Should You Hedge Your Investments In Case The U.S. Defaults On Its Debt?

Get ready for a stellar interview as Chris Vermeulen gets down to business with David Lin on his new channel, The David Lin Report! Watch Today's Free Video Here

Six Key Topics Covered:

What is the stock market waiting for before finally picking a direction? Will the consolidation move to the upside? What is a short squeeze? Do news based events, such as the possibility of a US Debt Default, factor into your trades? Will a black swan event happen?

Is there a way to hedge against a potential U.S. Debt default, and is this a viable plan? How should investors work to protect their capital? Is cash a good position to take during market volatility?

At what point in Chris’ career did he settle on the style of trading he believes in and practices now? What other strategies or trading styles did he try, and what happened? When risk management is the main priority (protecting capital), and the stock market outperforms, will Chris change his strategy?

What is the price chart of bonds indicating may happen? Is it possible that they can break down as fast as they recently climbed? If people are moving out of traditional safe havens like bonds, where are they investing?

The disconnect between gold and gold miners persists. Why is this? Will it take a financial reset to align precious metals and miners again?

Do you share personal anecdotes do you share in your newly published books Asset Revesting or the Second Edition of Technical Trading Mastery? And what is Asset Revesting?

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Gold and Silver Outlook - What's The Good, The Bad, And The Ugly?

Chris sits down with Charlotte McLeod of Investing News Network, who kickstarts the session with a high level look at gold. to talk about where the markets were and where they may be going next. 

Through the lens of technical analysis, Chris & Craig discuss the answers to the following questions....Watch Here.

Where The SP500 Is Headed Next Week

Everyone wishes they knew where the stock market was going to go next. What sector is going to rally? When is the subsequent market sell off? When and where to put your money to work are the questions strive to figure out. Nothing is perfect. You cannot predict the future, but if you follow something close enough, you can get a good feeling of where it’s headed next, based on what it has recently been doing.

There are two moving averages here, the 50 day and the 20 day moving average. When the price is above these moving averages in general, and they’re sloping upwards, this means the market is most likely going to continue to trend higher.

When the price is sloping down, the price is below the moving average, and the 20 day moving average is below the 50 day, just what the market is doing this week; this tells us that there’s actually a mixed market signal. The market is struggling and in a new. As the saying goes, “the trend is your friend,” so it’s always best to trade with the market trend for the chart time frame you are following....Continue Reading Here

How To Trade When There Is Panic Selling In The Market

Straight from me to you – what you should do when panic selling hits the market. Should you follow the pack or hold firm?

As technical traders when all indicators are saying to get out of the market, then this is exactly what should be done. We do not fight a downward trend that is more likely to continue in that direction than it is to reverse. Do I like selling at a loss, of course not. But holding positions when all indicators are saying to sell is not a smart move – it’s an emotional one.

When fear hits the market and panic selling commences, yet all indicators show that the overall market remains in an uptrend, it’s best to hold on through the wave. The market will shake out those who caved to emotion and gave the sell orders to their brokers. To learn more about what to look for and how to trade when there is panic and fear....Listen to the Report Here.

Learn How to Take Advantage of Volatility And Profit From It

Volatility is the most common way to measure risk in the financial markets. While there are a plethora of methods, calculations, and derivatives to calculate volatility, they are all trying to accomplish the same goal: what is the price of a security going to do in the future? Without a crystal ball, there’s no perfect answer, but let’s go through a few common ways that we can estimate future volatility.

Let’s Talk Volatility

Generally speaking, there are two types of volatility that traders and investors use in an effort to understand risk – historical volatility and implied volatility....Continue Reading Here.

 

Utilities Continues To Rally – Is It Sending A Warning Signal Yet?

We have experienced an incredible rally in many sectors over the past 5+ months. My research team has been pouring over the charts trying to identify how the next few weeks and months may play out in terms of continued trending or risks of some price volatility setting up. We believe the Utilities Sector may hold the key to understanding how and when the US markets will reach some level of stronger resistance as many sector ETFs are trading in new all time high price ranges.

Utilities Sector Resistance at $71.10 Should Not Be Ignored

The Utilities Sector has continued to rally since setting up a unique bottom in late February 2021. A recent double top setup, near $68, suggests resistance exists just above current trading levels. Any continuation of this uptrend over the next few weeks, targeting the $70 Fibonacci 100% Measured Move, would place the XLU price just below the previous pre COVID19 highs near $71.10 (the MAGENTA Line).

