global consumers and business enterprises. Over the past 20+ years, various cycles of economic appreciation and depreciation have left some people considerably better suited to deal with these cycles while others have been completely destroyed by these events. Now, it appears we are entering another period of “early warning” as global manufacturing activity, growth and economic output appears to be waning. Are we entering another period like the 1929 to 1940 period of the US where a global economic contraction resulted in a deeper economic recession/depression and took 15+ years to recover from?

The US Fed has recently started acquiring assets again – at a far greater rate than at any time since 2012. It is very likely that the US Fed is “front-running” a crisis event that is already starting to unravel again – possibly aligned with institutional banking entities and global credit/debt risks.

(Source: https://wolfstreet.com)

Chinese factory orders have continued to fall recently and the news is starting to trickle out of China that the US trade tariffs have done far greater damage than currently expected. This suggests that manufacturing, exports, and GDP for China have entered a massive decline. What happens next is that commodity prices collapse because of the lack of demand from manufacturers and consumers. (Source: https://www.yahoo.com/finance/) Chinese new loan origination rates have fallen to a 22 month “new low” – which suggests corporate and consumer borrowers are simply not willing to take on any new debt/credit at the moment. This happens when a population decides they want to “disconnect” from any economic risks and shift towards a “protectionist” process. (Source: https://finance.yahoo.com)

Recent news suggests that Chinese demand for European consumer and luxury goods has also contracted dramatically. Germany will release GDP estimates on November 14th. It is our opinion that the Chinese have already shifted into a more protectionist consumer stance and that would mean that demand for non-essential items (call them high-risk purchases) are very low at this time. If this is the case, the lack of true demand origination out of China/Asia could push much of Europe into a recession. (Source: https://www.yahoo.com/)

The last thing China would want right now is to blow the potential for any type of US/China trade deal – even if it means giving up more than they may have considered many months ago. More tariffs or any type of tit-for-tat retaliatory trade war would not be in the best interest of either party at this stage of the game. Who flinches first? The US, or China, or the rest of the world?

So, the question, again, becomes...“will a commodity collapse lead the global stock market into a prolonged period of price decline and/or a global recession over the next 10+ years?”

If so, can we expect commodities to collapse as they did after the 1929 stock market peak?

You may remember this chart from the earlier sections of this multi-part article. It highlights what happened leading up to the 1929 stock market crash and how early warning signs of manufacturing and agriculture weakness continued to plague the markets while speculation in housing and the stock market pushed certain asset values much higher near the end of the “Roaring 20s”.

Are we setting up for the same type of event right now where global trade, manufacturing, and agriculture are weakening after the 2008 Credit Crisis and we are meandering towards a repetition of the events that led to the “Great Depression”? Will commodities prices collapse to 2002 or 2003 levels for most items? Will Oil collapse to levels below $30 ppb over the next 6 to 12+ months? And what will happen to Gold and Silver throughout this time?

Can we navigate through these troubling events without risking some type of new collapse event or reversion event? Are the central banks prepared for this? Are traders/investors prepared for this? Just how close are we to the start of this type of event?

The answers lie in what we do now and how the commodities react over the next 12+ months. The one major difference between now and 1929 is that the world is far more inter-connected economically and there are more people throughout the world that have moved into the “economic class”. Thus, it is our opinion that any event that is likely to happen will be followed by a moderately strong recovery event – no matter how severe the outcome. The world is in a different place right now compared to 1929. Overall, only time will tell if our research and ADL predictive modeling system is accurate with respect to future oil prices.

We believe it is critical for all traders to understand what lies ahead and the risks involved in “playing dumb” about the current market environment. We recently authored an article titled “Welcome to the Zombie-land for investors” and highly suggest you read it. Our researchers will share this one component that should help to ease some of the stress you may be feeling right now – the most capable, secure, mature and best funded (reserves) economies on the planet will likely lead any recovery process should an event as this happen. Therefore, look for strengths in the most mature and capable economies on the planet if some new crisis event begins.

Even if a trade deal between the US and China were to happen today and eliminate all trade tariffs, would this change anything or would this simply pour fuel onto the “capital shift” fire that is already taking place with speculation reaching frothy levels?

If you want to earn 34%-50% a year return on your trading account with very few ETF trades then join us at the Wealth Building Newsletter today!


