Our proprietary Fibonacci predictive modeling system is suggesting Natural Gas is about to break down below the $4.30 level and move aggressively toward the $3.05 - 3.25 level. This could be an incredible move for energy traders and a complete bust for existing longs.
This Weekly Natural Gas chart is showing our Fibonacci Predictive modeling system and highlighting the lower support price targets just above $3.00. We believe price weakness will break the $4.30 level very quickly and drive prices well below the $3.40 level – very likely towards support near $3.25 over the next few weeks.
Our Advanced Adaptive Dynamic Learning predictive price modeling system is showing similar results. It suggests a major price anomaly is setting up in Natural Gas that will prompt a massive downside price move over the next 2 - 3 weeks before an equally incredible price recovery takes place. The total of this predicted price swing is nearly $2.00 ($1.00 down and then $0.85 back to the upside). If this move takes place as our modeling systems are suggesting, this will drive a massive “washout move” pushing the long traders out of their positions on the way down and then pushing a massive short squeeze on the way back up to near $4.00.
This is the type of price swing that makes for incredible success stories if traders can play this move properly. Pay attention to the fact that the lower predicted levels of our ADL system (shown near $3.20) may not be reached in this downward price swing. Our predictive modeling system is suggesting these are the highest probability price outcome based on its internal price and technical analysis. Still, when one takes a good hard look at this chart, it is easy to see the “price anomaly” setup where the current price of Natural Gas is nearly $0.80 above the currently predicted price levels (shown as YELLOW DASHES) and how the ADL Predictive modeling system is suggesting a big downward move is about to unfold.
Want to keep receiving incredible trade setups like this one and learn how our research team and specialized price modeling systems can help you find and execute better trades? Then please visit Technical Traders Ltd. to learn more about our services and tools. We have been helping traders find and execute better educated trading decisions with our specialized tools and research for years. Visit The Technical Traders Free Research to read all of our most recent public research posts and to see how we’ve been calling these market moves over the past few months.
Chris Vermeulen
Trade ideas, analysis and low risk set ups for commodities, Bitcoin, gold, silver, coffee, the indexes, options and your retirement. We'll help you keep your emotions out of your trading.
Thursday, December 13, 2018
Natural Gas Setup For a Big Move Lower
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Monday, December 10, 2018
Is a Deleveraging Event About to Unfold in the Stock Market?
As 2018 draws to a close and the global equities markets continue to find pricing and valuation pressures driving prices lower, a few questions come to mind for all investors/traders – Is a deleveraging event about to unfold? What will it look like if it does happen and how can I protect my investments from such an event? This research article is going to help you answer those questions and should help to resolve any lingering questions you may have regarding the true nature of this market rotation and volatility.
Our research team at The Technical Traders has been digging through the data and charts in an attempt to identify key elements of this recent price move. We are starting with our Monthly Adaptive Dynamic Learning Cycles chart of the ES (E-mini S&P). As you can see from this chart, our ADL Cycles modeling system is showing a deep downside price rotation is likely to unfold over the next 8 - 12 months. One thing to remember about this chart is that these cycles and the width of the future cycle peaks and troughs are NOT indicative of price target levels. Therefore, this downside move is NOT suspected of reaching price lows near 1000 or 1200. These cycles are representative of a magnitude of cycle events. In other words, this current cycle, downward, is expected to be a major cycle event that establishes a major price bottom somewhere near the end of 2019 or early 2020.
We urge traders to understand the scope of this cycle event. Look at the previous cycle events on this chart. Numerous downside cycle events have taken place over the past 10+ years that represent somewhat similar down cycle price moves. The most recent was in 2015 - 2016. This event represented a moderately deep down cycle even that equated to a 300 - 400 point price rotation in the ES. If the current cycle event is relative in scope to the last, then this current down-cycle event will likely result in a 600 - 800 point price rotation, and we have already experienced a nearly 300 point rotation in the ES. This would suggest a potential price bottom near 2100 - 2300 on the ES if the scale and scope of the current cycle event are relative to the previous down cycle event.
This next chart highlights key time/price cycles on the SPY Monthly chart to help us keep the timing of these events in perspective. As we have suggested, above, a major down cycle even may be unfolding that results in a deleveraging even across the global markets. If this does, in fact, take place, there are a number of elements that will likely play out. First, currencies will fluctuate dramatically as deleveraging takes root. Capital will seek out and identify the safest and most suitable returns by rushing away from risky markets and into safer markets. Additionally, a prolonged deleveraging of global equities may take place where valuations are reduced as capital attempts to establish a balance between expectations and true market value. Overall, this is a very healthy event for the markets as long as it does not result in a total collapse of price, as we saw in 2008-09.
This SPY chart highlights three key components of the markets current setup. First, the RED LINE (a 2.618 Fibonacci extension from the 2015 - 2016 price rotation at $266.50) is acting like a strong support level in the markets. This level, along with the 2018 lows near $254.78, are important levels that we are watching to determine if any further downside price activity is unfolding. As long as these two levels are not breached to the downside, we can confidently say that the upside trend is still intact. Second, the two BLUE price channels, which originate from the 2009 market bottom, establish a powerful upside price channel that will act as critical support should price reach near the lower level of this channel. This means that any downside price rotation will likely find solid support near $232.00 or higher. Lastly, the vertical time/price series cycles are suggesting that May and Oct of 2019 are likely to prompt significant price reversal patterns/setups. This helps us to understand that any potential breakout moves (up or down) will likely reach some critical inflection point, or reversal points, near May and October of 2019.
Next, we fall back to our Custom US Market Index chart on a Monthly basis. This chart, again, shows the support level originating from the lows of 2009 in a heavy BLUE line as well as two price channel levels that represent current price ranges. The first thing we want you to focus on is the breadth of the current rotation within the regression channel on this chart (the red/blue shorter price channel). Currently, the price is within this standard regression channel and has yet to break the longer-term, more aggressive, upward price channel. Additionally, we can see from this chart that the recent price activity is still measurably above the 2018 price lows near 374.12. Secondly, the Pitchfork channel, originating from the 2009 lows and spanning the range of the 2015 - 2016 price rotation, provides additional confirmation that we are still well above the middle and lower areas of this price channel. Even if the current price did fall by another 4 - 8%, the price would still be within the normal channel levels of this extended upside price channel.
So, when we consider the scale and scope of this current downside price rotation, we have to be very aware of the real expectations of the market. Yes, it looks frightening when we see it on a Daily or Weekly chart. But when we consider the real reality of the long term perspective, we can begin to understand how the price is reacting to the recent upside acceleration since 2017.
Lastly, this Daily ES chart is showing what we believe is the most important data of all and why all traders need to understand the risks involved in this rotating market. First, this chart shows our Adaptive Dynamic Learning Fibonacci price modeling system and the results of this chart are clear to our team or researchers – although it might be a bit cluttered to you. So we’ll try to explain the basic components of this chart for you.
