SPY Expectations for the Rest of September

Research Highlights....

* Over the past 28 years, the SPY has gained an average of 

   3.45% in 15 of those years; it has fallen by 6.42% in the 

   other 13 years. 

* The critical support level for SPY is 332.85. If the SPY finds

   support at this level then you can expect continued, 

   moderate price increases. 

* Prepare for a moderate increase in volatility for the rest of September – watch the VIX.

My research team and I have been pouring over the charts in an effort to attempt to identify any support or weakness related to the increase in volatility over the past 7+ trading days. The VIX is currently at 29.71 after reaching a high of 38.28. We believe the increased price volatility is here to stay – at least through the end of 2020. This means skilled technical traders should prepare for some potentially large and aggressive price swings over the next few weeks and months.

September 11th and Historical Price Modeling

As we come to September 11, 2020, and reflect on the 9/11 terrorist attacks, we become more centered on what really matters in life for most of us – family, friends, health, safety, and opportunity. Even though we near a potential rotation in the market, we must never lose focus on these most essential components of our lives....Continue Reading Here.

Crude Oil Breaks Lower - Sparking Fears of Another Sub $30 Price Collapse

Research Highlights....

* Breakdown in Crude Oil sparks talk of sub $30 price 

   targets. 

* Initial support likely near $32 to $33. 

* Predictive Modeling suggests deeper price lows may be 

   reached before November 2020.

Have you been paying attention to Crude Oil recently? Prices have collapsed over -15% from the recent highs near $43.78. You may remember a research article I posted originally in July 2019 suggesting a big breakdown in Crude Oil was going to take place in early 2020 and extreme volatility was likely between February 2020 and April 2020. Our researchers predicted the following within that research article:

“If our ADL predictive modeling is correct, we will see rotation between $47 and $64 over the next 3+ months before a breakdown in price hits in November 2019. This will be followed by two fairly narrow price range months (December 2019 and January 2020) where oil prices will tighten near $45 to $50. After that tightening, we believe an extremely volatile price move will happen in February through April 2020 that could see oil prices trade as low as $22 and as high as $51 over a two to three-month span.”

Then, in early March 2020, we published this follow up article on our Crude Oil predictions. Within that article, we updated our analysis to include the following statement:

“If our research is correct, Crude oil may find a bottom somewhere near $17 to $24, the potential rally back up to somewhere above $37 - 41 ppb before staging another massive selloff. The massive volatility suggested by the ADL system also suggests a broad price range over the next 60+ days.”....Continue Reading Here.

Traders Dreams Come True - Big Technical Price Swings Pending on the SP500

:

Research Highlights....

* A potentially critical price inflection point and technical

   pattern setup that has nearly completed and validated over

   the past few days, weeks, and months.

* Potential flag/pennant formation on our Custom Valuations

   Index Weekly Chart shows a possible 11% to 16% 9 or  

   more) downside price correction in SPY.

* Fibonacci Price Modeling system’s projects SPY downside

   target level near $284.50 before a bounce.

Over the past few weeks and months, my team and I have published a series of research articles suggesting the continued market melt up was driven by speculation and the U.S. Fed’s policies and support for the markets. We’ve also highlighted a number of technical patterns that have setup within various symbols that have generated strong warnings of a potential price reversal over the past few weeks. The biggest pattern has been the Head-and-Shoulders price patterns. The sudden downside price move in the NASDAQ, and other markets, last week caught many traders/investors off-guard. One day after a very strong rally in the US stock markets, the price reversed and sold-off nearly 6% – a shocking reversal of trend. Red Skys in the mornings – Sailors Take Warning....Continue Reading Here.

Silver Begins Big Upside Rally Attempt

The move we saw in Silver early this week to new 6-year high price levels, above $22.60, is quite likely the biggest upside move in Silver since the bottom in March 2020 – after the US stock market collapsed because of the COVID-19 virus event. This new rally in Silver is likely the move we’ve been suggesting to our followers relating to a series of measured upside price moves totaling approximately $5.30 in each advance.