The Technical Traders

Transportation Index Warns of Trouble Ahead

Any weakness in the Transportation Index near current levels would indicate investors and traders believe the global economy may continue to contract going forward and may be an ominous sign for the global stock markets.

The Transportation Index is a measure of the current expectations related to shipping, trucking, trains and all measure of forward expectations for goods, products and raw materials to be moved across nations, seas, states, and locations. When the economy is gaining strength, we typically expect to see the Transportation Index moving higher. When the economy is weakening, we typically expect to see the Transportation Index moving lower.

Since the peak in September 2018, the Transportation Index has moved much lower to establish a base near $8625 in December 2018. After that base formed, a series of price rotations pushed the Transportation Index up to $11,148, where it peaked, then began to trail a bit lower since May 2019. Our concern is that the Support/Resistance level, highlighted by the GREEN rectangle on this Weekly chart, represents a critical historical price that must be breached before any renewed strength in the global markets will be seen.

After the G20 meeting, last weekend, and the rally in the U.S. stock market on Monday, we were a bit surprised that the Transportation Index failed to move dramatically higher following the global markets. This leads us to believe investors were taking advantage of a pricing issue related to the G20 and US/China trade war news that was not rooted in strength seen in the global economy. In other words, buy the rumor, sell the news. It would appear the rumor hit the markets Sunday in Tokyo and the news hit the U.S. markets on Monday.

We talked about the G20 meeting results and how G20 will move gold and the U.S. stock indexes.

Skilled technical traders already know we must be cautious near these current all time highs. Volatility can increase dramatically on news or other earnings data which may drive prices higher or lower over the next few weeks. As we start July (Q3) 2019, we should be preparing for earnings data to be released over the next 30+ days as well as continued news related to global trade issues. Additionally, the items which will be sold for Christmas and the holidays are already being shipped across the globe and being distributed to warehouses over the next few months prior to the start of the holiday season.

Historically, July through September are somewhat weak for the Transportation Index. Overall, the Transportation Index loses approximately 500 to 600 points over this 90 day span with a range (potentially) of over $3000 points in volatility. Bullish trending strength returns in October and November where the Transportation Index typically rallies approximately $5000 pts with a volatility range of about $7000 points. These historical trends suggest we could see quite a bit of volatility over the next 90 days with a decent chance at seeing a downward price move targeting recent December 2018 lows.

Concluding Thoughts

In previous articles, we’ve suggested a simple trade setup technique we use to identify entry and exit points – the 100% Fibonacci Extension Move. If this move holds true for the Transportation Index, then a move to levels near $8250 is about to unfold based on the move from Sept 2019 to Dec 2019. It would make sense that this move would likely happen between now and September 2019 – followed by a solid rally into the end of 2019 as our historical data suggests.

Now is the time to stay on top of these moves and to target the opportunity these bigger price rotations provide for technical traders. Simply put, we have just described a downside price move of about $2000 points in the Transportation Index followed by an upside price move of over $4000 to $5000 points. You don’t want to miss this one, folks.

I can tell you that huge moves are about to start unfolding not only in real estate, but metals, stocks, and currencies. Some of these super cycles are going to last years. Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye opener. PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short term swing trading and long term investment capital. The opportunities are massive/life changing if handled properly.

I urge you to visit my Wealth Building Newsletter and if you like what I offer, join me with the 1 or 2 year subscription to lock in the lowest rate possible, get a FREE BAR OF GOLD and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next set of crisis’.

Chris Vermeulen
The Technical Traders

Crude Oil Fails at Critical Fibonacci Level

Crude Oil recently rallied up to the $63 level and failed. This level is a key Fibonacci price level based on our proprietary adaptive Fibonacci price modeling system. It represents a Fibonacci Long Trigger Level that would suggest that a new bullish price trend could setup if and when the price of Crude Oil rallies and closes above this level.

The fact that Crude Oil rallied above this level early on Monday, May 13, and failed to hold above this level suggests this is a failed price rally and a failed attempt to rotate higher. The failure of this price move suggests that Crude Oil may fall below current support, near $61, and begin a new downside price leg over the next 10+ trading sessions.

This Daily Crude Oil chart highlights the narrow price range, between $61 and $64.75, where a range of support and resistance levels are found with our proprietary Fibonacci modeling system. The fact that this failed price rally cleared the $63 level, then fell sharply afterward suggests that support for any upside price rally in Crude Oil is very weak. We would expect the price to rotate lower and retest the $61 level before breaking this level and moving much lower to find ultimate support.