The heavy RED and GREEN levels that are drawn above and below the price action are the Fibonacci Price Trigger levels. These indicate where and when we would consider a new price trend to be “confirmed” As you can see, the most recent “confirmed” trigger happened on Oct 10 with a huge breakdown of price confirming a bearish price trend. Since then, these Fibonacci Price Trigger Levels have expanded outside price as volatility and price rotation has also expanded. This indicates that price will have to make a bigger push, higher or lower, to establish any new confirmed price trend based on this modeling system.
There are two heavy YELLOW lines bordering recent price rotation on this chart that help us to understand a rather wide flag/pennant formation appears to be forming within these rotation/channel levels. For example, the absolute low of the current bar touched this lower YELLOW level and rebounded to the upside very sharply. It is very likely that a washout low price pattern executed today that may provide further price support near 2626 in the ES in the immediate future. Either way, the price will have to exit this YELLOW price channel if it is going to attempt any new upside or downside price trends. As long as it stays within this channel, we have a defined range that is currently between 2626 and 2800.
Lastly, the LIGHT BLUE oblique has been our estimated critical support level in the ES since our September 17 market call that a 5 - 8% downside price rotation was about to hit the markets. This level was predicted by our ADL predictive price modeling system and has been confirmed, multiple times, by price over the past few months. It is very likely that this level will continue to act as major support going forward and will be the last level of defense if price attempts a downside price move. In other words, as we stated above, 2600 - 2680 is a very strong support range in the markets right now. Any breakdown below this level could push the markets toward the 2018 price lows (or lower). As long as this level holds, we could see continued deleveraging in the markets as US Dollar, Energy, Commodity, Currency or global market price weakness while the US markets attempt to hold above the 2018 lows.
Pay very close attention to our Fibonacci price modeling and U.S. Custom Index charts, above, because we believe these charts paint a very clear picture. Yes, a deleveraging event is likely already unfolding in the global markets. It has been taking root in various forms over the past 12+ months in all reality. The U.S. markets are continuing to shake off the downside pricing pressures that we’ve seen in other global markets, and this is likely due to the “capital shift” event that is also unfolding throughout the globe.
Our advice for active traders would be to consider drastically reducing your trading sizes as well as pare back your open long positions if you are concerned about a market breakdown. Our modeling systems are suggesting we have many months of rotation within the market to reposition and evaluate our plans for future success. Unless the 2018 lows and the multiple critical support levels we’ve highlighted are threatened, we believe this rotation is nothing more than standard price rotation with acceptable ranges (see the charts above again if you have questions). Yes, there is still concern that a price breakdown may unfold and we are certainly seeing a deleveraging event taking place. We are not calling for a price collapse at the moment, and we have explained the reasons why we believe our research is accurate.
Use the best tools you can to assist you, just as we do for our members. The only thing you can do in a situation like this is taking factual data, evaluate the true price data and make an educated and logical conclusion about the markets. If you want to learn how we help our clients find and execute better trades and how we are preparing to make 2019 an incredibly successful year with our members, then visit The Technical Traders and see what we offer our members.
Chris Vermeulen
Our research team at The Technical Traders has been digging through the data and charts in an attempt to identify key elements of this recent price move. We are starting with our Monthly Adaptive Dynamic Learning Cycles chart of the ES (E-mini S&P). As you can see from this chart, our ADL Cycles modeling system is showing a deep downside price rotation is likely to unfold over the next 8 - 12 months. One thing to remember about this chart is that these cycles and the width of the future cycle peaks and troughs are NOT indicative of price target levels. Therefore, this downside move is NOT suspected of reaching price lows near 1000 or 1200. These cycles are representative of a magnitude of cycle events. In other words, this current cycle, downward, is expected to be a major cycle event that establishes a major price bottom somewhere near the end of 2019 or early 2020.
We urge traders to understand the scope of this cycle event. Look at the previous cycle events on this chart. Numerous downside cycle events have taken place over the past 10+ years that represent somewhat similar down cycle price moves. The most recent was in 2015 - 2016. This event represented a moderately deep down cycle even that equated to a 300 - 400 point price rotation in the ES. If the current cycle event is relative in scope to the last, then this current down-cycle event will likely result in a 600 - 800 point price rotation, and we have already experienced a nearly 300 point rotation in the ES. This would suggest a potential price bottom near 2100 - 2300 on the ES if the scale and scope of the current cycle event are relative to the previous down cycle event.
This next chart highlights key time/price cycles on the SPY Monthly chart to help us keep the timing of these events in perspective. As we have suggested, above, a major down cycle even may be unfolding that results in a deleveraging even across the global markets. If this does, in fact, take place, there are a number of elements that will likely play out. First, currencies will fluctuate dramatically as deleveraging takes root. Capital will seek out and identify the safest and most suitable returns by rushing away from risky markets and into safer markets. Additionally, a prolonged deleveraging of global equities may take place where valuations are reduced as capital attempts to establish a balance between expectations and true market value. Overall, this is a very healthy event for the markets as long as it does not result in a total collapse of price, as we saw in 2008-09.
This SPY chart highlights three key components of the markets current setup. First, the RED LINE (a 2.618 Fibonacci extension from the 2015 - 2016 price rotation at $266.50) is acting like a strong support level in the markets. This level, along with the 2018 lows near $254.78, are important levels that we are watching to determine if any further downside price activity is unfolding. As long as these two levels are not breached to the downside, we can confidently say that the upside trend is still intact. Second, the two BLUE price channels, which originate from the 2009 market bottom, establish a powerful upside price channel that will act as critical support should price reach near the lower level of this channel. This means that any downside price rotation will likely find solid support near $232.00 or higher. Lastly, the vertical time/price series cycles are suggesting that May and Oct of 2019 are likely to prompt significant price reversal patterns/setups. This helps us to understand that any potential breakout moves (up or down) will likely reach some critical inflection point, or reversal points, near May and October of 2019.
Next, we fall back to our Custom US Market Index chart on a Monthly basis. This chart, again, shows the support level originating from the lows of 2009 in a heavy BLUE line as well as two price channel levels that represent current price ranges. The first thing we want you to focus on is the breadth of the current rotation within the regression channel on this chart (the red/blue shorter price channel). Currently, the price is within this standard regression channel and has yet to break the longer-term, more aggressive, upward price channel. Additionally, we can see from this chart that the recent price activity is still measurably above the 2018 price lows near 374.12. Secondly, the Pitchfork channel, originating from the 2009 lows and spanning the range of the 2015 - 2016 price rotation, provides additional confirmation that we are still well above the middle and lower areas of this price channel. Even if the current price did fall by another 4 - 8%, the price would still be within the normal channel levels of this extended upside price channel.