We wrote about these measured price moves in Gold and Silver in this article – Click Here

As traders, watching bonds accelerate moderately higher as the US Dollar falls and the stock market attempts new lofty levels, we are intrigued by the move in metals because it suggests a large segment of investors believe a bubble is nearing very peak valuation levels. The only reason metals, particularly Silver, would be accelerating as it has recently is that traders have suddenly adopted a stronger demand for second stage hedging of risk....Continue Reading Here.

U.S. Stock Market Stalls Near a Double Peak

The U.S. stock market stalled early this week as earnings started to hit. A number of news and other items are pending with earnings just starting to roll in. There have been some big numbers posted from JP Morgan and Goldman Sachs. Yet, the markets have reacted rather muted to these blowout revenues.

We believe this is a technical “Double Top” set up in the making. The NASDAQ has been much weaker than the S&P and the Dow Industrials. We believe the US stock market is reacting to the reality of earnings and forward guidance after the recent rally in price levels over the past 9+ weeks. If we are correct and this Double-Top pushes price levels lower, then this technical resistance level may become the price ceiling headed into Q3 and Q4 2020.

Let's start with the E-MINI S&P 500 Weekly Chart....Continue Reading Here

Retail Traders & Investors Squeezed to Buy High Risk Assets Again

Yes, we certainly live in interesting times. This, the last segment of our multi-part article on the current Q2 and Q3 2020 US and global economic expectations, as well as current data points, referencing very real ongoing concerns, we urge you to continue using common sense to help protect your assets and families from what we believe will be a very volatile end to 2020. If you missed the first two segments of this research article, please take a moment to review them before continuing.

On May 24th, 2020, we published this research article related to our super cycle research. It is critical that you understand what is really happening in the world as we move through these major 21 to 85+ year super-cycles and apply that knowledge to the data we have presented in the first two segments of this research post. Within that article, we quoted Ray Dalio from a recent article published related to his cycle research.

That rather chilling statement suggests one thing that we all need to be aware of at this time: what the current and future economic cycles will likely present and how the world will navigate through this process of a cycle transition....Continue Reading Here

How You Can Prepare for a Bear Market/Economic Reset

Virus cases are starting to show up in other countries with Brazil spiking this week and China warning the virus is mutating quickly and in a very bad way.

We are expecting terrible retail sales for another quarter, they are currently worse than 1992, and manufacturing numbers will be horrible again as well. More negatives are starting to show up again for stock prices and investors hence the recent correction.

It does not matter what the markets do going forward. A new bull market or bear market won't catch us off gauge as technical traders. Why? Because we follow price, not predict and bet on predictions. If you want to learn how follow the markets to trade and invest with a simple step by step strategy we provide that here in this 30 page guide and show you what charts and indicators to follow.

Don't get me wrong, I would actually prefer a bear market because so much more money can be made in a short period of time, plus we would have the opportunity to re-invest our money into companies with high growth potential and dividends for pennies on the dollar.

We had a big reversal candle on the weekly chart after the stock indexes hit both price and Fibonacci resistance, and the Fed trimmed back on market stimulus last week. This is a Fed induced rally, which, if you ask me, is a dead cat bounce before things get really ugly once this bounce fizzles out.

My research team issues a major "Black Swan" warning on February 21, 2020 – just four days before the start of the current market collapse. Now, we are issuing a "bottom" call near a specific date in the future. This means incredible opportunities for skilled technical traders/investors that know how to trade in this increased volatility.

When is the bottom supposed to happen, and where will it be priced? Those answers are only available to my members as it is specialized proprietary research. Still, even if you know when and where the bottom would likely be in the markets – what would you do differently today to attempt to profit from this incredible setup?

• We called the gold bull market for nearly six months in advance last year.
• We called for $17 Crude oil four months ago.
• Recent 35% rally call, and what is next for the SP500 near term

I've been trading the markets since 1997, and I've never seen anything like what is happening right now. Sure, I've seen numerous market events where risks appeared to be excessive, and there were incredible opportunities for traders using our market research and trade signals – but nothing compares to what is happening right now.

My research team has poured through months of data and run our advanced predictive modeling systems. We've mapped out various cycle events 200+ years into the future and can identify price/trend events based on our proprietary research tools. The alignment of major super cycles, minor cycles, global economic credit expansion, and the COVID-19 virus event, has created a once in a lifetime opportunity for all skilled traders and investors. I'm simply amazed that some of the best analysts on the planet continue to miss these big setups.