We continue to attempt to reinforce one basic Fibonacci theory price rule for all of our followers to understand: Price must ALWAYS attempt to establish new price highs or new price lows at ALL TIMES.

We want to continue to push this message out to our followers so they can begin to understand how this price theory rule actually works in real-time application. This failed attempt to break the Bullish Fibonacci price trigger level is/was an attempt to establish a new price high. Failure to establish this new price high suggests that price will attempt to establish a new price low.

This weekly Crude Oil chart highlights the key Fibonacci trigger price levels that are located in a very narrow range near $63.25. The failed move higher, suggests a new price low will be attempted and ultimate support is currently near the $52.25 level.

With the US/China trade new still hitting the news cycles, we expect some extended volatility in the markets as well as currency price fluctuations in an attempt to mitigate the trade/stock market volatility/pricing. Additionally, we expect commodity price levels to come under continued pressure for two main reasons:

A. the U.S. Presidential election cycle continue to draw attention away from economic activity, and....

B. the global economy is already showing signs of economic and manufacturing weakness.

This US/China trade issue will certainly put more pressure on commodity prices while creating a renewed level of FEAR in the markets.

As we’ve been warning everyone for the past 5+ months – get ready for some really big moves in 2019 and 2020. This type of market is a skilled traders dream come true. Big moves, big rotations, and big profits. Also, if you have not read our Recent Gold Bottom article be sure to read that now.

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 it's 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 4 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 4 more silver rounds I’m giving away ​​​​​​​so upgrade or join now before it's too late!

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

Happy May Everyone!
Chris Vermeulen

How Chinese Trade Issues Will Drive Market Trends

It is becoming evident that the US/Chinese trade issues are going to become a point of contention for the markets going forward. We’ve been review as much news as possible in an attempt to build a consensus for the future of the U.S. markets and global markets. As of last week, it appears any potential trade deal with China has reset back to square one. The news we are reading suggests that China wants to reset their commitments with the US, remove all tariffs and wants the US to commit to buying certain levels of Chinese goods in the future. Additionally, China has yet to commit to stopping the IP/Technology theft from U.S. companies – which is a very big contention for the US.

This suggests the past 6+ months of trade talks have completely broken down and that this trade issue will likely become a market driver over the next 12+ months. The global markets had anticipated a deal to be reached by the end of March 2019. At that time, Trump announced that he was extending talks with China without installing any new tariffs. The intent was to show commitment with China to reach a deal at that time – quickly.

It appears that China had different plans – the intention to delay and ignore U.S. requests. It is very likely that China has worked to secure some type of “plan B” type of scenario over the past 6+ months and they may feel they are negotiating from a position of power at this time. Our assumption is that both the U.S. and China feel their interests are best served by holding their cards close to their chests while pushing the other side to breakdown through prolonged negotiations.

Our observations are that an economic shift is continuing to take place throughout the globe that may see these US/China trade issues become the forefront issue over the next 12 to 24 months – possibly lasting well past the November 2020 US Presidential election cycle. It seems obvious that China is digging in for a prolonged negotiation process while attempting to hold off another round of tariffs from the US. Additionally, China is dealing with an internal process of trying to shift away from “shadow banking” to eliminate the risks associated with unreported corporate and private debt issues.

The limited, yet still valid, resources we have from within China are suggesting that layoffs are very common right now and that companies are not hiring as they were just a few months ago. One of our friends/sources suggested the company he worked for has been laying off employees for over 30 days now and he just found out he was laid off last week. He works in the financial field.

We believe the long term complications resulting from a prolonged U.S./China trade war may create a foundational shift within the global markets over the next 16 to 24+ months headed into the November 2020 U.S. Elections. We’ve already authored articles about how the prior 24 months headed into major U.S. elections tend to be filled with price rotation while an initial downside price move is common within about 16+ months of a major US election event. This year may turn out to prompt an even bigger price rotation.

U.S. Stock Market volatility just spiked to levels well above 20 – levels not seen since October/November 2018, when the markets fell nearly 20% before the end of 2018. The potential for increased price volatility over the next 12+ months seems rather high with all of the foreign positioning and expectations that are milling around. It seems like the next 16+ months could be filled with incredibly high volatility, price rotation and opportunity for skilled traders.

