Prepare for Unknown Price Action as New Highs are Reached

The ES and NQ are very close to breaking out to new all time highs this week and possibly over the next few weeks. The NQ is very close to these new high levels already. Traders must not take this move for granted as increased volatility and a very real chance for a price correction become even greater once we break into “new high territory”.

This upside move has taken almost 5 months to climb back from the December 2018 lows. It has been a very dramatic rally to say the least. We’ve seen dozens of professional analysts suggest the markets would rotate lower all the way up this rally. It seems as though everyone wanted to be right that the market top in October 2018 was going to be the start of something big. We were one of the few analysts that called the market accurately. Our September 17, 2018 analysis called for almost every leg of this price swing over the past 7+ months. We stuck by our research while others were skeptical and doubting our research. We stuck to it because we believe in our work and modeling tools.

Now, our modeling tools are suggesting we could be setting up for a pretty big increase in volatility over the next 2~3 months with the potential for bigger price rotation into May/June 2019. As we are reading our modeling system results, the key elements are that price will achieve new all-time highs, the price will increase in volatility and Gold should begin an upside price move over the next 2~5+ weeks. The move in Gold suggests one of two things may happen, or both. The US Dollar may weaken or the US stock market may correct a bit based on some economic event or outside foreign economic event.

Either way, the move in Gold suggests that increased volatility is almost a sure thing over the next 60 to 90 days. The only reason Gold would rise is if there is some increased fear factor throughout the planet in regards to the protection of assets and fear of some unknown event. Therefore, if our analysis is correct and Gold does rise as we have indicated, then something is about to create a big increase in volatility.

The key to all of this is that the ES and NQ will move into NEW HIGH territory before this volatility increase begins to become apparent.

This ES Weekly chart shows just how close the ES (S&P500 Futures) are too new all-time highs. The ES needs to climb another 41 points (+1.41%) before it touches the previous all-time high levels. That is really only one of two good upside days. Once it breaks the 2947 level, then the 3000 psychological level becomes a very real target.

This NQ Weekly chart shows that the NQ is really just inches away from breaking to new all-time highs. The NQ only needs to rally 24.50 points (+0.31%) before the 7731 level is breached. We believe this move will happen very early this week and we could see the NQ push all the way above the 8000 level in short order. Our Fibonacci price modeling system is suggesting 9130 and 9625 levels may become the ultimate highs – but it is still very early to tell at this stage of our research.

Back in July and August 2018, we started warning that the end of 2018 and all of 2019 were going to be very good years for skilled traders. We’ve seen a nearly 3800+ point price swing in the NQ and a +1200 point price swing in the ES. Let’s face it, folks, these are very big moves and if you had been capable of trading these moves efficiently, this is the type of price rotation that makes millionaires out of average traders.

Get ready, because the rest of 2019 and almost all of 2020 are going to be just as exciting to trade so be sure to get our trade signals. We’ll see you on the other side of “new all-time highs” for the U.S. Stock market here soon.

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Chris Vermeulen

Watch the Financial Sector for the Next Topping Pattern

A very interesting price pattern is setting up in the financial sector that could lead to a very big move in the US & Global markets. Remember how in 2008-09, the Financial sector and Insurance sector were some of the biggest hit stock sectors to prompt a global market crisis? Well, the next few weeks and months for the financial sector are setting up to be critical for our future expectations of the US stock market and global economy.

Right now, many of the financial sector stocks are poised near an upper price channel that must be breached/broken before any further upside price advance can take place. The current trend has been bullish as prices have rallied off the December 2018 lows. Yet, we are acutely aware of the bigger price channels that could become critical to our future decision making. If there is any price weakness near these upper price channel levels and any downside price rotation, the downside potential for the price is massive and could lead to bigger concerns.

Let’s start off by taking a look at these Monthly charts…

This first Monthly Bank Of America chart is best at showing the price channel (in YELLOW) as well as a key Fibonacci price level (highlighted by the MAGENTA line). We’ve also highlighted a price zone with a green shaded box that we believe is key support/resistance for the current price trend.

As you can see from this chart, since early February 2018, the overall trend has shifted into a sideways bearish trend. The price recovery from December 2018 was impressive, yes, but it is still rotating within this sideways/bearish price channel. Our belief is that this YELLOW upper price channel level MUST be broken in order for the price to continue higher at this point. Any failure to accomplish this will result in a price reversal that could precipitate a 30% price decline in the value of BAC. In other words, “it is do-or-die time – again”.