The bottom will happen, and we believe we've pinpointed a date range and price for the bottom in the global markets. After that, there is a specific process that the global markets will begin that will set up a once in a lifetime opportunity for skilled traders and investors. Trust us, very few people are prepared for these super cycle events or the associated price trends that are about to unfold.

Right now is when you want to start preparing for these events and these super cycles. This is truly a once in a lifetime event if you understand what is really happening to the global markets. The opportunities for you and your family are incredible – if you know how to play these cycle events. If you don't, then you will likely experience extreme difficulty in navigating the next 15+ years successfully.

Please visit The Technical Investor to learn more about our us and our investing portfolio newsletter. We are attempting to help you create massive opportunities from these major cycle/economic events and to help you preserve and protect your wealth.

Protect and Grow Your Wealth Made Simple - Click Here

Chris Vermeulen
Chief Market Strategist
The Technical Traders

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During the March Market crash, the BEST position was cash for short term trades. EVERY asset fell in value (stocks, bonds, gold, commodities) two months ago. Only one asset rallied, guess what it was? The USD dollar (CASH), moving to USD cash, gained a whopping 11% while most indexes and sectors fell 35-80+%. All you had to do was close all positions in your portfolio, and you would have looked like a hero, and that's what I did with my account and members of my swing trading newsletter.

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Chris Vermeulen
Founder of The Technical Traders 

Three Charts Every Trader and Investor Must See

Understanding the stock market and its potential through the use of technical analysis and historical price events has been proven repeatedly to outperform all forms of fundamental trading styles. The following is a story that walks you through my experience, the shift in my mindset and how I came to the conclusion that the three charts I share in this article are critical to your understanding of to make money in today’s market!

When I first learned to trade, I got all caught up with researching companies and finding the ones with the best earnings and future growth. I did that for several years after studying and following many “professional traders” who said it was the best way to trade and invest long term. We lost our shirts during the 2000 bear market by continuing to trade on fundamentals as stocks fell in value week after week. Even the companies that showed quarterly earnings growth fell in value – none of it seemed to make any sense to me, and it was very frustrating.

Losing money when buying the best companies made no logical sense, making me step back from the markets and ask myself, ‘what am I doing wrong here‘. People today are asking themselves the same question given today’s dizzying markets:

· Telsa shares fell from $971 a share down to $347, whopping 63% drop, in only a few weeks and then rebounded again too xx

· Netflix is down 30%, even though people are stuck at home desperately trying to find things to watch)

· Amazon has fallen 26% in the past couple of weeks despite soaring demand for their delivery services

· GDXJ, the gold miners sector that is typically a safe haven during times of volatility, crashed 57% even though gold is usually a safe haven during times of volatility.

So, what was I doing wrong? I started calling and visiting traders who were making money during the bear market to see what they were doing, and 100% of them were doing the same thing – Trading with Technical Analysis. I wasn’t doing anything wrong, per se. I was simply using the wrong tools and analysis for success!

What is Technical Analysis? In short, it’s the study of price, time, and volatility of any asset using price charts and indicators. Traders use technical analysis to find cycles and patterns in the market and trade on the analysis of preferred indicators as opposed to the fundamentals of a company and/or the economy in general.

When you start studying technical traders, you will notice every trader has a particular time frame, a preferred set of indicators, and trading frequency that fits their unique personality and lifestyle. Their brains can see the charts in ways you and I may not see them to predict future price direction over the next few hours, days, weeks, or months ahead. I quickly learned there are infinite ways to trade using technical analysis.

I was very surprised by how much these pro traders allowed me. While standing over their shoulders, I was looking at their charts to try to divine their high-level strategies and learn how they think, analyze, and trade. It was amazing how different each of them traded the market. Some traded currencies; others traded stocks, indexes, options, futures, etc. Most were day traders, swing traders, or a mix of the two. But none of them gave me their secret sauce. That is why I turned 100% of my focus to technical analysis. I was excited at the prospect of being able to profit from both rising and falling prices and no concern for anything other than price action reduced my research time dramatically. It was and is the biggest AH-HA moment of my life and a turning point for my career as a trader.