So, when we consider the scale and scope of this current downside price rotation, we have to be very aware of the real expectations of the market. Yes, it looks frightening when we see it on a Daily or Weekly chart. But when we consider the real reality of the long term perspective, we can begin to understand how the price is reacting to the recent upside acceleration since 2017.
Lastly, this Daily ES chart is showing what we believe is the most important data of all and why all traders need to understand the risks involved in this rotating market. First, this chart shows our Adaptive Dynamic Learning Fibonacci price modeling system and the results of this chart are clear to our team or researchers – although it might be a bit cluttered to you. So we’ll try to explain the basic components of this chart for you.
The heavy RED and GREEN levels that are drawn above and below the price action are the Fibonacci Price Trigger levels. These indicate where and when we would consider a new price trend to be “confirmed” As you can see, the most recent “confirmed” trigger happened on Oct 10 with a huge breakdown of price confirming a bearish price trend. Since then, these Fibonacci Price Trigger Levels have expanded outside price as volatility and price rotation has also expanded. This indicates that price will have to make a bigger push, higher or lower, to establish any new confirmed price trend based on this modeling system.
There are two heavy YELLOW lines bordering recent price rotation on this chart that help us to understand a rather wide flag/pennant formation appears to be forming within these rotation/channel levels. For example, the absolute low of the current bar touched this lower YELLOW level and rebounded to the upside very sharply. It is very likely that a washout low price pattern executed today that may provide further price support near 2626 in the ES in the immediate future. Either way, the price will have to exit this YELLOW price channel if it is going to attempt any new upside or downside price trends. As long as it stays within this channel, we have a defined range that is currently between 2626 and 2800.
Lastly, the LIGHT BLUE oblique has been our estimated critical support level in the ES since our September 17 market call that a 5 - 8% downside price rotation was about to hit the markets. This level was predicted by our ADL predictive price modeling system and has been confirmed, multiple times, by price over the past few months. It is very likely that this level will continue to act as major support going forward and will be the last level of defense if price attempts a downside price move. In other words, as we stated above, 2600 - 2680 is a very strong support range in the markets right now. Any breakdown below this level could push the markets toward the 2018 price lows (or lower). As long as this level holds, we could see continued deleveraging in the markets as US Dollar, Energy, Commodity, Currency or global market price weakness while the US markets attempt to hold above the 2018 lows.
Pay very close attention to our Fibonacci price modeling and U.S. Custom Index charts, above, because we believe these charts paint a very clear picture. Yes, a deleveraging event is likely already unfolding in the global markets. It has been taking root in various forms over the past 12+ months in all reality. The U.S. markets are continuing to shake off the downside pricing pressures that we’ve seen in other global markets, and this is likely due to the “capital shift” event that is also unfolding throughout the globe.
Our advice for active traders would be to consider drastically reducing your trading sizes as well as pare back your open long positions if you are concerned about a market breakdown. Our modeling systems are suggesting we have many months of rotation within the market to reposition and evaluate our plans for future success. Unless the 2018 lows and the multiple critical support levels we’ve highlighted are threatened, we believe this rotation is nothing more than standard price rotation with acceptable ranges (see the charts above again if you have questions). Yes, there is still concern that a price breakdown may unfold and we are certainly seeing a deleveraging event taking place. We are not calling for a price collapse at the moment, and we have explained the reasons why we believe our research is accurate.
Use the best tools you can to assist you, just as we do for our members. The only thing you can do in a situation like this is taking factual data, evaluate the true price data and make an educated and logical conclusion about the markets. If you want to learn how we help our clients find and execute better trades and how we are preparing to make 2019 an incredibly successful year with our members, then visit The Technical Traders and see what we offer our members.
Chris Vermeulen
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The Technical Traders
Thursday, December 6, 2018
Renewed Economic Optimism Will Hold Metals Near Recent Lows
The U.S. stocks are already up 1.5%, and gold 1.1% or more on news originating from Argentina from the G20 meeting. The commitment from the U.S. and China to restore talks and hold off on new trade tariffs for a 90 day period of time allows the markets some breathing room and some time to digest future expectations. Combine that with the U.S. Fed talking about taking a more dovish approach to rates and that rates are near “neutral” and we have a perfect setup for the global equity markets to rally back towards recent all time highs.
This type of equity opportunity will push the metals markets towards recent price ranges/lows with almost no attempt at upward price activity. In our opinion, we are looking for the next 14 days to be quite explosive in the equities markets and quite mute in the metal’s markets.
Gold will likely stay below $1250 for the next 10 - 14 days as a renewed global equities rally takes hold. This is an excellent time to establish new long positions as our predictive modeling systems are suggesting that the metals markets should start to move higher near the end of 2018 and into early 2019.
Silver will likely stay below $14.40 for the next 10 - 14 days with the possibility of falling below $14 on a washout low price rotation near Dec 10th or 11th. This would be an excellent time to look for and set up positional long trades in metals miners or SIL in preparation for the late December and early Jan price pop that our predictive modeling system is suggesting will happen.
The initial upswing price activity in the metals will push prices above recent price peaks ($1260 for Gold and $15.00 for Silver). Our modeling systems suggest this price move will stall in late Jan 2019 and continue to stay muted till April or May of 2019. At that point, a new upside price advance will push metals prices much higher.
This may be the last time you see prices near these lows, so be aware of the risks that are ahead of the markets. Remember, the EU and the Brexit deals will likely play a role in the rise of the metals prices over the next few months, so take advantage of these setups before they vanish.
Follow our analysis to stay on the right side of this move. Our predictive modeling systems have been calling these market moves 30 - 60+ days in advance. Visit The Technical Traders to learn how we can help you find and execute better trades.
Chris Vermeulen
Check out Chris' 3 Hour Trading Strategy Mastery Video Course Right Here
This type of equity opportunity will push the metals markets towards recent price ranges/lows with almost no attempt at upward price activity. In our opinion, we are looking for the next 14 days to be quite explosive in the equities markets and quite mute in the metal’s markets.
Gold will likely stay below $1250 for the next 10 - 14 days as a renewed global equities rally takes hold. This is an excellent time to establish new long positions as our predictive modeling systems are suggesting that the metals markets should start to move higher near the end of 2018 and into early 2019.
Silver will likely stay below $14.40 for the next 10 - 14 days with the possibility of falling below $14 on a washout low price rotation near Dec 10th or 11th. This would be an excellent time to look for and set up positional long trades in metals miners or SIL in preparation for the late December and early Jan price pop that our predictive modeling system is suggesting will happen.
The initial upswing price activity in the metals will push prices above recent price peaks ($1260 for Gold and $15.00 for Silver). Our modeling systems suggest this price move will stall in late Jan 2019 and continue to stay muted till April or May of 2019. At that point, a new upside price advance will push metals prices much higher.
