Archive for year: 2017
Our research is showing critical Fibonacci extensions are in place for US Major Markets that may be foretelling of a massive market correction. Part of our research is to search for and study events and resources that are a bit abstract. One component of this research is to identify critical price levels and early warning triggers from abstract price data. The major US indexes and most individual all showing price advanced over the past years and many are showing extended price rallies since the US Presidential election on November 8, 2017. Yet, none are as foretelling as our “US Custom Index”.
The INDU is showing a price advance equal to a 1.8765 Fibonacci expansion.
The SPX500 is showing a price advance equal to a 1.9165% Fibonacci expansion.
What is the relevance of these expansions? Many Fibonacci retracements and expansions fail near a n.875 ~ n.9231. Now, you may be asking, “why should I be concerned about failure at these levels?”. The answer is simple, one of the most important components of Fibonacci analysis is an abstract theory regarding “Failure to Succeed or Failure to Fail”. Another very important component of Fibonacci theory is that “price is always attempting to establish new highs or lows”. How this relates to our understand of what to expect in the future depends on expectations that are presented by understanding Fibonacci ratios, price projections and simple key components of the Fibonacci theory.
Without going into too much detail, “Failure to Succeed” is the failure to match or meet expected price objectives or actions. “Failure to Fail” is the ability of price/trends to exceed expectations or objectives and extend beyond expected target levels. Again, price is always attempting to establish new highs or lows within Fibonacci theory. Therefore, success or failure at critical levels means price should attempt to either reverse or extend.
As you are probably well aware, we have been expecting an increase in the VIX to coincide with extensive major market volatility between March 15th and April 24th. So far, the VIX has jumped form the March 15th low over 41%. You can read more about this by reviewing THE VIX ARTICLE. Our analysis, originated in late January, and warns of an extreme potential for massive price movements across the globe. This all depends of a number of factors correlating to prompt these expected swings, but so far, everything we predicted is starting to happen.
VIX Chart
This next chart of the NAS100 Index shows a number of key components at play. First, the 2.618% Fibonacci expansion level is currently providing strong resistance. Additionally, it shows a series of price cycle bottoms that originate from 2014 & 2015 price lows. Lastly, it shows current price highs are also lining up on a 1.50% Fibonacci Expansion from the recent price rotation illustrated by the last red rectangle on the chart. One should pay attention that the two red rectangles are copies of one another and illustrate that price rotation has been in nearly identical volatility ranges since the end of 2014. Only after the US Presidential election was price able to breakout of these ranges and extend to current levels.
Further, the arcing analysis on the chart represents Fibonacci vibrational price analysis. It is designed to show us where and when price may break out of or into new trends/channels. As you can see, the arcs align relatively well with price activity and price has recently extended beyond the most recent arc level on the right edge of the chart.
Combine all of this analysis into a simple message, one would likely resolve the following : Current Fibonacci price extensions are providing clear resistance. Price cycles state we should establish a new price low near April 24th and price has recently extended beyond a vibrational cycle that coincides with Fibonacci resistance. Historical price ranges show us that June 5th, 2017 may begin a new price trend cycle
NAS100 Chart
The “key” in terms of our analysis and understanding of the current market setup is seen on our US Custom Index. This custom index is made up of key components of the US Economy (US Retail, Real Estate, Consumer Finance, Consumer Discretionary and the SPY). The reason we have selected these for our index is we believe they relate a broad scope of “early movers” as related to the overall health of the US economy. In other words, this custom index should relate early strength or weakness in the relation to general US economic activities rather well.
This chart is showing a number of key components, but most important is the YELLOW line near the top which represents a near EXACT 1.272% expansion of price from recent highs set in 2007 (2.272 % expansions from the lows in 2009). The n.272 Fibonacci expansion levels, like most other Fibonacci expansion levels prompt one of two possible outcomes; a. Price congestion followed by further advance, or b. a moderately deep price retracement (often greater than 25% of the recent move).
This chart, as we stated earlier, is the “key to understand the potential of and expectations of all of this analysis. With the VIX expected to “spike” between now and April 24th, the NAS100 chart showing massive expansion (2.618) that is correlating with recent 1.50% resistance and key vibrational resistance and, this Custom Index, pivoting off of critical 1.272% Fib Expansion, near the beginning of our expected VIX expansion, near Fibonacci Vibrational levels on April 10th and near the lower range of a multi-year historical Standard Deviation channel, we are preparing for an immediate potential price rotation (correlating with a spike in the VIX) that may drive equity prices down to near 2016 lows (a drop of potentially 15~20%).