The year was 2001, when I made the shift to technical analysis. I unsubscribed from everything fundamental based. I canceled my CNBC, stopped listening to news, and stopped reading other people’s reports altogether. My goal was to create my own technical trading strategy that best suited my personality and lifestyle. I would have to discover the securities I was most comfortable trading, the frequency I would trade, and the type and amount of risk I was prepared to take.

I traded options, covered-calls, currencies, stocks, ETFs, and futures. From day trading to position trading (holding several months), I tried it all, hoping something would click for me to pursue at a much deeper level. Day trading, momentum, and swing trading were my sweet spots. Having three of them was a bonus as I know some traders only ever master one in their lifetime if they are lucky. I grew a liking for trading the major indexes like the DJIA, S&P 500, and Nasdaq… great liquidity with big money always at play.

Along my journey, I realized that if I could predict the overall market trend direction for the day or week, then I could day trade small cap stocks in the same direction as the index, knowing 80+% of the stocks follow the general stock market trend. I could generate much larger gains in a very short period of time. As time went on, I became comfortable predicting, trading, and profiting from the indexes, and my new trading strategy began to emerge.

I was fortunate enough to start learning about the markets and trading in college with a $2,000 E-Trade account, and then retiring (kinda) in 2009 at the age of 28. I built my dream home on the water, bought cars and boats, and spent time traveling with my growing family. I love trading and sharing my analysis with others – it is better than I had ever imagined and why I continue to help thousands of traders around the world every day with these video courses Trading System Mastery, and Trading As Your Business.

I contribute 100% of my trading success and lifestyle to the fact that I embraced technical analysis, where my strategy involves nothing more than price movement, position-sizing, and trade risk management techniques. All these allow me to easily reduce exposure, drawdowns, and losses with proper position sizing and protective strategies. If you want quick and simple, read about my journey and core trading tools in my book Technical Trading Mastery – 7 Steps to Win with Logic. My strategy is represented by human psychology and historical trading, as expressed in the three charts below.

Chart 1 – Human Psychology is What Drives Price Action

This chart is my favorite as it explains trader and investor psychology at various market stages. It also includes a simplified market cycle in the upper right corner, letting you know where the maximum financial risk is for investors and the highest opportunity for a trade.

Chart 2 – 2000 Stock Market Top & Bear Market That Followed

The chart may look a little overwhelming, but look at each part and compare it to the market psychology chart above. What happened in 2000 is what I feel is happening this year with the stock market sell-off.

In 2000, all market participants learned of at the same time was that there were no earnings coming from their darling .com stocks. Knowing they were not going to make money for a long time, everyone started selling these terrible stocks, and the market collapsed 40% very quickly.

What is similar between 2000 and 2020? Simple really. COVID-19 virus has halted a huge portion of business activity, travel, purchases, sporting events, etc. Everyone knows earnings are going to be poor, and many companies are going to go bankrupt. It is blatantly clear to everyone this is bad and will be for at least 6-12 months in corporate earnings; therefore, everyone is in a rush to sell their stock shares and are in a panic to unload them before everyone does.

Chart 3 – The 2020 Stock Market Top Looks to Be Unfolding

As you can see, this chart below of this year’s market crash is VERY similar to that of 2000 thus far, it’s based on a similar mindset, which is the fear of losing money, which causes everyone to sell their positions.

I am hopeful that we get a 25-30% rally from these lows before the market starts to fall and continue the new bear market, which I believe we are entering. Only the price will confirm the direction and major trend to follow, and since we follow price action and do not pick tops or bottoms, all we have to do is watch, learn, and trade when price favors new low risk, high reward trade setups.

It does not matter which way the market crashes from here, we will either profit from the next leg down, or will miss/avoid it depending on if we get a tradable setup. Either cause is a win, just one makes money, while the worst case scenario just preserves capital in a cash position, you can’t complain either way if you ask me.

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

Concluding Thoughts

In short, is if you lost money during the recent market crash, then you likely have not mastered a technical trading strategy and do not have proper trade management rules in place. All traders must manage risk and trades to be sure you lock in profits and limit losses when prices start pullback or collapse. Without either of these, you will not be able to achieve long term success/gains, and that’s a fact.