This may be the last time you see prices near these lows, so be aware of the risks that are ahead of the markets. Remember, the EU and the Brexit deals will likely play a role in the rise of the metals prices over the next few months, so take advantage of these setups before they vanish.
Follow our analysis to stay on the right side of this move. Our predictive modeling systems have been calling these market moves 30 - 60+ days in advance. Visit The Technical Traders to learn how we can help you find and execute better trades.
Chris Vermeulen
Check out Chris' 3 Hour Trading Strategy Mastery Video Course Right Here
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The Technical Traders
Monday, November 26, 2018
Crude Oil and Bitcoin Hit New Yearly Lows
For the first time in a year WTI crude oil is traded below $54 a barrel hitting a low of $53.63. Oil fell as much as 6% as fears are surfacing that OPEC's planned production cuts will do little to stave off a surge in global stockpiles.
Bitcoin finally made a significant move to break out of the tight trading range that it had been trapped in. Unfortunately for Bitcoin bulls, it was not the move that they were looking for as it dropped almost 13% on Monday and continued lower Tuesday shedding another 4.8% to trade at the new yearly low of $4,547.00. The cryptocurrency is now down more than 60% year to date and more than 70% since its all time high. Where will it stop? $3000, $2000 or $1000?
Not to be outdone by oil and Bitcoin, stocks are all continuing the sell off that started Monday with the S&P 500 dropping 1.6%, the DOW is once again below 25k, shedding 2% and the NASDAQ is trading back below 7,000 losing 1.6%. The recent sell off has once again pushed the stock market back below the yearly open, shedding all of the gains that came with record highs earlier in the year which has driven all three indexes into correction/bear market territory. It's looking more and more like we have a good to chance to end the year lower unless we get the Santa Clause rally.
Jeremy Lutz
INO/MarketClub
Bitcoin finally made a significant move to break out of the tight trading range that it had been trapped in. Unfortunately for Bitcoin bulls, it was not the move that they were looking for as it dropped almost 13% on Monday and continued lower Tuesday shedding another 4.8% to trade at the new yearly low of $4,547.00. The cryptocurrency is now down more than 60% year to date and more than 70% since its all time high. Where will it stop? $3000, $2000 or $1000?
Not to be outdone by oil and Bitcoin, stocks are all continuing the sell off that started Monday with the S&P 500 dropping 1.6%, the DOW is once again below 25k, shedding 2% and the NASDAQ is trading back below 7,000 losing 1.6%. The recent sell off has once again pushed the stock market back below the yearly open, shedding all of the gains that came with record highs earlier in the year which has driven all three indexes into correction/bear market territory. It's looking more and more like we have a good to chance to end the year lower unless we get the Santa Clause rally.
Jeremy Lutz
INO/MarketClub
Gold Extends Consolidation Giving Silver Another Chance
Gold and silver exchange leading roles in the market quite often, especially on the short term charts. Last time I wrote about it silver saved gold from collapse at the start of this month. The white metal unexpectedly bounced off the earlier low reversing the drop of the yellow metal.
This time gold took the lead as its failure to break below the Bear Flag let silver lick its wounds and return above the $14 handle.
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Both metals are still trapped in the middle of the range set by the earlier heavy drop, which first occurred in gold and then it was repeated in the silver market. In this post, I have focused on the local structure as the bigger picture remains unchanged.
The top metal couldn’t break below the trendline support of a Bear Flag (orange) and then quickly restored most of its losses coming back above $1200. It is interesting that the forecasted drop unfolded quite differently in each metal. Silver tagged the earlier trough, but gold failed even to breach the vertically sloped trendline. It looks like strong demand appeared right at the round number of the gold price in the $1200 area.
This move up could build another leg of a prolonged correction, which is labeled as third 3rd (blue line) on the chart. The target for this leg is located on the upside of the trend channel ($1260-$1270), and it perfectly matches with the earlier top established this July. It is worth to mention that the triple legged corrections are not as regular as simple AB/CD double leg moves.
Currently, gold shows signs of a minor correction, therefore, I put the Fibonacci retracement levels to highlight the area where the last move up within the 3rd leg up could emerge. This area is located between $1209 and $1213, and it coincides with the trendline support contact point.
The break below $1190 is needed to invalidate the current growth structure.
Silver has a lot of tricks on the chart, and from the very beginning of this horizontal consolidation, I was puzzled to break down the initial structure, although gold has been hinting clearly at the large consolidation in both metals. The main assistant of the trader is time, as more time passes, the chart the structure of the instrument becomes clearer.
As gold didn’t confirm the end of the consolidation, then we should consider the continuation of it for silver as well despite that it retested the earlier low to establish the fresh one at $13.88.
It looks like we got a very complex BC junction, which consists of two counter-trend moves down (small red down arrows). The complexity emerged due to the additional pro-trend (counter-trend relative to red down arrows) sub-junction (small blue up arrows), which let silver synchronize the move with gold as earlier it has been lagging. What was considered to be a second CD leg up, turned out to be a lesser degree CD leg up of a sub-junction. The complexity of the silver chart structure was caused by the unstable nature of the market demand as central banks favor gold, and only cross-market bargain hunters eliminate the excessive miscorrelation.
The second leg (CD segment) up could finally retest the $15 round level to complete this large flat correction. The minor correction that started at the end of last week already hit below the 50% Fibonacci retracement level ($14.21) and could dip further to the $14 round level as gold have more room down for the same minor retracement.
The drop below $13.88 would terminate this leg up.
Aibek Burabayev
Contributor, Metals
This time gold took the lead as its failure to break below the Bear Flag let silver lick its wounds and return above the $14 handle.
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Both metals are still trapped in the middle of the range set by the earlier heavy drop, which first occurred in gold and then it was repeated in the silver market. In this post, I have focused on the local structure as the bigger picture remains unchanged.
The top metal couldn’t break below the trendline support of a Bear Flag (orange) and then quickly restored most of its losses coming back above $1200. It is interesting that the forecasted drop unfolded quite differently in each metal. Silver tagged the earlier trough, but gold failed even to breach the vertically sloped trendline. It looks like strong demand appeared right at the round number of the gold price in the $1200 area.
This move up could build another leg of a prolonged correction, which is labeled as third 3rd (blue line) on the chart. The target for this leg is located on the upside of the trend channel ($1260-$1270), and it perfectly matches with the earlier top established this July. It is worth to mention that the triple legged corrections are not as regular as simple AB/CD double leg moves.
Currently, gold shows signs of a minor correction, therefore, I put the Fibonacci retracement levels to highlight the area where the last move up within the 3rd leg up could emerge. This area is located between $1209 and $1213, and it coincides with the trendline support contact point.
