Gold Hits Our $1,300 Price Target - What’s Next?

Early trading on January 4, 2019 saw Gold trade just above $1300 per ounce. Confirming our price target from our research and posts on November 24, 2018. The importance of this move cannot be underestimated. Traders and investors need to understand the recent rally in the metals markets are attempting to alert us that FEAR is starting to re-enter the market and that 2019 could start the year off with some extended volatility.

Our research has shown that Gold will likely rotate between $1270 - $1315 over the next 30 - 60 days before attempting to begin another rally. Our next upside price target is near $1500. We will continue to post articles to help everyone understand when and how this move will happen. We expect Gold to rotate near the $1300 level for at least another 30 days before attempting another price rally.

Pay attention to the Support Zone on this Daily Gold chart and understand that price rotation is very healthy for the metals markets at this point. A reprieve in this recent Gold rally would allow the start of 2019 to prompt a moderate rally in the U.S. stock market as well as allow a continued capital shift to take place. As capital re-enters the global equities markets, investors will be seeking the best investment opportunities and safest environments for their capital. Our belief is that the U.S. stock market will become the top tier solution for many of these investments.

This Weekly Gold chart shows our Adaptive Fibonacci price modeling system and why price rotation is important at this time. The highlighted GREEN Fibonacci price target levels on the right side of this chart are projecting upside price objectives for the move that started near mid-November. We can see that $1325 (or so) is the highest target level and that $1273 to $1288 are the lower levels. This suggests that we have already reached the upper resistance range and a mild price rotation would allow for the price to establish a new fractal low rotation that would establish NEW upside Fibonacci price targets. In other words, we much have some price rotation to support the next leg higher in the Metals markets

If you’ve been following our research and comments on the past 90+ days. You’ll already know that we’ve nailed many of these market moves. The SPY, Natural Gas, Oil, Gold, Small Caps and so many more. We’ve been calling for a massive price bottom in the U.S. stock market since well before the November 6th U.S. Elections. Our proprietary predictive modeling systems called the huge moves in Oil, Natural Gas, Gold/Silver, and many others. If you were not profiting from these moves, then you need to visit The Technical Traders to learn how we can help you in 2019. Our memberships are very inexpensive and the support we provide you is incredible for skilled traders.

 Want a team to help you create success in 2019, then visit The Technical Traders and get started creating success.

Chris Vermeulen

Natural Gas Trades Through Our $3.20 Target – What Next?

Our trading partner Chris Vermeulen and his research team at the Technical Traders have been nailing the market moves with their proprietary price modeling tools. Our December 12, 2018 call that Natural Gas would collapse nearly 30% after reaching a price peak was a very bold call. Who would have thought that predictive price modeling could be so accurate and could identify a move like this – or call for what is expected to happen next?

Back when Natural Gas breached the $4.60 - 4.80 range, our ADL predictive modeling system was suggesting a massive price anomaly was setting up. These types of triggers are becoming more common as volatility in the general markets increases. The ADL system suggested that a massive -30% downside price move would happen before the end of February 2019.

Now, as that trade has completed and our targets have been reached, we are alerting our followers that natural gas should begin to consolidate between $2.80 and $3.30 before attempting to rocket back above $4.00 near April or May 2019. Read our original analysis of Natural Gas to learn why these moves provide an incredible opportunity for traders and visit The Technical Traders Free Research page to read up on our early 2019 market predictions.

Join our other members in making 2019 an incredibly successful year. We believe 2019 will provide exceptional opportunities for skilled traders and we’ll be happy to share our proprietary research and analysis with you as a member of Technical Traders Ltd. You really don’t want to miss these moves and this incredible opportunity. Think about it, one trade like this with a -30% selloff followed by a 24% price rally could make your entire year. Imagine being able to find trades like this every week or month for success. Visit The Technical Traders and get ready to make 2019 a fantastic year of success no matter if we have a bull market or bear market.

Chris Vermeulen

What to Expect Within the First 3 to 5 Months of 2019

As we put an end to 2018 we watched the incredible price rotation in the U.S. stock market. Now it is time for traders to take stock of the incredible opportunities that are set up for early 2019 and beyond. Our research team, at The Technical Traders, has put together some truly incredible longer term Adaptive Dynamic Learning (ADL) predictive price modeling system charts that will help you understand and identify incredible opportunities that should play out in early 2019. We know you will not find this type of analysis anywhere else on the planet and we know just how valuable these charts are too skilled traders. So, get ready for some incredible moves – as impossible as they may seem.