Our primary concern is that the continued trade war between the U.S. and China spills over into other global markets as a constricted price range based trading environment. Most of the rest of the world is still trying to spark some increased levels of economic growth after the 2008-09 market crisis. The current market environment does not settle well for investor confidence, growth, and future success. The combination of a highly contested U.S. Presidential election, US/China trade issues, a struggling general foreign market, currency fluctuations attempting to mitigate capital risks and other issues, it seems the global stock markets are poised for a very big increase in volatility and price rotation over the next 2 years or so.

Our first focus is on the Hang Seng Index. This Weekly chart shows just how dramatic the current price rotation has been over the past few weeks and how a defined price channel could be setting up in the HSI to prompt a much larger downside objective. Should continue trade issues persist and should China, through the course of negotiating with the U.S., expose any element of risk perceived by the rest of the world, the potential for further price contraction is very real. China is walking a very fine line right now as Trump is pushing issues (trade issues and IP/Technology issues) to the forefront of the trade negotiations. In our opinion, the very last thing China wants is their dirty laundry, shady deals and political leadership strewn across the global news cycles over the next 24+ months.

The DAX Weekly Index is showing a similar price pattern. A very clear upper price trend channel which translates into a very clear downside price objective is price continues lower. Although the DAX is not related directly to the US/China trade negotiations, the global markets are far more interconnected now than ever before. Any rotation lower in China will likely result in a moderate price decrease in many of the major global market indexes.

As we’ve suggested within our earlier research posts, U.S. election cycles tend to prompt massive price rotations when the election cycles are intense. In our next post PART II of this report, we talk about what happened in the past election cycles reviewing the monthly charts and weekly SP500 index charts which are very telling in what could be about to happen next for the stock market from an investors standpoint.

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 it's 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 7 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:

One Year Subscription Gets One 1oz Silver Round FREE (Could be worth hundreds of dollars)

Two 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 it's too late!

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

Happy May Everyone!

Chris Vermeulen
Stay tuned for PART II next!

U.S. Stock Markets Could Rally Beyond Expectations

Late Sunday afternoon, President Trump surprised the global markets with the announcement of increased trade tariffs with China relating to the ongoing trade negotiations and delayed trade talks between the two global superpowers. The global markets reacted immediately upon the open Sunday night (Asian open). The VIX short position puts quite a bit of professional traders at risk of big losses today while those of us that were prepared for an increase in volatility and price rotation is poised for some incredible opportunities.

The U.S. stock market is set up for a price move that will likely make many people very wealthy while frustrating many others over the next few months. We’ve recently posted many articles regarding the 2020 U.S. Presidential election cycle and the fear cycle that comes from these major political events. In November 2016, we remember watching Gold rally $60 early in the election night, then fall $100 as news began reporting the surprise winner. There is so much capital, and future capital expectations that ride on these election cycles – it can actually drive the markets in one direction or another.

Get Our Free Market Research Right Here

Right now, we have two things we want to alert you to regarding our proprietary Fibonacci price modeling utility. First, the current trend is Bullish and the chance of a downside price move is still valid. Remember, one of the primary price rules within Fibonacci price theory is that price must ALWAYS attempt to seek out new highs and new lows – at all times. This means that once price establishes new price highs, any failure to continue establishing new price highs, through standard price rotation, will result in its price attempting to establish new price lows.

So, as we continue with our expectations, remember that any failure of price to continue the push higher means it WILL rotate lower and attempt to establish new price lows.

Taking a look at this IWM Monthly chart shows a very clear price rotation near the end of 2018 and that the current price has yet to rally above the October 2018 highs. In this instance, we have a FAILURE to establish new price highs within the current price move. We also have a new price low established in December 2018. This high and low sets up the range of $173.99 and $125.80. Fibonacci price theory tells us that PRICE WILL attempt to establish a new price high or new price low from within this range. Therefore, the price WILL either continue to rally higher and break the $173.99 level or price WILL reverse lower, without reaching the $173.99 level and target the $125.80 level.

Our modeling system is currently telling us that price and trend is bullish and that the current price level has clearly rallied above the Fibonacci price trigger levels near $143.50. Should price rotate lower and breach these Fibonacci price trigger levels, then we would expect the price to move much lower. Right now, we don’t expect that to happen based on a strong U.S. economy, employment and earnings.