The break below $1190 is needed to invalidate the current growth structure.
Silver has a lot of tricks on the chart, and from the very beginning of this horizontal consolidation, I was puzzled to break down the initial structure, although gold has been hinting clearly at the large consolidation in both metals. The main assistant of the trader is time, as more time passes, the chart the structure of the instrument becomes clearer.
As gold didn’t confirm the end of the consolidation, then we should consider the continuation of it for silver as well despite that it retested the earlier low to establish the fresh one at $13.88.
It looks like we got a very complex BC junction, which consists of two counter-trend moves down (small red down arrows). The complexity emerged due to the additional pro-trend (counter-trend relative to red down arrows) sub-junction (small blue up arrows), which let silver synchronize the move with gold as earlier it has been lagging. What was considered to be a second CD leg up, turned out to be a lesser degree CD leg up of a sub-junction. The complexity of the silver chart structure was caused by the unstable nature of the market demand as central banks favor gold, and only cross-market bargain hunters eliminate the excessive miscorrelation.
The second leg (CD segment) up could finally retest the $15 round level to complete this large flat correction. The minor correction that started at the end of last week already hit below the 50% Fibonacci retracement level ($14.21) and could dip further to the $14 round level as gold have more room down for the same minor retracement.
The drop below $13.88 would terminate this leg up.
Aibek Burabayev
Contributor, Metals
Friday, November 23, 2018
Crude Oil and Bitcoin Hit New Yearly Lows
For the first time in a year WTI crude oil is traded below $54 a barrel hitting a low of $53.63. Oil fell as much as 6% as fears are surfacing that OPEC's planned production cuts will do little to stave off a surge in global stockpiles.
Bitcoin finally made a significant move to break out of the tight trading range that it had been trapped in. Unfortunately for Bitcoin bulls, it was not the move that they were looking for as it dropped almost 13% on Monday and continued lower Tuesday shedding another 4.8% to trade at the new yearly low of $4,547.00. The cryptocurrency is now down more than 60% year to date and more than 70% since its all time high. Where will it stop? $3000, $2000 or $1000?
Not to be outdone by oil and Bitcoin, stocks are all continuing the sell off that started Monday with the S&P 500 dropping 1.6%, the DOW is once again below 25k, shedding 2% and the NASDAQ is trading back below 7,000 losing 1.6%. The recent sell off has once again pushed the stock market back below the yearly open, shedding all of the gains that came with record highs earlier in the year which has driven all three indexes into correction/bear market territory. It's looking more and more like we have a good to chance to end the year lower unless we get the Santa Clause rally.
Jeremy Lutz
INO/MarketClub
Bitcoin finally made a significant move to break out of the tight trading range that it had been trapped in. Unfortunately for Bitcoin bulls, it was not the move that they were looking for as it dropped almost 13% on Monday and continued lower Tuesday shedding another 4.8% to trade at the new yearly low of $4,547.00. The cryptocurrency is now down more than 60% year to date and more than 70% since its all time high. Where will it stop? $3000, $2000 or $1000?
Not to be outdone by oil and Bitcoin, stocks are all continuing the sell off that started Monday with the S&P 500 dropping 1.6%, the DOW is once again below 25k, shedding 2% and the NASDAQ is trading back below 7,000 losing 1.6%. The recent sell off has once again pushed the stock market back below the yearly open, shedding all of the gains that came with record highs earlier in the year which has driven all three indexes into correction/bear market territory. It's looking more and more like we have a good to chance to end the year lower unless we get the Santa Clause rally.
Jeremy Lutz
INO/MarketClub
Monday, November 12, 2018
Will Crude Oil Find Support Near $60 Dollars
Our research team warned of this move in crude oil back on October 7, 2018. At that time, we warned that oil may follow a historical price pattern, moving dramatically lower and that lows near $65 may become the ultimate bottom for that move. Here we are with a price below that level and many are asking “where will it go from here?”.
We believe the support near $65, although clearly broken, may eventually become resistance for a future upside price move. Our proprietary Fibonacci price modeling system is suggesting a new target near $52.00 - $53.00 and we believe this downside move in crude oil is far from over at this point.
The current global climate for oil is that suppliers are pumping more and more oil into the market at a time when, historically, prices should continue to decline. One of our research tools includes the ability to identify overall bias models for each week, month or quarter. Historically, crude oil is dramatically weaker in the month of November and relatively flat for the month of December.
Analysis for the month of November = 11
* Total Monthly Sum : -44.52000000000001 across 36 bars
Analysis for the month of December = 12
* Total Monthly Sum : -0.699999999999922 across 36 bars
We believe the price of oil will continue to drift lower to target the $52.00 - $53.00 Fibonacci support level before attempting to find any real price support. This equates to an addition -6 to -8% price decline for skilled traders. We will alert you with a new research post as this downward price move continues or new research becomes available.
We have been calling these types of market moves all year and recently called the top in the U.S. equity markets nearly 40 days before it happened. Want to know what we think is going to happen for the rest of 2018 and into early 2019? Visit the Technical Traders Free Research to read all of our public research posts. Isn’t it time you invested in a team of researchers and tools to assist you in finding greater trading success?
Chris Vermeulen
We believe the support near $65, although clearly broken, may eventually become resistance for a future upside price move. Our proprietary Fibonacci price modeling system is suggesting a new target near $52.00 - $53.00 and we believe this downside move in crude oil is far from over at this point.
The current global climate for oil is that suppliers are pumping more and more oil into the market at a time when, historically, prices should continue to decline. One of our research tools includes the ability to identify overall bias models for each week, month or quarter. Historically, crude oil is dramatically weaker in the month of November and relatively flat for the month of December.
Analysis for the month of November = 11
* Total Monthly Sum : -44.52000000000001 across 36 bars
Analysis for the month of December = 12
* Total Monthly Sum : -0.699999999999922 across 36 bars
We believe the price of oil will continue to drift lower to target the $52.00 - $53.00 Fibonacci support level before attempting to find any real price support. This equates to an addition -6 to -8% price decline for skilled traders. We will alert you with a new research post as this downward price move continues or new research becomes available.
We have been calling these types of market moves all year and recently called the top in the U.S. equity markets nearly 40 days before it happened. Want to know what we think is going to happen for the rest of 2018 and into early 2019? Visit the Technical Traders Free Research to read all of our public research posts. Isn’t it time you invested in a team of researchers and tools to assist you in finding greater trading success?
Chris Vermeulen
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Thursday, November 8, 2018
U.S. Equities Roar to Life After Elections
Our research team is writing this message to alert all investors and traders of a pending rotation in the U.S. stock market that may happen between now and November 15th. The upside price breakout that is occurring on November 7th, the day after the US mid-term elections, is an incredible display of global investor sentiment regarding the GOP success in the Senate and the continued business friendly expectations originating out of Washington DC. The move, today, shows how clearly a global capital market shift is still engaged in the U.S. markets and how much global investors are counting on the US to drive ROI and economic growth going forward.