While we can all make money during a bull market when stocks are rising, if you cannot retain or grow your account during market downturns, then you may as well be a passive buy and hold investors. You are better at riding the emotional investor rollercoaster without wasting your time and effort as a trader if you are not going to spend the time and money to learn to follow someone to become a successful trader. Without proven trading strategies or someone to follow, you are more likely to underperform a long term passive investor.

I get dozens of emails from people every week trying to trade this wild stock market and use leveraged ETFs, which doing so during these unprecedented market conditions is absolute craziness if you ask me.

These people think that because there are big moves in the market, they should be trading. That big money should be made trading them, which drives me crazy because it could not be further from the truth unless you are a scalp or day trader. To me, in this market condition, it’s about preserving capital, not risking it, in my opinion.

A subscriber to my market video analysis and ETF trading newsletter said it perfectly:

“Always intrigues me how many amateur surfers get to the north shore beaches in Hawaii, take one look at monster waves and conclude it’s way too dangerous. Yet the amateur trader looks at treacherous markets like these and wants to dive right in!!” Richard P.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over we profited from the sell off in a very controlled way.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts, visit my ETF swing trading visit my website at The Technical Traders.

Chris Vermeulen
Founder of The Technical Traders 

Revisiting Our July 2019 Crude Oil Predictions & Our 2020 Forecast

When it comes to our Adaptive Dynamic Learning (ADL) predictive modeling system, we get asked questions from our friends and followers about how it could predict a virus event or how it could predict a price event so far out into the future. The truth of the matter is the ADL predictive modeling system doesn’t predict unknown virus, banking or other types of events.

What it does do, quite well we might add, is identify historically accurate price events (almost like unique DNA markers) and attempts to identify future price events that align with recent price bar (DNA) setups. In other words, it maps the markets highest probability outcomes by studying past price activity and using a unique DNA like mapping system. Once this analysis is complete for any chart, we can ask it what is likely to happen in the future.

On July 8, 2019, our researchers did exactly that and posted an article regarding our findings that many people continue to write us about. Some, at first, in total disbelief that Crude Oil could fall to levels below $40 ever again and others that wanted to know how we came up with these numbers. We set our ADL system to show us what is expected on a Monthly Crude Oil chart going forward and it draws the likely outcome and volatility (highs & Lows).

Here is a link to the original article....Just Visit Here

This Screen Capture From The Original July 2019 Article Clearly States

If our ADL predictive modeling is correct, we will see rotation between $47 and $64 over the next 3+ months before a breakdown in price hits in November 2019. This will be followed by two fairly narrow price range months (December 2019 and January 2020) where oil prices will tighten near $45 to $50. After that tightening, we believe an extremely volatile price move will happen in February through April 2020 that could see oil prices trade as low as $22 and as high as $51 over a two to three-month span.

The most critical component of this early research is the statement we have timed perfectly with our system was “we believe an extremely volatile price move will happen in February through April 2020” and the following price predictions.

The ADL predictive modeling system provided us with a hint that volatility would skyrocket throughout this time in Crude Oil. And, as we all know, this next Daily Crude Oil chart highlights the incredible collapse from early January 2020 (near $65.00) to levels just below $50 in early February. After that, the high price level was near $54.50 and the current low price level is $27.34. We believe this downward price rotation in Crude Oil completely validates our earlier ADL predictive analysis.

Imagine having this type of forecast for our trading and investing! Be sure to opt-in to our free market trend signals newsletter before closing this page so you don’t miss our next special report!

What's Next With The Price of Crude Oil?

Based on short term Fibonacci price momentum targets we could see fall as low as $17 per barrel, but this price target will change dramatically over the next few days depending on if oil bounces higher from here it is now.

If our research is correct, Crude oil may find a bottom somewhere near $17 to $24, the potential rally back up to somewhere above $37 - $41 ppb before staging another massive selloff. The massive volatility suggested by the ADL system also suggests a broad price range over the next 60+ days.

Thus, we believe crude oil will attempt to form a bottom below $30, then attempt a brief rally to “fill the gap” (or partially fill the gap). After that, supply side economics will take over and crude oil should begin to move back towards the to $30 price level again – just as our ADL predictive modeling system suggested.