This Monthly SPX chart shows a similar setup – yet the main difference is that the current HIGH PRICES are clearly above the October 2018 previous highs. Thus, in this instance the SPX has reached “new price highs” as a component of Fibonacci price theory and, because of this fact, must continue to strive for new price highs or risk failing and rotating lower to establish new price lows.

In fact, the past three trading sessions are proprietary SP500 index trading system issued two quick winning trades for members. The two trades pulled 2.5% and 2% out of the market in less than 24 hours from the entry prices. This momentum and trend trading system are going to be a new trading weapon for us to follow and trade the markets once we implement this into the member’s area for viewing the charts and signals at any time.

Take a look at last weeks trade and today’s trade which both hit T1 (Target 1).

Take a look at the chart below then consider what that last statement really means. It suggests that we have already reached into new price high territory. Fibonacci theory suggests that “once new price highs are established, the trend MUST continue to attempt to establish new higher price highs – OR FAIL and attempt to establish a new price low. Well, a failure at this level could mean a price move all the way back towards recent lows near December 2018 – near $2346.58. Therefore, it is critical that we see other markets, like the IWM, continue to push higher in an attempt to support this broader upside price move for all the U.S. major stocks.

The most important factor going forward is to be prepared to think and react very quickly to price rotations, news, and the election cycle process. Take a look at how volatile the market has become over the past 12 months and consider the fact that we could continue to see this type of volatility in the markets for the next 15+ months – at least through the election cycle process.

Remember also that the US economy is operating on very strong fundamentals, employment, and outputs. Disruption of future expectations could lead to a massive displacement of capital in the global markets. Watch crude oil, gold, silver and other commodities for any signs of weakness. And pay attention to the levels we are suggesting in this research post. If the SPX falls below $2600 – be prepared. If the IWM falls below $142 – be prepared. Price is always seeking out new price highs and new price lows. If it can’t get one side, it will attempt to get the other.

The global market “Shake out” that we wrote about weeks ago is just starting. Our expectations are that an increase in price volatility, as well as a minor price rotation, will take place in the U.S. markets before a continued upside price bias will drive prices higher again. There are two main drivers that will become leaders of any bigger rotation in the global markets – Metals and Commodities. If we begin to see a collapse in commodity prices, pretty much across the board, while metals breakout into a rally, then we are setting up for a bigger downside price move. Until that happens, continue to expect an upside price bias to continue in the U.S. stock market.

Secondly, should a massive currency revaluation event take place, where global currencies weaken as the U.S. Dollar stays strong, then we could be setting up for a “slow unraveling” of foreign debt markets and foreign equity markets. This would be almost like a “slow bleed out” as a currency devaluation event prompt incredible pricing pressures on local foreign governments to support their economies. These devaluation events, if they happen, could prompt a hyper inflation type of event that could disrupt weaker nations to such a degree that they could weaken world leading economies that have exposure to these foreign nations – Think China/Russia.

Our advice continues to be to look for opportunities as the volatility increases and continue to expect an upside price bias in the U.S. 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 U.S. 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 @ The Technical Traders

Will Crude Oil Find Support Above $50 Dollars?

Recent global news regarding Venezuela, China, and global oil supply/production have resulted in the price of crude oil pausing over the past few weeks near $53 to $55 ppb. We believe the continued supply glut and uncertainty will result in oil prices falling, briefly, back below $50 ppb before any new price rally begins. Our researchers at The Technical Traders believe historical resistance near $54 - $55 is strong enough to drive prices lower before new momentum picks up for a renewed price rally.

Eventually, yes, oil will rally above $55 and attempt to target the $65+ price level. Yet we don’t believe that move is going to happen right now. We believe the global uncertainty, the slowing Chinese economy and the global supply glut will result in a fundamental price decrease before any momentum for an upside price move begins. Our analysis suggests a price move back below $50 ppb, likely targeting the $46 - $47 level, where basing may occur.

Uncertainty in Venezuela and other oil producing nations may result in a disruption in supply at some point in the future. We must be cautious of unknown situations that could result in dramatic price shifts. Yet, overall, with supply levels still high and slowing global economic expectations, it makes sense that oil would attempt to base and find support near recent lows – between $46 - $48.

Visit The Technical Traders here to learn how we can help you find and execute better trades in 2019. Learn how our proprietary predictive modeling systems have called these moves in the past and how our research team can assist you in finding great opportunities in the future.