My research suggests the momentum up this recent uptrend may continue to push prices higher into early May, quite possibly setting up the Utilities ETF for a rally above $70. Yet, we believe the resistance near $71.10 will likely act as a strong barrier for price and may prompt a downward price correction after the completion of the Fibonacci 100% Measured Price Move. In other words, the recent rally across many sectors will likely continue for a bit longer before key resistance levels begin to push many sectors into some sideways trading ranges....Continue Reading Here.

Latest Price Targets for Gold, Silver and Platinum

Join Chris Vermeulen as he provides an overview, chart patterns, and projected trends for the gold, silver, and platinum markets for the upcoming quarter.

Patterns always repeat. Sometimes they take months or years but they always repeat. Gold’s 8 months consolidation is nothing new when we look at 2008 where we lost 34% before bouncing off the .382 and .5 Fibonacci retracement area between $741-$650. 

We then found its next resistance at the .618 ext around $1153 before it began to scream higher to the 1 ext at over $1900 an ounce. As Rick Rule President and CEO of Sprott says, “if past is prologue” and we pull back to the same fib level as 2008, we are there right now or could go as low as $1560. But how high will it go?

Silver blasted out of its multi-year basing formation last year to around $30 an ounce before falling to a low around $22, between the .382 and .5 Fibonacci extensions. We have strong support between $20 and $21, but it is still in a strong bull flag pattern. Where will this bull flag pattern take us?

Not as many people are interested in Platinum as it has been pretty dormant after crashing in 2008, when it was at a premium to gold. The chart looks very different from Gold with more of a “random” feel. Platinum just tested its recent high in 2016 around $1200 an ounce which is bullish, however it still has a long way to go before it tests support like gold around the .382/.5 Fibonacci retracement levels.

Overall, we never know if gold, silver, platinum, or palladium will go ballistic first so it can be a good strategy to own a basket of all of them in a balanced, diversified portfolio....Read More Here.

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.

How to Spot Boom and Bust Cycles

One of the most important aspects of trading is being able to properly identify major market cycles and trends. The markets will typically move between four separate stages: Bottoming/Basing, Rallying, Topping/Distribution, and Bearish Trending. Each of these phases of market trends is often associated with various degrees of market segment trending as well. 

 For example, one of the most telling phrases of when the stock market is nearing an eventual Topping/Distribution phase is when the housing market gets super-heated. Yet, one of the most difficult aspects of this Excess Phase rally trend is that it can last many months or years, and usually longer than many people expect.

When an Excess Phase rally is taking place in the stock market, we expect to see the Lumber vs. Gold ratio moving higher and typically see the RSI indicator stay above 50. Demand for lumber, a commodity necessary for building, remodeling, and other consumer essential spending, translates well as an economic barometer for big ticket consumer spending. 

Extreme peaks in this ratio can often warn of a pending shift in consumer spending and how the stock market reacts to an Excess Phase Peak. Let’s take a look at some of the historical reference points on this longer term Weekly Lumber vs. Gold chart....Read More Here.

Are The U.S. Markets Sending a Warning Sign?

After an incredible rally phase that initiated just one day before the US elections in November 2020, we’ve seen certain sectors rally extensively. Are the markets starting to warn us that this rally phase may be stalling? We noticed very early that some of the strongest sectors appear to be moderately weaker on the first day of trading this week. Is it because of Triple-Witching this week (Friday, March 19, 2021)? Or is it because the Treasury Yields continue to move slowly higher? What’s really happening right now and should traders/investors be cautious?

The following XLF Weekly chart shows how the Financial sector rallied above the upper YELLOW price channel, which was set from the 2018 and pre COVID-19 2020 highs. Early 2021 was very good for the financial sector overall, we saw a 40%+ rally in this over just 6 months on expectations that the US economy would transition into a growth phase as the new COVID vaccines are introduced.

We are also concerned about an early TWEEZERS TOP pattern that has set up early this week. If price continues to move lower as we progress through futures contract expiration week, FOMC, and other data this week, then we may see some strong resistance setting up near $35.25. Have the markets gotten ahead of themselves recently? Could we be setting up for a moderately deeper pullback in price soon?....Read More Here.

Platinum Begins Big Breakout Rally....What Does That Mean for Investors & Traders?

If you were not paying attention, Platinum began to rally much higher over the past 3+ days – initiating a new breakout rally and pushing well above the $1250 level. What you may not have noticed with this breakout move is that commodities are hot – and inflation is starting to heat up. What does that mean for investors/traders?