Yet, we feel it is important to urge investors that our modeling systems are still suggesting an ultimate price bottom should be setting up near November 8th - 15th and that we could still see a bit of downward price rotation over the next few days before this ultimate price bottom completes. It might be too easy to get caught up in this move, today, and fail to properly understand the price rotation risks that are still active in the time/price horizon.
The ES is currently +48.00 as of the creation of this post (+1.74%). This is an incredible move higher and the 2790 level becomes critical support for the markets as long as price is able to stay above that level.
The NQ is currently +172.50 (+2.45%) and shows just how clearly investors are piling into technology, healthcare and bio-tech after the US elections. This is a real vote from investors that they believe President Trump will be able to navigate any issues going forward and that the US economy will continue to push out strong numbers.
Follow our analysis to read our most recent research posts. We have already positioned our members for this “ultimate bottom” that our predictive modeling systems suggest is in the midst of forming. We called this entire downside move, bottom rotation and the ultimate bottom pattern setting up near November 12th back on September 17. If you want to learn how we can help you find and execute better trades, visit The Technical Traders to learn more.
Chris Vermeulen
Check out Chris' "Three Hour Mastery Trading Course" Right Here
Yet, we feel it is important to urge investors that our modeling systems are still suggesting an ultimate price bottom should be setting up near November 8th - 15th and that we could still see a bit of downward price rotation over the next few days before this ultimate price bottom completes. It might be too easy to get caught up in this move, today, and fail to properly understand the price rotation risks that are still active in the time/price horizon.
The ES is currently +48.00 as of the creation of this post (+1.74%). This is an incredible move higher and the 2790 level becomes critical support for the markets as long as price is able to stay above that level.
The NQ is currently +172.50 (+2.45%) and shows just how clearly investors are piling into technology, healthcare and bio-tech after the US elections. This is a real vote from investors that they believe President Trump will be able to navigate any issues going forward and that the US economy will continue to push out strong numbers.
Follow our analysis to read our most recent research posts. We have already positioned our members for this “ultimate bottom” that our predictive modeling systems suggest is in the midst of forming. We called this entire downside move, bottom rotation and the ultimate bottom pattern setting up near November 12th back on September 17. If you want to learn how we can help you find and execute better trades, visit The Technical Traders to learn more.
Chris Vermeulen
Check out Chris' "Three Hour Mastery Trading Course" Right Here
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Monday, October 29, 2018
Where's the Capitulation in Precious Metals?
Over the past 20+ years of research and trading in the markets, our team of traders and researchers know one thing is certain, when fear hits the global markets, precious metals react by rocketing higher. We’ve seen this happen over and over again – even when non-US geopolitical concerns spark some true fear in the markets.
If you’ve followed our research this week, we’ve been warning about how we believe this move is purely price and technical based and not really a fear based global price collapse. In other words, our technical systems, price modeling systems, and other advanced price analysis tools are suggesting this move is nearing an end and was likely a function of price rotation and less a function of true fear in the global markets.
Yes, there were a couple of key factors the precipitated this price move; the Fed, Earnings, Housing Data, Trade, and Geopolitical concerns and the US Elections. Yet the biggest concern for traders was the “deja vu” feeling that Housing could present another massive crash near an election. We’ve been through that and we know how ugly that can be if it were to unfold again.
Our researchers, at The Technical Traders, spent quite a bit of time going over the data and we continue to believe this downside price rotation in the global stock markets was nothing more than a technical price correction WITHOUT any real capitulation from other commodities. If the recent downside price collapse sowed any real fear into investors, then precious metals should have skyrocketed higher over the past 3+ weeks.
This Weekly Gold chart shows how prices advanced moderately over the past few weeks and failed to originate any real broad upside move as equity prices collapsed. Weeks ago, we predicted Gold would climb to near $1235, the CYAN line on this chart, before weakening to near $1200 again near the US mid term elections. After the elections, we believe that Gold will begin another price advance toward a price target near $1310 headed into 2019.
The YELLOW arrow showing the massive upside projections are based on our Fibonacci price modeling system and suggest that Gold may ultimately have an upside potential near $1435 or $1565 eventually. These upside targets, if reached, would be the result of REAL FEAR entering the global markets associated with a much greater contagion/capitulation event taking place. This may be something that happens in the future, as some point, but we don’t believe this is taking place now.
This Weekly Silver chart further illustrates the weakness in the precious metals sector throughout this recent global stock market collapse. The price of Silver actually fell slightly over the past few weeks and stayed near $14.75. A recent double bottom formation in Silver near $13.95 is a very strong indication that Silver is establishing a long-term base near the $14.00 level. You can see from our draws arrows that we believe Silver will continue to contract headed into the US mid-term elections, then begin a moderate advance higher.
We are actively searching for new trades within the precious metals sector that present clear opportunities for our members/subscribers as we believe this upside move in the metals will be one of the best trades in 2019. Although, right now, these trades are “set up trade” in the sense that we don’t expect any true fear to change price at the moment. We do expect investors to continue to look towards the precious metals markets as a form of protection from global events in the future and we believe that when the dam breaks and fear really does enter the markets, traders need to already be positioned within the precious metals sector – not chasing after the move.
Overall, our question still remains valid – where’s the capitulation in the precious metals? If this downside price movement within the global markets was “the top”, we have yet to see any real capitulation in precious metals, which we believe would be the first place to reflect this true fear. Without this capitulation, our researchers continue to believe this is a technical “reversion” move where price is moving lower to re-establish support for another upside price advance.
In conclusion, we do expect moderate price advances in the precious metals sector over the next 4~6+ months. We believe this sector will continue to attract investors as a means of protection against a sudden and more structural price collapse event in the future. Right now, though, we just don’t see the capitulation that would need to be in place if the downside equities move instilled any real fear in traders. It’s just not there – yet. Therefore, this recent downside swing appears to be a capital shift or reversion event where price will quickly attempt to find support, based (headed into the US mid-term elections – as we’ve been suggesting) and begin to move higher after November 12th.
Please visit The Technical Traders here for our Free Research to see all of our recent research posts and to help you understand what our researchers believe is really transpiring within the global markets.
Additionally, please visit The Technical Traders to learn how we can help you find and execute better trades and stay ahead of these market moves. Learn how we help our subscribers by delivering specialized content, video, research, trading signals and more. The next few years are going to be full of fantastic trading opportunities. Now is the time to start to take advantage of these setups and create greater success for your future.