This Monthly JPM chart shows a similar pattern, yet the price channel is a bit more narrow visually. We have almost the same setup in JPM as we do in BAC. The same channels, the same type of Fibonacci price support level, the same type of sideways price support zone (the shaded box) and the same overall setup. As traders, we have to watch for these types of setup and be aware of the risks that could unfold with a collapse of the financial sector over the next few weeks.

We believe the next few weeks could be critical for the financial sector and for the overall markets. If weakness hits the financial sector as global growth continues to stagnate we could enter a period where the global perception of the future 12~24 months may change. Right now, perception has been relatively optimistic in the global stock markets. Most traders have been optimistic that the markets will recover and a US/China trade deal will get settled. The biggest concern has been the EU and the growth of the European countries.

What if that suddenly changed?

We are not saying it will or that we know anything special about this setup. We are just suggesting that the Monthly charts, above, are suggesting that price will either break above this upper price channel or fail to break this level and move lower. We are suggesting that, as skilled traders, we need to be acutely aware of the risks within the financial sector right now and prepare for either outcome.

This last chart, a Weekly FAS chart, shows a more detailed view of this same price rotation and sideways expanding wedge/channel formation. Pay very close attention to the shaded support channel shown with the GREEN BOX on this chart. Any price rotation within this level should be considered “within a support channel” and not a real risk initially. We want to see price break above the upper price channel fairly quickly, within the next 2 to 5+ weeks, and we can to see it establish a new high (above $78 on this chart) to confirm a new bullish price trend. Once this happens, we’ll be watching for further price rotation and setups. If it fails to happen, then the RED DOWN ARROW is the most likely outcome given the current price setup.

Any downside price move in the Financial sector would have to be associated with some decreased future expectations by investors. Thus, our bigger concern is that something is lurking just below the surface right now that could pull the floor out from under this sector. Is it a surprise Fed rate increase? Is it some news from the EU? Is it a sudden increase in credit defaults? What is the “other shoe” – so to say.

Be prepared. If all goes well, then we’ll know within a few more weeks if the upside price rally will continue or if we need to start digging for clues as to why the support for the financial sector is eroding. This really is a “do or die” setup in the financial sector and we urge all traders to pay very close attention to this sector going forward. We believe it will be the leading sector for any major price weakness across the global markets.

Do you want to find a team of dedicated researchers and traders that can help you find and execute better trades in 2019 and beyond? Please visit The Technical Traders to learn how we can help you prepare for the big moves in the global markets and find better opportunities for greater success in the future. Our team of researchers and traders continue to scan the markets for new trades and incredible research for all our members and followers.

Chris Vermeulen

Are You Ready For The Next Move in Natural Gas?

Historically, April has been a pretty consistent upside opportunity in Natural Gas for over 20 years. Over the past 24+ years, the upside opportunity in Natural Gas has been accurate over 68% of the time with the average upside potential ranging from $0.60 to $0.85. With Natural Gas sitting down near recent lows and seeing as though we are still fairly early in the month of April, our researchers believe the opportunity still exists for some quick profits in UNG with an upside move from below $23.95 to a target level of $26 to $28 (roughly +9 to +18%).

The downside risk is rather limited with clear support visible below the recent lows (near $22.75) and a historical likelihood of any further downside price swing being below 33%. Our research team believes an opportunity to establish new longs in UNG below the current Daily price gap (below $23.50) would be ideal.

Historical data mining shows that average upside rallies at this time of the year are typically ranging just below $1. Thus, the upside potential for this move being about +9 to +12% should be sufficient for quick profits. Skilled traders can hold a small portion of the trade for any potential run beyond these initial target levels, but we caution traders that $28.50 to $29.00 is an area of strong resistance. Our last trade in natural gas with subscribers netted us 30% profit in UGAZ within 10 days back in February.

Our research team is still waiting for the Daily Upside Gap to fill with prices below $23.50 before we look to enter any new trades. We have been patiently waiting for the bottom in Natural Gas to form knowing that we have this trade setup with a relatively high success rate. Keep an eye on Natural Gas and look for any good entries below $23.50 in UNG – the deeper the better. Our Fibonacci modeling systems are already suggesting a bottom has set up and any upside price move above $24.30 will likely prompt a bigger rally towards $26 to $28.