Custom Index Chart
Our analysis is showing that many key elements of cross market analysis are aligning to warn that we may see a moderate term end to the “Trump rally” and a relatively deep retracement that could shake the markets. We are not predicting a 2009 style crash. We are, although, expecting healthy market rotation that will setup additional opportunities for traders to identify profitable trades.
At this point in time, we wanted all of our readers to be aware of the multiple correlations that support our analysis and the fact that volatility is set to start rising. Keeping this in mind, we are positioning ourselves and our clients to take advantage of these expected moves and we will continue to monitor the markets price action to take advantage of opportunities as they form. If you want know more of our unique Momentum Reversal Method (MRM) and our trade setups, please visit www.ActiveTradingPartners.com to learn more.
Back in early February 2017, we posted an article to all our members about how our analysis showed a very strong potential for larger price swings with the potential for a massive explosion in the VIX indicator based on a price cycle pattern we had been studying. Many of you may remember this article, if not Click Here to review the original.
As of right now, only 10 days into our proposed “VIX Spike Window” (from March 12th to April 15th), we thought it would be a good idea to review some of our analysis before we enter the heart of the VIX expansion window (March 25th to April 8th).
Vix Spike Calendar
As you may recall, we expect a, roughly, five month cycle of expanding VIX volatility to continue within the time-frames mentioned above. The peak of this volatility will likely happen between March 25th and April 8th – what we are calling the “heart of the window”. This will likely be a very tumultuous and volatile period where massive rotations in price could occur. Additionally, new or reversal trends would also be key components of this type of expanded volatility. This means active traders have an opportunity to generate some fantastic returns from these moves.
Based on my original analysis from early February, lets summarize how things are expected to play out over the next few weeks for a few key symbols.
As you review our earlier analysis, pay attention to the details we laid out for each symbol. We expected “key top” levels to be reached at the time of the original article followed by price rotation/retracements, followed by more price trending. Pay special attention to the details we discussed for each of these symbols in the first article.
DIA pulled back near 6% (Min Volatility target reached) from recent highs and we are expecting more volatility before any future moves
QQQ pulled back 2.6% and we are expecting a deeper pullback as the volatility explodes in the near future.
XOI has fallen an additional 4.33% and we are expecting this move to continue to near $1075 (an additional -$81.50) before attempting to find a bottom.
GOLD retraced just over 5% from near $1265 and is currently in a solid uptrend. Our current projection is for a move above $1310, followed by a pullback below $1280 (where we want to try to buy), followed by further upside moves to above $1350.
SILVER has retraced nearly 9% (Min Volatility Target Reached) from recent highs and is setting up potential move back above $18.00 or higher.
DIA Chart 
Gold Chart 
Silver Chart 
At this point, we should be very cautious to consider only highly probable trading signals because the expected volatility in the global markets should become more violent and unpredictable. This makes for great short term Momentum Reversal trades though.
Our recent Momentum Reversal Trades have shown fantastic results like UGAZ 74% and NUGT 112%. The possibility of seeing exploding volatility over the next few weeks in combination with massive potential rotation in prices will allow us to find some incredible opportunities for followers of our work and trades.
Remember, the Heart of the volatility window should be from March 25, 2017 to April 8, 2017. You can take advantage of this by follow us at: www.ActiveTradingPartners.com
Chris Vermeulen
Mr. Burkhard Varnholt, Deputy Chief Investment Officer of Credit Suisse, said:
“Whenever. . .”
Last weeks move in Crude Oil, down over 8.8% was triggered by new “Record High” US inventory data and news that OPEC production cuts are near 85% compliance have prompted a breakdown. We have been expecting a breakout move for a few weeks and suspected production would outpace demand, as it has been for many months.
Below is the chart of oil we sent to followers of TheMarketTrendForecast service last week.
Price of oil after the breakdown which we traded SCO inverse fund
With the weekly EIA inventory report stated a huge 8.2 million barrel inventory increase while production levels are, overall, decreasing. This prompted a continued bearish price slide for Oil and Gas related equities. These moves will setup a number of superior opportunities in the future days and weeks for many traders. Initially, we want to be cautious of the impulse price moves and look to establish strategic trades when the opportunity is perfect.