Let’s get started with crude oil. This Monthly chart of Crude showing our ADL price modeling system is clearly indicating the first few months of 2019 will include increased price volatility. One thing to pay attention to as we review these charts are the BLUE TRIANGLES, which is where we asked the ADL predictive modeling system for a detailed analysis, and the CYAN, YELLOW, and WHITE DASHED LINES, which is where the ADL system is showing us the highest probability price outcome into the future. On this chart, we can see that the predicted price levels of the past have been relatively close to where the price has closed on each monthly price bar.

Going into the future, we can see 3 to 4 months of price volatility between $50 and $65 (roughly) with rotating higher/lower price objectives. We interpret this as greatly increased price volatility with the potential of supply events disrupting global expectations in oil. These could be intermediate term price rotations that keep the price within our $50-65 price range, or they could be large range, very dramatic price rotations as a result of massive global supply events.

What we can suggest to you, today, is that early 2019 should provide some very interesting short to intermediate term price triggers in oil before price settles back below $50 near June or July 2019.

Next, the Financials/Banks appear to be setting up a very deep “price anomaly” pattern that could become one of the biggest price reversals of early 2019. It is not very often that a 90%+ price move sets up in the markets and this could be just such an event. The ADL predictive price modeling system identifies the highest probability price outcomes by mapping and tracking price and technical setups. You can see from this chart we are asking the ADL modeling system to show us what to expect from the February 2018 price bar.

This price bar is critical because it was a wide range price rotation setup that should be very unique in the ADL DNA mapping. This bar only had 5 similar DNA markers and projected some of the predicted price level, the ones drawn in WHITE, as 50/50 outcomes. The last few outcomes, drawn in YELLOW, reported as 100% probabilities for these predicted target price levels. Therefore, we consider this a very high probability outcome of a very deep “price anomaly” setup that should result in some incredible upside opportunities for skilled traders.

Additionally, if this analysis is correct, the U.S. stock market may, very quickly, rally to attempt to establish new all time highs again in early 2019. This move could happen well before May or June 2019. Be prepared for this move because, currently, there are a bunch of shorts that are predicting a 1929 style market crash. Those shorts are going to get crushed in a massive short squeeze if our ADL predictive modeling results are accurate.

Next, we’ll review the SPY Monthly chart. And, as you can likely see, this chart is similar to the FAS chart above with a very deep price anomaly setup. In fact, you are going to see a few of these types of price anomaly trigger setups in this research post because the very deep downside price move, recently, has prompted these types of price triggers. One thing to consider about price rotation and the recent downside price move is that these types of price swings are very healthy for the overall markets. They act as a method of re-confirming value, support and future expectations by devaluing/deleveraging over extended price levels and shaking up the markets. We think of these types of moves as a “healthy price rotation” that allows the markets to re-establish value and future expectations vs. a type of crisis event.

In addition to this being a very healthy price rotation, we also believe, fundamentally, very little has changed in the past 4+ months in regards to global market events. Europe and China/Asia are still working through their own issues. Credit cycles and global market valuations have been decreasing since early 2018. Overall, the global markets have decreased in value by over 27% since January 2018.

What many traders have failed to understand is that the U.S. markets broke lower on a reaction to the U.S. Fed’s recent rate raises while the rest of the global markets had already experienced a 24% valuation decline. In other words, the U.S. markets broke lower in “capitulation” of expectations that the U.S. Fed may have pushed rates beyond expected boundaries. Now that the U.S. markets have revalued near these recent lows and 2019 is about to start, new expectations are settling into traders minds regarding the current market values and future expectations.

Back to our ADL chart of the SPY, you can see the predicted levels of the ADL system matching with price bars fairly accurately. The current bar, the big red one, is reported as a “neutral probability” (WHITE) target price level which means the ADL system could not determine any viable probability for this price target. The following YELLOW price targets range from 57% probability to 94% probability going out 8+ months. Our interpretation of this is that the current price bar, being a neutral price target near $279.60 reports as a “basis price” in the range of previous price rotation. We believe this level, $279.60, will quickly be recovered in early 2019 before a continued rally pushes prices above $300 sometime around April or May 2019.