Daily Platinum Chart Shows Clear Breakout Trend

First, Platinum is used in various forms for industrial and manufacturing, as well as jewelry and numismatic functions (minting/collecting). This move in Platinum is more likely related to the increasing inflationary pressures we’ve seen in the Commodity sector coupled with the increasing demand from the surging global economy (nearing a post-COVID-19 recovery). The most important aspect of this move is the upward pricing pressure that will translate into Gold, Silver, and Palladium.

We’ve long suggested that Platinum would likely lead a rally in precious metals and that a breakout move in platinum could prompt a broader uptrend in other precious metals. Now, the combination of this type of rally in Platinum combined with the Commodity rally and the inflationary pressures suggests the global markets could be in for a wild ride over the next 12 to 24+ months....Read More Here.

Mid-Caps & Transportation Show Upside Targets For Next Rally

An important technical conclusion stemming from the recent volatility spike is that prices must continue to push higher, above previous highs, in order to confirm the continued upside price expectations. 

The recent volatility spike and downside rotation in the US major stock market were big enough to reset many trending systems and prompt new upside price targets. In this research article, I will share our targets on the Mid-Caps and the Transportation ETFs to show you want we expect from the potential rally.

IWM Breakout Above $218.35 Suggest Rally is Just Starting

The IWM, the Ishares Russell 2000 ETF, Daily chart highlights the recent rotation in price and shows a Fibonacci price extension range from the late December 2020 lows to the recent late January 2021 highs. I use these Fibonacci price extensions as a means of measuring potential upside or downside price targets, which seem to be fairly accurate. Watching what happens near the 61.8% level on the chart will guide us in determining if the 100% target level will be reached quickly or after a bit of consolidation....Read More Here.

VIX and Defensive Sectors React To Perceived Trend Weakness

Since early November 2020, the VIX has continued to decline and consolidate near the 22 level. Late in December 2020 and beyond, the VIX started setting up series high price spikes – which indicates a flagging downside pattern is setting up. You can see this setup across the recent VIX highs.

Additionally, the VIX has “stepped” higher, moving from lows near 19.50 to higher lows near 21.00. This upward stepping base is indicative of a shift in volatility. My research team and I interpret this data as a sign that trend weakness is starting to build after the strong rally that initiated in early November 2020.

Although we have not seen any clear sign that the markets are about to reverse or decline, this move in the VIX is suggesting that volatility is increasing. The high price “breakout”, yesterday, in the VIX suggests a flag setup is nearing an Apex/breakout point....Read More Here.

Technology & Energy Sectors Are Hot – Are You Missing Out?

One of the biggest movers over the past few months has been the recovery of the Oil/Gas/Energy sector after quite a bit of sideways/lower price trending. You can see from this XOP chart, below, a 44% upside price rally has taken place since early November, and XOP has recently rotated moderately downward – setting up another potential trade setup if this rally continues. Traders know, the trend if your friend. Another upside price swing in the XOP, above $72, would suggest this rally mode is continuing.

Recently, we published a research article suggesting a lower U.S. Dollar would prompt major sector rotations in the US and global markets where we highlighted the fact that the Materials, Industrials, Technology, and Discretionary sectors had been the hottest sectors of the past 180 days, but the Energy, Financials, Materials, and Industrials had shown the best strength over the past 90 days....Read More Here.

U.S. Dollar Decline Creates New Sector Opportunities to Trade

The weakness in the U.S. Dollar, which initiated after the Covid-19 peak in March 2020, has entered an extended downward price trend which is nearing a key support level near 88.33. One key consequence of a weakness in the U.S. Dollar is that other foreign currencies become comparatively stronger.

This transitional currency valuation phase creates an environment where localized foreign investments may become much more opportunistic than the U.S. stock market/sectors. Simply put, foreign investors will suddenly start to realize they are losing alpha in U.S. Dollar based investments compared to stronger, foreign currency based investments over time and move their capital.

Find out what this means for the US stock markets in my latest research report....Read More Here.

Our Custom Valuations Index Suggests Precious Metals Will Decline Before Their Next Attempt to Rally

My team prepares Custom Valuations Index charts to understand how capital is being deployed in the global markets alongside U.S. Dollar and Treasury Yields. The purpose of the Custom Index charts in this article is to provide better insight into and understanding of underlying capital movements in various market conditions. 

 Recently, we discovered the Custom Index chart shares a keen alignment with Gold (and likely the general precious metals sector). Let’s explore our recent analysis to help readers understand what to expect next in precious metals.