As of today, we are getting dozens of emails asking about what we see for the US major markets and global markets with our systems. Everyone wants to know “what’s next?”. Most of that research is delivered to our active subscribers/members and you can gain access to that information simply by visiting my website. You really don’t want to miss these next huge moves.

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 short term swing traders.

Visit my ETF Wealth Building Newsletter and if you like what I offer, and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
The Technical Traders

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

Energy Continues Basing Setup - Next Breakout Expected Near January 24th

After watching crude oil fall from the $65 ppb level to the $58 ppb level (-10.7%) over the past few weeks, we still believe the energy sector is setting up for another great trade for skilled investors/traders.

We are all keenly aware that winter is still here and that heating oil demands may continue to push certain energy prices higher. Yet winter is also a time when people don’t travel as much and, overall, energy prices tend to weaken throughout Winter.

Over the past 37 years, the historical monthly breakdown for crude oil is as follows....

December: Generally lower by -$0.33 to -$0.86. Averages to the downside: -3.65 to +3.08
January: Generally lower by -$4.57 to -$6.72. Averages to the downside: -2.68 to +2.27
February: Generally higher by +$8.41 to +13.73. Averages to the upside +3.07 to -2.54
March: Generally higher by +7.33 to +$15.62. Averages to the upside by +2.84 to -2.14

Over the past 25 years, the historical monthly breakdown for natural gas is as follows....

December: Generally lower by -$2.34 to -$5.26. Averages to the downside: -0.81 to +0.69
January: Generally lower by -$5.14 to -$7.97. Averages to the downside: -0.69 to +0.45
February: Generally lower by -$1.48 to -$3.62. Averages to the downside -0.50 to +0.49
March: Generally higher by +0.63 to +$1.88. Averages to the upside by +0.41 to -0.70

Over the past 35 years, the historical monthly breakdown for heating oil is as follows....

December: Generally lower by -$0.16 to -$0.37. Averages to the downside: -0.14 to +0.09
January: Generally lower by -$0.52 to -$0.96. Averages to the downside: -0.09 to +0.10
February: Generally higher by +$0.48 to +$1.06. Averages to the upside +0.11 to -0.08
March: Generally higher by +0.03 to +$0.11. Averages to the upside by +0.09 to -0.10

This data suggests an extended winter in the U.S. may prompt further contraction in certain segments of the energy sector that may prompt an exaggerated downside price move in crude oil and natural gas. heating oil may rise a bit if the cold weather continues well past March/April 2019.

Conversely, if an early spring sets up in the U.S., then crude oil may begin to base a bit as people begin to traveling more, but heating oil and natural gas may decline as cold weather demands abate.

Heating oil has almost mirrored crude oil in price action recently. Our modeling systems are suggesting that crude oil may attempt to move below $40 ppb. This move would be a result of a number of factors – mostly slowing global demand and a shift to electric vehicles. We authored this research post early in January 2020 – please review it.

January 8, 2020: Is The Energy Sector Setting Up Another Great Entry?

We believe any price level below $40 in ERY is setting up for a very strong basing level going forward. We have identified two “pullback zones”. The first is what we call the “Deep Pullback Zone”. The second is what we call the “Deeper Pullback Zone”. Any upside price move from below $40 to recent upside target levels (above $50) would represent a 25%+ price rotation.

Historically, February is a very strong month for ERY. The data going back over the past 12 years suggests February produces substantially higher upside price gains (+1899.30 to -394.28) – translating into a 4.8:1 upside price ratio over 12 years. Both January and March reflect overall price weakness in ERY over the past 12 years. Thus, the real opportunity is the setup of the “February price advance”.

We believe any opportunity to take advantage of this historical technical price pattern is advantageous for skilled traders/investors.

This is a pure technical pattern based on price bar data mining. This is something you may not have ever considered unless you had the tools to search for historical price anomalies and rotation patterns. We have created a suite of tools and price modeling systems we use to help our members find incredible opportunities – this being one of them.

Get ready, February will likely prompt a very nice rally in ERY if historical price triggers confirm future price activity. The price pattern in February suggests a large upside price move is likely in ERY and we believe these low price basing patterns are an excellent opportunity for skilled traders.