Next, one of our favorite charts to gauge the markets and the future expectations of market sectors, the Transportation Index. And, again, you can see a similar price anomaly setup on this chart. The one thing that is very interesting on this chart is that the current price target level for the December 2018 bar has a relatively high ADL probability (68.373%) and the next targeted price level (Jan 2019, near 11,210) has a very high 88.25% probability.

It is our opinion that the Transportation Index will rocket higher in early 2019 and reach levels above 10,800 before the end of March 2019 (possibly much earlier). The ADL predictive modeling system is suggesting that the Transportation Index will stay near 11,500 for much of 2019 and we believe the U.S. stock market and major indexes will reach new all time highs near the start of Q2 2019 and continue to push a bit higher through the middle of 2019.

It is very likely that the U.S. market continues to outperform many other global markets throughout much of 2019 and beyond. We’ve read many expectations that the U.S. markets may fall into some level of “complacency” in 2019, but we are not seeing that in our research. We are seeing the US markets continue to report pricing strength in comparison to other global markets and we believe the US economy will continue to stay strong throughout at least the first 2 to 3 quarters of 2019 – possibly much longer.

Again, this incredible opportunity for skilled traders is showing a potential +23% upside rally that should start in early 2019. Be prepared for some great trades in 2019.

Lastly, the US Dollar. With so many people expecting the US markets to push lower in 2019 and the resulting pressures on the U.S. Dollar (as some analysts expect the Yuan to strengthen while the US Dollar weakens), our ADL predictive modeling systems is suggesting that the US Dollar is currently undervalued by nearly 8%. The early 2019 ADL price targets are near or above $27.50 with the current price being near $25.50. This represents a 7.8% to 8.3% upside price anomaly if our ADL predictive price targets are accurate. This ADL trigger bar, where the BLUE TRIANGLES are on this chart, was a fairly rare price/technical pattern, or DNA marker. It is predicting a 100% probability of these price levels being accurate based on this rare DNA marker. We interpret that outcome as a breakout above $26 in UUP would help to confirm this ADL analysis and the potential that $27.50 to $28.00 is a viable longer term price objective.

Overall, we don’t see any reason to be bearish the U.S. Dollar at the moment. Our ADL predictive modeling system is suggesting the U.S. Dollar is currently undervalued by about 8% and is predicting early 2019 upside potential which indicates the potential for greater global currency volatility in the Euro, the Yuan, and other widely held currencies. If out ADL predictive pricing levels are accurate, it would indicate that we are going to see global currency pricing pressures hit many global currencies fairly early in 2019. Possibly, this could be related to some geopolitical event or some type of isolated credit market event (Italy, Spain, EU, China, Asia). Again, we don’t know what the event will be, but we can assure you that our ADL predictive modeling system is suggesting the U.S. Dollar will increase in value by about 8% in early 2019.

These incredible setups and opportunities for skilled traders can only be found with our proprietary Adaptive Dynamic Learning (ADL) predictive modeling tool. Call it a New Year’s gift or whatever you want to call it. Within this research article, we’ve shown you what we believe are some of the most incredible trading setups to start 2019 and we’re confident in our model’s ability to accurately find and call these moves. Want to learn what other setups our predictive cycle, Fibonacci and ADL systems are showing us? Want to know what the metals are going to do in 2019? Want to know which sectors are going to move and when? Visit The Technical Traders to learn how we help our members find and execute better trades.

Visit The Technical Traders Free Research to review some of our earlier research posts and to see how we’ve been calling these moves accurately for months.

Want to make 2019 a great year with incredible opportunities for success? Join our other members at The Technical Traders today and make 2019 an incredibly successful year.

Chris Vermeulen

Silver Starts a Breakout Move Higher

Watch Silver, folks. This quiet shiny metal is starting a move that could be very foretelling of global market concerns and risks. Early on December 26, 2018, Silver broke through recent resistance, to the upside, with a relatively large 2.8%+ upside move. Why is this so important to traders? Because Silver is the “sleeper metal” that is typically the last to react to global economic concerns. Once Silver starts to move to the upside with a renewed bullish trend, we believe this move would indicate that bigger players are starting to accumulate Silver as a safe haven for future economic concerns/crisis events.

This Daily chart of Silver shows the December 26 upside breakout move. We can clearly see the breakout above $15.00 and the historical resistance just below $15.00. This move is extremely important in the context of the total risk play that has recently played out through the past two months. Take a look as how quiet the Silver market has been over the past few months. Take a look at how Silver reacted only moderately to the recent market selloff and Fed statements. There was no real “fear” exhibited in the metals markets or in Silver over the past 60+ days. Yet, today, there is some real fear that is playing out in the price of Silver.