Are you ready for this next move? Want to know how we can help you find and execute better trades? 55 years of combined experience in researching and trading makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text.

Our newsletter, Technical Trading Mastery book, and Trading Courses are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.

Chris Vermeulen

Crude Oil Nearing Resistance - Could a New Top Form Here?

The recent recovery in Crude Oil has, partially, been based on increasing expectations of a global economic recovery taking place and the continued news that the US/China will work out a trade deal. Crude inventories. Just last week U.S. Crude Oil inventories came in at +7.2 million barrels vs. expectations of -425,000 barrels. Additionally, concerns in Syria and Libya are pushing prices a bit higher as well. Whenever there are supply concerns or uncertainty out of this region, prices tend to rise.

The facts remain very dynamic for Oil. The U.S. is continuing to produce more and more oil and is expected to become a “net exporter” of oil this year. Economic issues will, eventually, resolve themselves, yet we don’t know the final outcome of these trade deals or how the economy will react to any milestones that are required within the final settlement. And, again, these continuing issues in Libya, Syria and near this region are likely to cause some increased levels of uncertainty over the next 60+ days.

Our researchers, at The Technical Traders, believe the $65.00 level will act as resistance to this current upswing. We believe the upside price move may continue to levels near $67.50 before weakening and beginning a topping formation. We believe our expectation that precious metals will bottom near April 21~24 is key to understanding the dynamics of this move in oil. As long as FEAR does not enter the market, then Oil will likely react to impulse factors exclusively related to oil. Once Gold breaks out above $1500 per ounce, our belief is that oil will react to fear factors related to some broader economic event driving investors into precious metals.

Therefore, we are urging traders to be cautious of the upside price swing in Oil at the moment. Yes, we believe the upside will continue for at least another 10~15 days (possibly changing direction near April 21~24). Yes, we believe current global dynamics support moderately higher Oil prices. Yet, we feel these factors may change within the next 20~45 days as we believe some increased fear levels are about to hit the global markets.

At this point, we would urge Bullish Oil traders to start to become more cautious of any downside risks and begin to prepare for increased volatility. We don’t have any real clue as to how this move will setup, but we do believe our other research support increased volatility within the Crude Oil markets and the potential for a new downside price swing before any further upside move sets up.

Please take a minute to review this research post from January 31, 2019 > Learning From our SP500, Gold and Oil Research & Profit.

We’ve recently launched a new technology solution for our members that delivers our incredible research and trading solutions. You can also visit The Technical Traders Free Research to learn more about our research team and past article. 20129 is going to continue to be an incredible year for skilled traders – you won’t want to miss these big moves that are setting up.

Chris Vermeulen

Waiting for the Russell 2000 to Confirm the Next Big Move

While we have recently suggested the US stock market is poised for further upside price activity with a moderately strong upside price “bias”, our researchers continue to believe the U.S. stock markets will not break out to the upside until the Russell 2000 breaks the current price channel, Bull Flag, formation. Even though the U.S. stock markets open with a gap higher this week, skilled traders must pay attention to how the Mid-Caps and the Russell 2000 are moving throughout this move.

As we continue to advise our clients that the upside pricing cycle in the U.S. stock market is being underestimated, see this research post: we also believe that increased volatility and price rotation will continue to drive larger rotations in price before the final breakout upside move takes place. We want to continue to warn traders that we still don’t have any confirmed upside breakout with price continuing to stay within this price channel in the Russell 2000. Eventually, when and if the price does breakout to the upside, we will have a very clear indication that continued higher prices and a larger upside move is happening. Until then, we need to stay cautious about the types and levels of rotation that continue within the markets.

Recently, volatility has started to increase as can be seen in this VIX chart. If the Russell 2000 is not able to break this trend channel with this current upside price move, then we fully expect continued price rotation in the U.S. stock markets and another increase in the VIX as this rotation takes place. The NQ recently rotated downward by nearly 4% while historical volatility continues to narrow. When volatility diminishes in extended price trends, we’ve learned to expect aggressive price rotation can become more of a concern. We expect the VIX to spike above 16~18 on moderate volatility as we get closer to the cycle inflection date near June/July 2019.