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

Seven Year Cycles Can Be Powerful and Gold Just Started One

Our research and predictive modeling systems have nailed Gold over the past 15+ months. We expected Gold to rally above $1750 before the end of this year, but the global trade wars and news cycles stalled the rally in Gold over the past 2 months. Now, it appears Gold is poised for another rally pushing much higher.

But wait, if you’re thinking I’m just another one of those traders who is always bullish on gold, just know I have been telling the truth about where gold was headed (lower) for years, but finally, the tide has changed!

Gold broke down from a bull market in 2012/2013 – nearly 7 years ago. Now, Gold has broken resistance near $1375 and is technically in a full fledged Bull Market. The importance of this is the seven year cycle and how the rotation in Gold, between the high near $1923 and the low near $1045 represent an $878 price range. The upside (expansion) rally in Gold may very well move in expanding Fibonacci price structures – just like it did in 2005 through 2012. If this is the case, then we may expect to see an ultimate peak price in Gold well above $3500.

The rally that started in the last 2015 and ended in July 2016 totaled +$331.1 (+31.67%). The next price rally that started in August 2018 and ended in September 2019 totaled +$399.4 (+34.22%). If we take the current rally range (399.4) and divide it by the previous rally range (331.1), we end up with an expansion range of 121%. The two unique rallies that happened just before the 2009 parabolic rally in Gold represented (+315.8: 2006) and (394.8: 2008). The ratio of these two rallies is 125%. Could Gold have already set up for another parabolic rally well beyond the $1923 target level?

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Monthly Price of Gold Chart – Bull and Bear Market Trends

Our research team believes Gold has already entered a technically valid Bullish Market trend. We believe Gold miners will follow higher as Gold begins this next move higher. The reason we have not engaged in Miners, yet, is because we have not received any technically valid signals related to the Gold miners indicating they have also entered a new Bullish Market trend.

Gold is the safe haven for the global market. It is a store of value and offers price appreciation when the global market risks are excessive. Because of this, the sentiment across the global markets appears to be weakening in regards to forward expectations and valuation appreciation within the investment/asset classes. If Gold continues to rally higher, consider it a strong indicator that the foundation of the global market valuation levels is weakening considerably.

U.S. Dollar Will Start to Support Higher Gold Prices

Should the U.S. Dollar retrace lower, Gold will see a price increase based on the renewed weakness of the U.S. Dollar. This would also assist in re-balancing global trade and economic issues with the US Dollar moving moderately lower as weakening global markets contract.

Gold Mining Stocks – Monthly Chart

Miners are set up much like Gold was in early 2018. Resistance has been set up with multiple price tops and any momentum rally above this level would technically qualify as a new Bullish Market trend for miners.

At this point, we believe the bottom in miners has already formed and we are simply waiting for the qualifying technical confirmation of the bullish trend to begin. Jumping into this trade too early could result in unwanted risks as the price could still waffle around within the Stage 1 Base range.

If you want to learn more about market stage analysis I will be covering it a new article shortly. Once you grasp the basic concept you will see these stages on every chart no matter the time frame and know when to focus on trading and when to ignore the charts.

If you like new fresh big trend trades then check out this real estate article I just posted and how the real estate ETF could allow your to profit from home prices but you don’t even need to own or buy a home!

Concluding Thoughts

The recent weakness in the US and global markets has prompted a moderately solid upside move in Gold and Silver over the past few days. We still need to see a Gold move above recent resistance to qualify as a new upside rally though. Miners are set up for a breakout technical move which we must also wait for. We believe these two may move somewhat in unison if the global markets continue to contract throughout the end of 2019 and into 2020.

Stay tuned for more updates and alerts when all these key sectors and asset classes start new trends because that is when you want to get involved for immediate oversized gains. See my stock, index, and commodity trade alerts here.

Chris Vermeulen
The Technical Traders

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.

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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

Where is the Top for Natural Gas?

We wrote a very telling research article on October 24th, 2019. We never published it because we had other articles scheduled to be published over the next few weeks in the queue and because our subscribers get our trade alerts before the general public. At this point, we are sharing that past article as well as some current research for Natural Gas that should be very interesting to you.

Pay very close attention to the original October 24th article, below, and our prediction that the $2.75 to $2.85 level would be a likely target for the upside price rally from the basing level below $2.30. Currently, Natural Gas is trading at $2.87 – reaching our initial target level.