Chris Vermeulen
If you’ve followed our research this week, we’ve been warning about how we believe this move is purely price and technical based and not really a fear based global price collapse. In other words, our technical systems, price modeling systems, and other advanced price analysis tools are suggesting this move is nearing an end and was likely a function of price rotation and less a function of true fear in the global markets.
Yes, there were a couple of key factors the precipitated this price move; the Fed, Earnings, Housing Data, Trade, and Geopolitical concerns and the US Elections. Yet the biggest concern for traders was the “deja vu” feeling that Housing could present another massive crash near an election. We’ve been through that and we know how ugly that can be if it were to unfold again.
Our researchers, at The Technical Traders, spent quite a bit of time going over the data and we continue to believe this downside price rotation in the global stock markets was nothing more than a technical price correction WITHOUT any real capitulation from other commodities. If the recent downside price collapse sowed any real fear into investors, then precious metals should have skyrocketed higher over the past 3+ weeks.
This Weekly Gold chart shows how prices advanced moderately over the past few weeks and failed to originate any real broad upside move as equity prices collapsed. Weeks ago, we predicted Gold would climb to near $1235, the CYAN line on this chart, before weakening to near $1200 again near the US mid term elections. After the elections, we believe that Gold will begin another price advance toward a price target near $1310 headed into 2019.
The YELLOW arrow showing the massive upside projections are based on our Fibonacci price modeling system and suggest that Gold may ultimately have an upside potential near $1435 or $1565 eventually. These upside targets, if reached, would be the result of REAL FEAR entering the global markets associated with a much greater contagion/capitulation event taking place. This may be something that happens in the future, as some point, but we don’t believe this is taking place now.
This Weekly Silver chart further illustrates the weakness in the precious metals sector throughout this recent global stock market collapse. The price of Silver actually fell slightly over the past few weeks and stayed near $14.75. A recent double bottom formation in Silver near $13.95 is a very strong indication that Silver is establishing a long-term base near the $14.00 level. You can see from our draws arrows that we believe Silver will continue to contract headed into the US mid-term elections, then begin a moderate advance higher.
We are actively searching for new trades within the precious metals sector that present clear opportunities for our members/subscribers as we believe this upside move in the metals will be one of the best trades in 2019. Although, right now, these trades are “set up trade” in the sense that we don’t expect any true fear to change price at the moment. We do expect investors to continue to look towards the precious metals markets as a form of protection from global events in the future and we believe that when the dam breaks and fear really does enter the markets, traders need to already be positioned within the precious metals sector – not chasing after the move.
Overall, our question still remains valid – where’s the capitulation in the precious metals? If this downside price movement within the global markets was “the top”, we have yet to see any real capitulation in precious metals, which we believe would be the first place to reflect this true fear. Without this capitulation, our researchers continue to believe this is a technical “reversion” move where price is moving lower to re-establish support for another upside price advance.
In conclusion, we do expect moderate price advances in the precious metals sector over the next 4~6+ months. We believe this sector will continue to attract investors as a means of protection against a sudden and more structural price collapse event in the future. Right now, though, we just don’t see the capitulation that would need to be in place if the downside equities move instilled any real fear in traders. It’s just not there – yet. Therefore, this recent downside swing appears to be a capital shift or reversion event where price will quickly attempt to find support, based (headed into the US mid-term elections – as we’ve been suggesting) and begin to move higher after November 12th.
Please visit The Technical Traders here for our Free Research to see all of our recent research posts and to help you understand what our researchers believe is really transpiring within the global markets.
Additionally, please visit The Technical Traders to learn how we can help you find and execute better trades and stay ahead of these market moves. Learn how we help our subscribers by delivering specialized content, video, research, trading signals and more. The next few years are going to be full of fantastic trading opportunities. Now is the time to start to take advantage of these setups and create greater success for your future.
Chris Vermeulen
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Thursday, October 18, 2018
Detailed Map of Expected Price Movement Before the Breakout
Our research team was hard at work over the past few days. Not only were they able to call this downside price swing 3+ weeks in advance, they also called the market bottom within 0.5% of the absolute lows. Now, they have put together a suggested “map” of what to expect in regards to price rotation, support, resistance and the eventual price breakout that we are expecting to happen near or after November 8~12. Today, we are sharing this detailed map with all of our followers.
Our research team, at The Technical Traders, have honed their skills over the past few decades by studying market correlations, price relationships, advanced price modeling and more. Our objective is to be able to identify price patterns, opportunities, and setups while attempting to accurately predict the future of price so that we can keep our followers and members uniquely aware of future opportunities. As you can imagine, it is not an easy job and we often take heat for some of our research posts.
Today, we are sticking out neck out (again) and attempting to predict the future of the ES price rotation as this deeper rotation continues to play out. Our research team believes it has identified key price levels and dates/times that are relevant to this future price rotation. By no means is this research set in stone in regards to exact dates/times. These are suggestions which we believe to be accurate based on our research and analysis of the markets. Use them as guides to how this price rotation plays out.
This first chart is a Daily ES chart that shows three very important components of the current market price rotation.
* The Support Zone below the recent lows is actually very critical to the true understanding of price rotation. As long as this support zone is not completely breached, prices should continue to push higher overall.
* The Rotation Zone is where we believe the price will continue to consolidate within a fairly tight range before the November 8 - 12 bottom sets up. Volatility will continue to be greater than normal throughout this Rotation Zone.
* The post November 8 -12 breakout is likely to attempt to target 3131 initially (a Fibonacci extension target) and we believe this move higher could explode fairly quickly.
Now that we have explained the general sense of our research, let’s dig into the numbers a bit.
Our expectation is that a price peak will occur near early morning trading on October 26 (morning session in NY). We believe this peak will end near 2830 (a Fibonacci 50% retracement level) and we believe an extended basing pattern will precede this price peak. The extended basing pattern, which is expected to end near 2770 (a Fibonacci 25% retracement level) is already starting to form and should last from now until near October 23 or 24. We believe the upside move between the end of the basing pattern and the October 26th peak will be very fast and end fairly quickly – so be prepared.
The October 26th price peak will set up a very important component of our final analysis – the peak-to-peak price channel (highlighted in YELLOW now) and will allow us to determine when and where price volatility predicts the breakout move to occur. Our research team believes another bout of extended basing will occur after the October 26th peak that will likely push just below the 2771 support levels (to near 2750) retesting the Support Zone and presenting a “false low price breakout” pattern that may sucker many longs out of the market (and potentially set up massive short seller pressures in the market). This move may be critical to the eventual upside breakout that we are predicting.