Chris Vermeulen

Adaptive Dynamic Learning Predicts Massive Market Bottom

Our research team at Technical Traders Ltd. has been hard at work trying to identify if this recent downside price move is more concerning or just a rotational move. The recent global news regarding the US/China trade tariffs as well as the fallout that started nearly two weeks ago in Technology with Facebook, Snap and others has spooked the markets. Our additional research shows that China and Asia are extremely fragile at the moment and the global Central Bankers as well as the Real Estate market could be key to any future unraveling of the markets.

Yet, at this time we believe our predictive modeling systems and analytical systems are indicating a strong market recovery is just days away. As we have discussed earlier, capital is constantly searching for the safest and most reliable ROI throughout the planet at all times. We believe the current market environment will show signs that stronger, more established economies will continue to benefit from capital migration as a result of this new wave of uncertainty plays out. The US DGP growth rate over the past 2 years has been exceptional – increasing over 200% from 2015-2016 averages of 1.48%

As you might have read from our China/Asia Implosion research, there are many factors at work currently in the markets and the one thing that is a constant is consumer and debt cycles. Additionally, we have been relying on our cycle analysis, Adaptive Fibonacci modeling system and our incredible Adaptive Dynamic Learning modeling system (ADL), for much of our analysis throughout the end of 2017 and early 2018. Today, we are going to share what we believe to be one of the most amazing analytical calls of this year – a potentially massive rally in the US markets.

First, our Weekly Fibonacci modeling system is still showing strong bullish signs while indicating recent price rotation is below bearish trigger levels. Because of this last component, we are still concerned that unknown factors could derail any price recovery that our advanced modeling systems are predicting. Yet, we believe the core elements of Capital Migration and the fact that capital will chase the greatest ROI and safest environment for future liquidity and growth indicate that the US markets are the only game in town. The newly established price channel can be clearly seen in the chart below.

As we consider the fragility of the global markets as well as the potential that foreign and domestic capital will likely be migrating into the US Equity markets in an attempt to maintain ROI and liquidity that is simply unattainable in other global markets. Risks are starting to stack up in many foreign markets with Brexit, debt issues, cycle rotations and other issues. Yet, the US markets have recently been unleashed in terms of growth expectations and regulations.

This S&P Daily chart showing our ADL predictive price modeling system is clearly showing the price anomaly that is currently setting up. Prices are been pushed much lower – below our price expectations shown as DASHES on the chart. Yet we need to pay attention to the dramatic price reversal setting up to the upside. Without our ADL price modeling system and the ability to identify these types of setups, we would have little knowledge that this type of dramatic price increase is about to hit the US markets.

Additionally, when we compare the ES chart (above) to this NQ chart (below), we can see another price anomaly that is setting up in the US markets. These types of price anomalies are quite unique in the sense that they represent a price disconnect that usually results in a violent and dramatic price reconnect. In other words, when these types of price anomalies happen, price is driven outside normal boundaries of operation for periods of time, then it recovers to near the projected price levels – just like it did in early February 2018 with a dramatic downside price correction.

Lastly, this SPY chart below is confirming all of our price analysis with a very clear picture of the price anomaly that is currently setting up. External news factors have driven the current price to well below the expected ADL levels and setup what may turn out to become a Double Bottom in the process. Yet, the most critical part of all of this is the potential of a massive 10% or greater price rally over the next 3 to 10 days.

Many people simply don’t believe our ADL system can be this accurate, yet we urge readers to visit www.TheTechnicalTraders.com to review our research articles from late 2017 and early 2018 to see for yourself how well it has worked out so far. You don’t want to miss this move and what follows. This move will be a huge opportunity as our analysis is showing the potential for 8 to 12+% price advances over the next 30 to 60 days.

We are writing this message to alert all of our members and followers that we are uniquely positioned to take advantage of this move while others are preparing for the potential price decline that is evident by move traditional technical analysis modeling system. If you want to learn how to stay ahead of these moves and profit from this type of adaptive predictive price modeling, then please visit our website to learn more about our stock and ETF service for active traders and investors.

Our articles, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors to explore the tools and techniques that discretionary and algorithmic traders need to profit in today’s competitive markets. Created with the serious trader and investor in mind – whether beginner or professional – our approach will put you on the path to win. Understanding market structure, trend identification, cycle analysis, volatility, volume, when and when to trade, position management, and how to put it all together so that you have a winning edge.

GET OUR ETF ALERTS TODAY!