This next Weekly Silver chart helps us to understand the total scope of this move and what we could expect to see as an immediate upside price target. Our Adaptive Fibonacci Price modeling system is suggesting that $16.00 is an immediate upside price target and is showing us the current trend is bullish and that price volatility is increasing. Overall, we could see a move well above $17.00 on an extended run in the metals.

Watch how this “sleeper metal” plays out over the next few weeks and months. This upside breakout is very important to investors for the simple reason that it indicates a renewed level of “fear” is entering the markets and we could be starting a very big upside move in the metals markets again. The last time Silver entered a massive bullish phase it shot up over 400%. If a similar move happens again in the near future, Silver could reach a price level near $60-65 per ounce.

Want to know how to position your investments to take advantage of these types of moves and learn how to capture greater opportunities in the markets? 2019 is setting up to be an incredible year for traders with the skills and insight to find and execute these types of trades. We have already been positioning our members for this move and we believe 2019 will provide incredible opportunities for all skilled traders. Take a minute to visit The Technical Traders to learn how we can help you in 2019 and join our other members in finding greater success.


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Has This Selloff Reached a Bottom Yet?

Everyone wants to know if this selloff has reached a low or bottom yet and what to expect over the next 30 - 60+ days. Since October, the U.S. stock market has reacted to the U.S. Fed raising rates above 2.0% with dramatic downward price moves. The latest raise by the U.S. Fed resulted in a very clear price decline in the markets illustrating the fact that investors don’t expect the markets to recover based on the current geopolitical and economic climate.

Over 5 years ago, our research team developed a financial modeling system that attempted to model the U.S. Fed Funds Rate optimal levels given certain inputs (US GDP, US Population, U.S. Debt, and others). The effort by our team of researchers was to attempt to identify where and when the U.S. Fed should be adjusting rates and when and where the U.S. Fed would make a mistake. The basic premise of our modeling system is that as long as Fed keeps rates within our model’s optimal output parameters, the U.S. (and presumably global) economy should continue to operate without massive disruption events unless some outside event (think Europe, China or another massive economic collapse) disrupts the ability of the U.S. economy from operating efficiently. We’ve included a screen capture of the current FFR modeling results below.

This model operates on the premise that U.S. debt, population, and GDP will continue to increase at similar levels to 2004-2012. We can see that our model predicted that the U.S. Fed should have begun raising rates in 2013-2014 and continued to push rates above 1.25% before the end of 2015. Then, the U.S. Fed should have raised rates gradually to near 2.0% by 2017-2018 – never breaching the 2.1250% level. Our model expects the U.S. Fed to decrease rates to near 1.4 - 1.5% in early 2019 and for rates to rotate between 1.25%~2.0% between now and 2020. Eventually, after 2021, our model expects the US Fed to begin to normalize rates near 1.5-1.75% for an extended period of time.

Additionally, our Custom Market Cap index has reached a very low level (historically extremely low) and is likely to result in a major price bottom formation or, at least, a pause in this downward price move that may result in some renewed forward optimism going forward. Although we would like to be able to announce that the market has reached a major price bottom and that we are “calling a bottom” in this move, we simply can’t call this as a bottom yet. We have to wait to see if and when the markets confirm a price bottom before we can’t attempt any real call in the markets. You can see from our Custom Market Cap Index that the index level is very near historically low levels (below $4.00 – near the RED line) and that these levels have resulted in major price low points historically. We are expecting the price to pause over the next week or so near these $3.50 levels and attempt to set up a rotational support level before attempting another price swing. As of right now, we believe there is fairly strong opportunity for a price bottom to set up, yet these are still very early indicators of a major price bottom and we can’t actually call a bottom yet. If our Custom Market Cap Index does as it has in the past, then we are very close to a bottom formation in the US markets and traders would be wise to wait for technical confirmation of this bottom before jumping into any aggressive long trades.

Lastly, our Custom Global Market Cap Index has also reached levels near the lower deviation channel range over the past 7+ years, which adds further confidence that a potential price bottom may be near to forming in the US markets. As we can see from the chart below, the recent selloff has pushed our Global Market Cap Index to very low levels – from near $198 to near $144; a -27.55% total price decline. Nearing these low levels, we should expect the global markets to attempt to find some support and to potentially hammer out a bottom, yet we are still cautious that this downward price move could breach existing support levels and push even further in to bear market territory.