Think of it like this, Fibonacci price theory suggests that price MUST attempt to establish new higher high prices or lower low prices at all times. Failure to accomplish these new price levels results in a consolidating/congesting price trend that typically forms as Pennants or Flags in price. Near the Apex of these pennant/flag formations, false breakouts (or what we call “washout lows or highs”) are common. These are price functions that operate as a “shakeout move” where price searches for direction and where buyers and sellers are stacked on top of one another attempting to ride the next wave. Price MUST attempt to establish a new higher high or lower low – so it must attempt to rally up and break the 2945 level or it must sell off and attempt to break the 2712 level. We expect extreme volatility near or after the November 8 - 12 apex setup. Price could fall deep into the Support Zone before reversing higher with a bigger rally that attempts to run well above the 2945 level.
The vertical blue line is the November 8 date where we expect the absolute bottom to form and where we expect the next big price rally to initiate. Near after this date, we expect the price to rotate with greater volatility and attempt an upside breakout move near or after November 12. The key Fibonacci levels at 2771 & 2829 are certain to become key price rotation levels near this November 8 - 12 price breakout.
At this point, we have outlined some very detailed and structured price rotation levels that should clearly help you understand what is transpiring within the US Equities markets right now. If you take only one thing away from reading this article, please understand the Support Zone that we’ve highlighted on our charts is super critical to the ability for the US Equities markets to continue to push higher. If this level is completely breached by lower prices (prices falling all the way below these price channels on the Daily chart, above), then our predictions of price rotation, extended basing and an ultimate upside price breakout are invalid. This Support Zone MUST hold for our analysis to become valid.
This level of research and understanding as related to technical and price analysis is not something one stumbles upon blindly. This takes years of study, practice, research, and understanding to be able to “see into the future” as we do. Sure, anyone that understands basic trend lines and Fibonacci concepts can draw some lines on a chart – but their overall success rate will quickly illustrate their true understanding of the markets. Take a minute to visit the Technical Traders website and read some of our recent research posts and pay attention to how we accurately predicted a 5 - 8% price correction 3+ weeks before this recent move happened.
Ask yourself, how did we know it was going to happen and how did we know it would stop near 2700? Visit The Technical Traders "Free Research"
To read all of our recent research posts or read how we predicted this downside price move by clicking here: Trading Model Suggests Falling Stock Prices for U.S. Elections
Chris Vermeulen
Our research team, at The Technical Traders, have honed their skills over the past few decades by studying market correlations, price relationships, advanced price modeling and more. Our objective is to be able to identify price patterns, opportunities, and setups while attempting to accurately predict the future of price so that we can keep our followers and members uniquely aware of future opportunities. As you can imagine, it is not an easy job and we often take heat for some of our research posts.
Today, we are sticking out neck out (again) and attempting to predict the future of the ES price rotation as this deeper rotation continues to play out. Our research team believes it has identified key price levels and dates/times that are relevant to this future price rotation. By no means is this research set in stone in regards to exact dates/times. These are suggestions which we believe to be accurate based on our research and analysis of the markets. Use them as guides to how this price rotation plays out.
This first chart is a Daily ES chart that shows three very important components of the current market price rotation.
* The Support Zone below the recent lows is actually very critical to the true understanding of price rotation. As long as this support zone is not completely breached, prices should continue to push higher overall.
* The Rotation Zone is where we believe the price will continue to consolidate within a fairly tight range before the November 8 - 12 bottom sets up. Volatility will continue to be greater than normal throughout this Rotation Zone.
* The post November 8 -12 breakout is likely to attempt to target 3131 initially (a Fibonacci extension target) and we believe this move higher could explode fairly quickly.
Now that we have explained the general sense of our research, let’s dig into the numbers a bit.
Our expectation is that a price peak will occur near early morning trading on October 26 (morning session in NY). We believe this peak will end near 2830 (a Fibonacci 50% retracement level) and we believe an extended basing pattern will precede this price peak. The extended basing pattern, which is expected to end near 2770 (a Fibonacci 25% retracement level) is already starting to form and should last from now until near October 23 or 24. We believe the upside move between the end of the basing pattern and the October 26th peak will be very fast and end fairly quickly – so be prepared.
The October 26th price peak will set up a very important component of our final analysis – the peak-to-peak price channel (highlighted in YELLOW now) and will allow us to determine when and where price volatility predicts the breakout move to occur. Our research team believes another bout of extended basing will occur after the October 26th peak that will likely push just below the 2771 support levels (to near 2750) retesting the Support Zone and presenting a “false low price breakout” pattern that may sucker many longs out of the market (and potentially set up massive short seller pressures in the market). This move may be critical to the eventual upside breakout that we are predicting.
Think of it like this, Fibonacci price theory suggests that price MUST attempt to establish new higher high prices or lower low prices at all times. Failure to accomplish these new price levels results in a consolidating/congesting price trend that typically forms as Pennants or Flags in price. Near the Apex of these pennant/flag formations, false breakouts (or what we call “washout lows or highs”) are common. These are price functions that operate as a “shakeout move” where price searches for direction and where buyers and sellers are stacked on top of one another attempting to ride the next wave. Price MUST attempt to establish a new higher high or lower low – so it must attempt to rally up and break the 2945 level or it must sell off and attempt to break the 2712 level. We expect extreme volatility near or after the November 8 - 12 apex setup. Price could fall deep into the Support Zone before reversing higher with a bigger rally that attempts to run well above the 2945 level.
The vertical blue line is the November 8 date where we expect the absolute bottom to form and where we expect the next big price rally to initiate. Near after this date, we expect the price to rotate with greater volatility and attempt an upside breakout move near or after November 12. The key Fibonacci levels at 2771 & 2829 are certain to become key price rotation levels near this November 8 - 12 price breakout.
At this point, we have outlined some very detailed and structured price rotation levels that should clearly help you understand what is transpiring within the US Equities markets right now. If you take only one thing away from reading this article, please understand the Support Zone that we’ve highlighted on our charts is super critical to the ability for the US Equities markets to continue to push higher. If this level is completely breached by lower prices (prices falling all the way below these price channels on the Daily chart, above), then our predictions of price rotation, extended basing and an ultimate upside price breakout are invalid. This Support Zone MUST hold for our analysis to become valid.
This level of research and understanding as related to technical and price analysis is not something one stumbles upon blindly. This takes years of study, practice, research, and understanding to be able to “see into the future” as we do. Sure, anyone that understands basic trend lines and Fibonacci concepts can draw some lines on a chart – but their overall success rate will quickly illustrate their true understanding of the markets. Take a minute to visit the Technical Traders website and read some of our recent research posts and pay attention to how we accurately predicted a 5 - 8% price correction 3+ weeks before this recent move happened.
Ask yourself, how did we know it was going to happen and how did we know it would stop near 2700? Visit The Technical Traders "Free Research"
To read all of our recent research posts or read how we predicted this downside price move by clicking here: Trading Model Suggests Falling Stock Prices for U.S. Elections
Chris Vermeulen
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