Volatility Index – VIX chart by TradingView

Overall, our researchers believe the upside price bias in the U.S. stock market will continue for another 30+ days as our research and predictions regarding precious metals and the longer term equities price cycles continue to play out. Skilled traders need to be aware that this upside price bias may include larger price rotation and volatility as we get closer to the May/June/July 2019 cycle inflection points. Stay aware of the risks as 4~6%+ price rotations should be expected over the next 30+ days throughout this upside price bias.

Do you want to find a team of dedicated researchers and traders that can help you find and execute better trades in 2019 and beyond? Please visit The Technical Traders to learn how we can help you prepare for the big moves in the global markets and find better opportunities for greater success in the future. Our team of researchers and traders continue to scan the markets for new trades and unique opportunities.

Natural Gas Sets Up Another Buying Opportunity

Recently, we warned that Natural Gas may set up another opportunity for traders to buy into a support zone below $2.70 with a selling range near or above $3.00. Our upside target zone is between $3.25 and $3.45. The price of Natural Gas has recently fallen below $2.69 and we believe this could be the start of a setup for skilled traders to identify key buying opportunity in preparation for a quick +8% to +15% upside swing.

Historically, March and April have been pretty solid months for Natural Gas. Let’s go over the historical data using three different seasonality charts which all point to higher prices.

Taking a look at the data, above for both March and April it appears we should have a positive price outcome over the next 20+ trading sessions. Thus, we can determine that the likelihood of a positive price swing between now and the end of April is highly likely.

When we take a look at the chart data to see how our BUY and SELL zones are setting up, it becomes clear that any opportunity to BUY into the lower support channel, with a moderate degree of risk, could result in a very nice profit potential of between $0.35 to $0.70 on data that supports the Bullish potential as a 200%~220% advantage over downside potential.

Take a look at the data that we are presenting and try to understand that these types of historical price triggers are not foolproof, yet they do provide a clear advantage. They allow us to see if and when there is any type of advantage to our decision making and if we can identify any real opportunity for future success. We believe any further downside price activity in Natural Gas will result in additional opportunities for Long trades with $2.45 being our absolute low entry target. Our upside exit target would be any level above $2.95, or higher, and our ultimate target objective would be $3.15 or higher. Our last trade in natural gas (UGAZ) gave us 30% return in just two weeks in February!

This could be another opportunity for a trader to target a quick 8% to 15% swing trade in Natural Gas over the next 20+ days. Time to put Natural Gas on your radar again!

Are you ready for this next move? Want to know how we can help you find and execute better trades? Visit The Technical Traders Right Here to get our, technical indicators, market analysis, daily videos and trade alerts.

Chris Vermeulen
Technical Traders Ltd.

20 Days Left to Find Buying Opportunities in Gold

Our researchers have been glued to Gold, Silver and the Precious Metals sector for many months. We believe the current setup in Gold is a once in a lifetime opportunity for skilled traders to stake positions below $1300 before a potentially incredible upside price move. We’ve been alerting our members and follower to this opportunity since well before the October/December 2018 downside price rotation in the U.S. markets.

October 5, 2018: Prepare for a Gold and Silver Rally

December 9, 2018: Waiting for Gold to Erupt

Jan 25, 2018: Why Everyone is Talking About Gold and Silver

Additionally, our researchers called the bottom in the U.S. equities markets and warned of an incredible upside price rotation setting up just before the actual price bottom occurred on December 24, 2018.

December 26, 2018: Has The Equities Sell Off Reached a Bottom Yet

Our research continues to suggest that Gold and Silver will rotate within a fairly narrow range over the next 3-5 weeks before setting up a likely price bottom near April 21st, 2019. We’ve been predicting this bottom formation for many months and have been warning our followers to prepare for this move and grab opportunities below $1300 when they set up.

This first chart, a Monthly chart showing our TT Charger price modeling system, clearly illustrates the strength of this bullish price trend and the initiation of this trend back in early 2016. One of the strengths of the TT Charger modeling system is that it establishes a number of key price data points and trend factors. The background color highlighted ranges show price range breadth and range expansion or contraction. The dual channel facets show where price is likely to find support and resistance. The DOT LEVELS show where critical support or resistance is in terms of the overall trend channels.