There are early warning signs that the market may be attempting to form a market bottom and our research team is scanning every available tool we have at out disposal to attempt to assist all of our members and followers. We alerted you to this move back on September 17, 2018 with our ADL predictive modeling system call for a -5 - 8%+ market correction. Little did we know that the U.S. Fed would blow the bottom out of the markets with their push to raise rates above the 2.0% level.

As the U.S. Fed has already breached our Fed Modeling Systems suggested rate levels, the global markets will be attempting to identify key price support in relation to this new pricing pressure and the expectations that debt/credit issues will become more pronounced as rates push higher. In other words, the global markets are attempting to price in the renewed uncertainty that relates to the U.S. Fed pushing rates beyond optimal levels. We expect the markets are close to finding true support near the levels we’ve shown on our Custom Index charts, yet we still need confirmation before we can call it a bottom.

We will continue to update you with our research and analysis as this move plays out and we hope you were able to follow our analysis regarding the Metals, Oil, Energy and other sectors that called many of these massive price swings. We pride ourselves on our analysis and ability to use our proprietary tools to find and execute successful trades for our members. Our ADL predictive price modeling system is still suggesting an upward price move is in the works for the U.S. markets and we are waiting for our “ultimate low price” level to be reached before we expect an upside leg to drive prices higher again. Based on our current research, we may be nearing the point where the markets attempt to hammer out a price bottom – yet time will tell if this is the correct analysis.

Please take a minute to visit The Technical Traders to learn how we help our members find and execute better trades. Recent swings in the markets have made it much more difficult for average traders to find and execute successful short term trades. Learn how we can help you find greater success and read some of our recent research posts by visiting our Free Research section of the Technical Traders.

The SP500 Breaks 2018 February Lows - What Next?

The ES (S&P e-mini contracts) broke the support level from the February 2018 lows immediately after the US Federal Reserve announced a 25 bp rate hike this week. This breakdown below the February 2018 lows is concerning because it indicates that previous support is not holding and we could be in for further downside price activity.

We are preparing a detailed research post for early next week regarding a broad range of US markets as well as how our proprietary price modeling systems are reflecting this recent price move. What we can suggest to all investors is play small positions at the moment and prepare for increased volatility. There is near term support that may come into play soon, but overall the markets are reacting to a deleveraging event that could see prices push below 2400 before finding true support.

Visit The Technical Traders to read all of our recent research posts and see what we believe will be the big movers in 2019.

Chris Vermeulen

Natural Gas Breaks Lower Towards Our $3.00 Target

Just about seven days ago we alerted all of our followers to a massive breakdown move that was about to unfold in Natural Gas. At that time, we predicted the price of Natural Gas would break below $4.30 and fall quickly towards the $3.00 - 3.20 level. Taking a look at that call now, with the price below $3.60, it seems our analysis was perfectly timed.

This Daily Natural Gas chart highlighting our predictive Fibonacci price modeling system shows the downside price targets that are waiting to confirm price support and a potential “deep V bottom formation”. If you recall from our earlier research, we believe this downside move will end rather quickly with a deep V type of price bottom setting up near the end of 2018. This means we expect the price of Natural Gas to begin to rally into 2019 after reaching the $3.00 - 3.20 level soon.

This is an incredible move for skilled traders. We are watching a $2.50 price move in Natural Gas unfold right before our eyes – and it appears this rotation will complete before the end of February 2019. -$1.40 to the downside, then +1.20 to the upside. Just follow the predictive modeling systems and ride it out.

We’ll alert you when the bottom sets up and when the upside move it about to unfold, but for now, we are watching for NG to move into the support zone (near $3.20). Once that level is reached, a technical price bottom should start to set up and the new rally back towards $4.00 will likely start in early January 2019.

Want to learn how our advanced price modeling tools can make calls like this weeks and months in advance? Visit The Technical Traders to learn about our research, services, daily videos, and more solutions to help skilled traders stay ahead of these market moves. Our advanced predictive modeling solutions and years of market research provide our members with a clear advantage you won’t find anywhere else.

Consider joining our services as a Christmas Gift to yourself!

Chris Vermeulen
The Technical Traders

Natural Gas Setup For a Big Move Lower

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

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

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

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