If our research is correct, strong demand and limited supply globally may push Natural Gas well above the $3.20 to $3.40 level after a very brief pause happens near $3.00. In fact, Natural Gas may be getting ready to rally past 2018 highs ($4.93) if the situation presents itself for such an incredible price rally. What would it take for a rally like that to happen? Much stronger demand for natural gas because of an early, extreme winter and extended global demand.

Price reacts to supply/demand imbalances. In this case, if the demand far exceeds the supply capacities headed into the end of 2019, we could easily see Natural Gas rally above $4.00 very quickly. Could it rally even higher and take out the $5.00 level? Absolutely it could if the proper dynamics continue related to supply and demand globally.

Current Daily Natural Gas Chart

Remember to read the link from October 5th. We’ve been warning of this move for more than 60+ days and have authored multiple research posts attempting to keep our followers aware of this setup. This trade setup was telegraphed for us many months ago. All you had to do was follow our research and stay aware of the trends as this momentum base setup in October near $2.25.

Natural Gas moved higher by nearly 2% on October 24th as our researchers predicted nearly a month ago. This incredible momentum base below $2.30 seems to be a very strong support level for Natural Gas. We believe this next rally may be bigger than the last rally which reached a high near 2.70. Our Fibonacci price modeling system is suggesting a target price of $2.95 to confirm a new upside price trend. This means the price would have to rally more than +26.5% from current levels to confirm a potentially much bigger upside price move. Can you imagine seeing Natural Gas climb to above $4.50 again – like last year?

Near the end of October 2018, Natural Gas began an upside price move that really excited investors. The first upside price leg began in mid-September, near $2.75 and rallied to a level near $3.35 – a +21.6% upside price move. After a brief 12 to 15 day pause, another price rally began in early November 2018 near $3.23 and continued very aggressively over the next 11+ days to rally up to $4.93 – a +57% rally.

We issued a natural gas trade using UGAZ to members and this week we locked in 38.7% profit on a portion of our position and there is still a lot of upside potential left.

Is the same type of price advance could be setting up for an early November price rally from the $2.30 level to somewhere above $3.50? This would result in a +50% price rally from recent lows without using any leverage which would be just amazing.

October 5, 2019: Natural Gas Reloads for Another Price Rally

Previous Natural Gas Forecast Daily Chart

Our proprietary Fibonacci price modeling system is suggesting the $2.95 price level is critical for any further upside price action to continue above $3.00. The price must cross above the $2.95 level on a strong closing price basis before we could consider any higher price levels to become valid. Our researchers believe that suggests the $2.75 to $2.85 level becomes a very real upside price target for skilled traders to pull some profits and protect any open long positions.

Previous Natural Gas Forecast Weekly Chart

This Weekly Natural Gas chart highlights our Fibonacci price modeling system’s results and the Bullish Trigger Level near $2.95 (The GREEN LINE). Pay very close attention to how quickly Natural Gas moved higher in November 2018. If another move happens like that in 2019, we could be setting up for a big gap higher followed by about 10 to 15+ days of incredible upside price action.

Currently, the price of Natural Gas has crossed the Daily Fibonacci price modeling system’s Bullish Price Trigger level near $2.29. This suggests that we are now in a confirmed bullish trend as long as the price stays above the $2.26 level on a closing price basis. We would expect a continued moderate price rally from these levels to move price away from the momentum base level over time – before any breakout upside price move may begin.

This could become one of the best trades, besides Silver and Gold, headed into the end of 2019. Get ready for some big volatility in Natural Gas as winter weather takes over much of North America.

November will be the month of breakouts and breakdowns and should spark some trades. I feel the safe havens like bonds and metals will be turning a corner and starting to firm up and head higher but they may not start a big rally for several weeks or months.

October was a boring month for most major asset classes completing their consolidation phase. Natural gas was the big mover in October and subscribers and I took full advantage of the bottom and breakout for a 15-22% gain and its till on fire and trading higher by another 3% this week already.

If you like to catch assets starting new trends and trade 1x, 2x and 3x ETF’s the be sure to join my premium trade alert service called the Wealth Building Newsletter.


Chris Vermeulen
The Technical Traders