Right now, we are still in a bullish trend with key support near $1165. The Dual Channel system is showing the $1260 to $1285 level is currently the most likely active support levels just below current price. Thus, we could see a move to near these levels over the next 3+ weeks and I would suggest skilled traders jump on this opportunity. The Range system is showing a current $250~350 price range, thus, any upside price breakout could easily rally within this range and push prices at least $250+ higher than current levels – likely well above $1550. If range expansion sets up, we could see prices well above $1750.

We’ve authored hundreds of research posts over the past 12+ months and the one thing that we continue to mention is that Fibonacci price theory continues to operate on the premise that “price must always attempt to find and establish new price highs or lows – at all times”. Please keep this in mind as we continue.

Take a look at the TT Charger chart, above, and the raw Monthly price chart, below. Price must always attempt to find and establish new price highs or lows – so where is price going based on the most recent price rotations? Let’s review…

After rallying in early 2016 to establish a price high of $1377.50, gold immediately rotated downward to establish a higher low near $1124.50. The $1377.50 high price was a “new price high” in terms of previous rotational highs while the $1124.50 low was a higher low price rotation point. Thus, a failed “new price low”.

Since these two price points, Gold has settled into a sideways price channel where new price highs and lows have been attempted, but have failed to breakout out of the existing previous high and low price levels. As a technician of price, we can immediately identify this as a possible “Pennant or Flag” formation. With the last “new price level” being a “new price high” we still believe that Gold will attempt to break above the recent high price levels and attempt a much bigger upside price swing.

Our analysis suggests the April 21st date as a critical date for the potential price bottom in Gold and Silver. Our belief is that this date will like result in a near term momentum bottom in price. Where price may fall, briefly, below $1290 and rotate into a “washout low” price rotation. The opportunity for this move could come 3-5 days before or after the April 21st date.

This last chart, a Monthly price chart, illustrating the Pennant/Flag formation in Gold should be the clearest example we can provide that Gold will soon break out to the upside and rally extensively higher if our research and analysis are correct. The momentum that has built up over the past 2+ years, as well as the global demand for Gold by central banks and by investors as a hedging instrument, could prompt Gold and Silver to rally at least 50~60% in this first upside breakout wave – resulting in $1900 gold prices. Silver could rally to well above $18-$19 in a similar move and the number our researchers believe may become the upside target in Silver is $21.

This big picture chart and technical pattern could still take months to unfold if the price is to test the lower end of the trading range at $1225. If our analysis is correct, Gold and Silver could begin an upside price breakout shortly after April 21st (very likely to become evident in early May 2019). The upside potential for this move is at least $1550 in Gold and at least $18 in Silver.

Please understand that any upside breakout in Gold and Silver will likely be associated with general global market weakness including the potential for some type of global crisis event. This could be related to the EU, BREXIT, China, France or any other nation burdened by debt, dealing with election turmoil or related to social or economic angst. We could almost throw a dart at a map of the globe and hit some area that is poised for some type of economic crisis.

Our last buy signal for gold and gold miners was in Sept 2018 and subscribers and our team profited from that $100 gold rally. This next opportunity here is to understand that we only have about 20-25 days to search out and isolate the best entry prices we can find in Gold and Silver before our April 21st momentum bottom date hits. This means we need to prepare for this upside breakout move in Precious Metals and prepare our other open positions for the possibility of extended downside pricing concerns. If you read our continued research posts, you’ll understand that we believe the U.S. stock market will rotate a bit lower prior to this April 21st date and rally as well.

We believe the U.S. equities markets will become a safe haven, like Gold, where foreign investors can balance the strength of the U.S. Dollar with the strong U.S. economy and continued equity price appreciation while more fragile nations deal with economic crisis events and debt concerns. Thus, we believe capital will flood the US markets after April 21st as evidence of these economic concerns drives foreign investors into U.S. equities.

Take a minute to find out why Technical Traders Ltd. is quickly becoming one of the best research and trading services you can find anywhere on the planet. We are about to launch a new technology product to assist our members and we continue to deliver incredible research posts, like this one, where we can highlight our proprietary price modeling systems and adaptive learning solutions.

 If you want to stay ahead of these markets moves and find greater success in 2019 and beyond Join Our Wealth Trading Newsletter Today.