Weekly Custom Valuations Index Chart

The first thing that caught my attention was the very clear decline in the weekly Custom Valuations Index recently, as can be seen in the chart below. The second peak on the Custom Valuations Index chart occurred on the week of August 3, 2020. Gold also peaked at this very same time. This alignment started an exploratory analysis of the Custom Valuations Index and the potential alignment with the precious metals sector....Read More Here.

Review of our recent BAN trade in SILJ

After recently closing our SILJ BAN trade, I want to take this opportunity to dissect our trade, including the process of selecting the proper exit targets and protecting capital within a trade. The BAN Trader Pro strategy incorporates these same techniques automatically within the decision making process of generating signals and taking trades.

With our recent SILJ trade, we initiated the entry on the upside breakout in price on November 5, 2020 – near $15.50. This upside breakout move prompted a new BAN trade trigger with SILJ near the top of the BAN Hotlist, suggesting further upside trending would continue.

Of course, nothing ever happens 100% as expected... like the announcement of Pfizer's vaccine being 90% effective coming out only days after making the trade! The immediate downturn in price activity resulted in our SILJ trade staying below our entry price for more than 30 days. Read on to see how we still made money on the trade....Read More Here.

Long Term Gold/U.S. Dollar Cycles Show Big Trends for Metals - Part II

In the first part of our U.S. dollar and gold research, we highlighted the U.S. dollar vs. gold trends and how we believe precious metals have recently bottomed while the U.S. dollar may be starting a broad decline. We are highlighting this because many of our friends and followers have asked us to put some research out related to the U.S. dollar decline. Back in November, we published an article that highlighted the Appreciation/Depreciation phases of the market. This past research article – How To Spot The End Of An Excess Phase – Part II – is an excellent review item for today’s Part II conclusion to our current article.

Custom Metals Index Channels & Trends

Our Weekly Custom Metals Index chart, below, highlights the major bottom in precious metals in late 2015 as well as the continued upside price rally that is taking place in precious metals. If our research is correct, the bottom that formed in 2015 was a “half cycle bottom” – where the major cycle dates span from 2010 to 2019 or so. This half cycle bottom suggests risk factors related to the global market and massive credit expansion after the 2008-09 credit crisis may have sparked an early appreciation phase in precious metals – launching precious metals higher nearly 3 to 4 years before the traditional cycle phases would normally end/reverse....Continue Reading Here.

Custom Index Charts Suggest U.S. Stock Market Ready for a Pause

Weeks after the Election Rally initiated a moderately strong upside breakout rally, our Custom Index charts suggest the US stock market may be ready for a brief pause in trending before any new trends continue. Global traders and investors jumped into the US stock market just days before the US elections expecting something big to take place. The rally that initiated just days before the US election pushed our Custom Index charts well into the upper range of the 2016 to 2018 upward sloping price channel. This suggests the US stock markets have ended the downward price reversion and are now attempting to extend into the upward price channel....attempting to resume the upward trending that started after the 2016 elections.

Weekly Smart Cash and Volatility Indexes

The Weekly Smart Cash Index, below, highlights the impressive rally recently and the upward sloping price channel that is back in play for price. The highlighted range of the upward sloping price channel is actually the lower half of the std deviation range of the 2016 to 2018 price channel. So, as of right now, the Smart Cash Index price level has yet to really breach the middle of this channel and is still only within the lower half of the channel. Still, the support near the lower boundary of this level has been retested two or three times over the past six months and held. This suggests the lower channel level (the lower heavy BLUE line) is now acting as moderate price support....Continue Reading Here.

Gold Wave Forecast - Is Gold Going to $3,750 or Higher?

Watching gold fall to recent lows over the past few weeks has been heartbreaking for gold bugs. We know the real value of precious metals has continued to be under appreciated over the past 24+ months – even though gold has rallied from $1165 to over $2085 (an incredible 79%). The recent 15% decline in gold has shaken some investors away from the longer term opportunities, so we wanted to share our research and highlight some simple Elliot Wave structures with you.

My research team and I believe the recent downward price trend in gold is an ideal setup for an intermediate wave 4 pullback of a broader wave 3 advance. In other words, we believe gold is in the midst of a broad advance cycle that may eventually push price levels to $5000 and above. But, we’ll focus on right now and what we believe is setting up from a technical analysis perspective.

The first thing to remember about Elliot Wave Analysis is that we must consider the broad market trends, the intermediate market trends, and the short term wave formations. With almost all types of technical analysis, we focus on different time perspectives of price trends and setups to help us better determine opportunities and outcomes....Continue Reading Here.