Chris Vermeulen

Countdown to the Precious Metals Breakout Rally - Here is Our Targeted Entry Levels

If you have been following our research over the past few months, you already know that we’ve called just about every major move in Gold over the past 14+ months. Recently, we called for Gold to rally to $1300 area, establish a minor peak, stall and retrace back to setup a momentum base pattern. We predicted this move to take place back in January 2019 – nearly 30+ days before it happened.

Now, we are publishing this research post to alert you that we are about 15~30 days away from the momentum base setup in Gold which will likely mirror in Silver. Thus, we have about 20+ days to look for and target entry opportunities in both Gold and Silver before this momentum bottom/base sets up.

This Monthly Gold chart, below, shows you the historic peaks that make up a current resistance level near 1370. This level is critical in understanding how the momentum base and following breakout will occur. This resistance level must be broken before the upside rally can continue above $1400, then $1500. Ultimately, the momentum base we are expecting for form before April 21st is the “last base” to setup before a much bigger upside price move takes place. In other words, pay attention over the next 30 days before this move happens.

This next Monthly Silver chart is the real gem of the precious metals world. The upside potential for Silver is actually much bigger than Gold currently. Any breakout move will likely see Silver push well above $30 per ounce and we just need to watch the $18.90 level for signs the breakout is beginning. Silver will follow a similar basing patter as Gold. We expect only about 30 days of buying opportunity left before this basing pattern is completed. Again, watch the April 21st date as the key date for the breakout move to begin.

Palladium has reached our initial Fibonacci upside price targets. We expect price to consolidated and potentially rotate near the $1500 price level. Ideally, price could fall below the $1300 price level and target the $1100 area before finding any real support. As long as industrial demand continues for Palladium, we expect to see continued upside price activity over the long run. Right now, we are expecting a price contraction as global industrial demand may falter a bit.

Please consider the research we are presenting to you today. Our predictive modeling systems have been calling the metals markets quite accurately over the past 14+ months. If our prediction of a momentum base on or near April 21st is correct, then we should begin to see an incredible upside price swing in Gold and Silver shortly after this date. You won’t want to miss this one – trust us. There will be time to catch this move when it starts – it could be an extended upside move.

Pay attention and put April 21st on your calendar now.

If you like our research and our level of insight into the markets, then take a minute to visit our site to learn how we help our clients find and execute for success. We’ve been calling these market moves almost perfectly over the past 18+ months. Learn how our research team can help you stay ahead of these swings in price and find new opportunities for skilled traders. Take a minute to see how we can help you find and execute better trades by visiting The Technical Traders today.

Chris Vermeulen
Technical Traders Ltd.

Saudi Arabia's "Mini Oil Embargo" May Backfire

On October 20, 1973, Saudi King Faisal announced KSA was joining in an oil embargo against the United States and Europe in favor of the Arab position in the Yom Kippur War. In an interview with international media, King Faisal said:

“America's complete Israeli support against the Arabs makes it extremely difficult for us to continue to supply the United States with oil, or even remain friends with the United States."

The price of oil quadrupled in short order, a few months. The oil shortage in America was managed by gasoline rationing by President Nixon. Drivers could buy gasoline on “odd” or “even” days, depending on the last digit of their license plate. There was also a maximum dollar amount set on purchases of $10. Motorists often had to wait in line for an hour to buy gas.

The economic impact on the U.S. and the world economy was devastating. It caused a massive recession in 1974-75, even though the embargo was lifted in March 1974. The Saudis and other OPEC producers learned how “inelastic” (i.e., non-responsive to price) gasoline demand was and their ability to stuff their coffers even with small cuts to production.

However, this episode led to legislation to build the Strategic Petroleum Reserve (SPR) as a means to offset future supply disruptions and even deter them. At present, the SPR contains roughly 650 million barrels of crude oil located in underground salt domes across the Gulf Coast.

The drawdown capacity is rated at 4.4 million barrels per day. And supplies can begin flowing into the pipeline system with 13 days of a presidential order to commence.

Saudi’s Mini Oil Embargo 

Saudi Arabia appears to be attempting to starve the US of oil supplies in a “mini-embargo.” The idea would be to signal to the world that oil supplies are lower than otherwise would be reported internationally.

In the week ending February 22nd, imports from Saudi Arabia totaled 346,000 b/d, the lowest one-week level in the data series going back to 2010. The four-week trend of 491,000 b/d was also the lowest, and 23 percent lower than a year ago. This level does not even meet the requirements of Saudi Aramco’s Motiva refinery at Port Arthur, Texas, which has a capacity of 636,500 b/d.

Despite the lack of Saudi barrels, U.S. crude stocks have nevertheless built by 4.4 million barrels since the end of December. That is because crude production is 1.9 million barrels per day higher in the year-to-date v. last year. “Other supplies,” primarily natural gas liquids are 536,000 b/d higher in that same comparison. Meanwhile, net crude imports, including exports, were 1.877 million barrels per day lower in the year-to-date v. last year. Crude inputs to refineries were 89,000 b/d higher in that same comparison.

Trump Tweet

President Trump warned OPEC on February 25th: “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike - fragile!”

The Saudi mini-embargo to the U.S. may backfire by angering him. It would be a simple matter to replace Saudi imports altogether with a drawdown from the SPR until U.S. production rises another 500,000 b/d. Furthermore, the U.S. could replace Saudi barrels with imports from other sources, Iraq for example.

Conclusions

The Saudi ploy to drain U.S. crude inventories in support of oil prices is doomed to failure. U.S. domestic supply has risen greatly, and the net import need has dropped dramatically in the past year. The demand for OPEC’s oil is projected to drop by 1.0 million barrels per day in 2019. In 2020, the EIA projects that the U.S. will be a net oil exporter.

Furthermore, it could backfire if Trump calls for the NOPEC legislation – No Oil Producing and Exporting Cartels Act - to be passed. The House Judiciary Committee approved the bill. America's vulnerability to Saudi embargoes has long passed.

Check back to see my next post!

Robert Boslego
INO Contributor - Energies

Gold and Silver Prepare for a Momentum Rally - Here’s our Call on the Next Price Rotation

Today we warn of a potential downside price rotation in precious metals that may last 3 - 5+ weeks as metals set up for a massive breakout rally which we believe will start in late April or early May. Our custom indicators are suggesting that precious metals, and the general U.S. stock markets, may be setting up for a bit of a reprieve rotation after a very impressive recovery. Be patient as we believe this pullback in prices will provide an excellent buying opportunity for the eventual momentum rally setting up in about 30+ days.​

Let’s start by looking at our Custom Market Volatility indicators. The Weekly chart below highlights the recent recovery in the U.S. stock market since the December 24th, 2018 lows and also shows that the current recovery level is sitting right at a 61.8% Fibonacci level. It is our belief that a period of general price weakness will begin to unfold over the next 10 - 15+ days in the U.S. stock market. This rotation is very healthy for the next leg higher – the momentum rally we have been suggesting will take place in the near future.

We believe the downside rotation in the U.S. stock market will be the result of renewed calm from expectations that the global economy may begin a recovery process as the US/China trade issues and other geopolitical issues seem to become more resolved. We believe the recent upside move in the US stock markets were a flight to safety for many foreign investors fearing that US/China trade issues would result in very harsh outcomes near March 1st. If the trade issues appear to be close to a resolution, this flight to safety trade may wane a bit over the next 10 - 20+ days as emerging markets may see a dramatic upside bounce in valuations.

How does this relate to Gold and Silver? It is very likely that the upside pricing pressure in precious metals will stall a bit as the global equities markets take center stage. If our analysis is correct, the developed markets will contract while the emerging markets take focus. This falls right into line with our analysis that the US stock markets will pause/rotate over the next 10~20+ days in preparation for a larger upside price swing.

Our custom Gold/Silver Index is showing that precious metals are trading in a sideways Pennant/Flag formation near levels that have historically been resistance. We still believe the upside in the precious metals market over the long term is substantial, yet we believe the news of a US/China trade resolution and the resulting rally in the emerging markets will remove much of the upside pricing pressure in the precious metals markets for about 15+ days before momentum support is found.

Our researchers believe the timing of this move is right for a short term swing trade. Be prepared for rotation in nearly all the global markets and be prepared for emerging markets to see an upside price rally as a result of positive news from the U.S. and China over the next 2+ weeks.

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Chris Vermeulen
The Technical Traders