COP Chart
APC Chart
As these price moves play out over the next few days, we urge all traders to be cautious as we are expecting a dramatic increase in global market volatility to begin with just a few days. Our earlier analysis shows a very strong potential for dramatic volatility increases beginning near March 17th. This means these early moves may be “price traps” that catch inexperienced traders.
Most traders will attempt to follow this move and chase it lower. Even though there may be some validity to this method, we’ve found that the optimal entry is based on “Momentum Reversal Strategies”. In other words, waiting for the ideal timing and entry when the markets show signs that a major reversal is about to happen – we call it the Momentum Reversal Method (MRM).
This move in oil is an early warning that traders need to pay attention to. It will likely setup numerous MRM trade setup/entry opportunities over the next few days/weeks. These are the types of price anomalies that allow my MRM trading strategy to hone into finding great trades.
My Momentum Reversal Method (MRM) trading system allows me to follow these moves and take advantage of the most strategic entry positions for quick gains. Most trades last 3~25 days in length and equate to 7%~35% or more in profits. You can even stay up to date with my analysis and trading triggers with my SMS/Text Messaging alerts sent directly to your mobile device.
In closing, don’t chase this move in oil quite yet. Be aware that we are setting up for a much bigger move with much greater opportunities for traders. If you want to stay aware of these opportunities, then visit our web site to learn more, www.ActiveTradingPartners.com
By: John Winston
And Chris Vermeulen
The US is back in the driver seat again as a sustained and growing economic powerhouse – the Trump Economy. Since the November 2016 elections, the US economic data and outlook have been driving investment in US equities as well as select foreign investment opportunities. The reduction in regulations and business friendly Trump administration seems to have unleashed the hoard of cash and opportunity of the past 7+ years. US and foreign business are, again, “wheeling and dealing” with the intent of generating greater profits and more opportunities.
This is the reason I believe the US, as well as certain foreign partners, will see nearly immediate and direct advancement of economic objectives. The amount of capital that could be unleashed over the next 2 years could be well in excess of $2 Trillion as related to business investment, consumer-driven sales and expanded manufacturing capacity will likely drive the US economy into a new leadership role focused on renewed opportunity and activity.
US Manufacturing has recently been in a state of decline since late 2011. I attribute this to uncertainty related to US policies and leadership. The graph, below, does not show the opportunity I see in the future expansion, but it does show that throughout historical periods of economic expansion, relative growth ratios tend to hover near +2.6% to +5.7%. This level of expansion, historically, would relate to the US economy feeling optimistic about future capabilities as well as increasing earning potential.
US Manufacturing Output Chart
Manufacturing will likely grow to near greater than +1% for Q1 2017
Keep the two functions in mind, as opportunities increase and the US economic activity increases, typically hiring and earnings increase as well. This is a sign of a healthy growth phase that may, as it seems it always does, spill over into other foreign markets. Much like the last 1990s and 2003~2006 US economic expansion phases, the historical rates of expansion averaged +4~5%. The contraction periods (recessions : 2001 & 2008) were deep and dangerous, yet the growth phases were lengthy and substantial. Household income growth was a key factor for extended periods of economic expansion.
FRED_MedHHIncome Chart
US Household Income Rising Sharply
As business activity increases, Inventory To Sales Ratios decrease. The rational behind this factor is that sales volumes increase and inventories decrease in relation to new sales activities. Thus, products start flying out of the warehouses and off the shelves. Every US economic expansion phase has been paired with decreasing Inventory To Sales Ratios historically.
TtlBusInventory2SalesRatio Chart
Sharp increase in sales (Decreasing Inventory) after November 2016 elections
In short, this looks like “lift-off” for the US economy – at least for the immediate term perspective. The concerns for investors are still very evident in some of the following graphs. My opinion that the US is still, and has been for decades, the sole driving force behind much of the global economic expansion phases is based on the concept that the US, along with key partners, are the strongest and most mature economies on the planet. I consider most of the immediate partners to the US economy as Japan, Canada, Germany and Great Britain. I’m certain that many of you could add in 2 or 3 others, but I continue to focus on the core elements of the global economic process. Because none of the other global economies are, in my opinion, capable of functioning well without the economic impetus of the four mature growth economies, I continue to believe these four are, and have been, the drivers of global economic growth.
The following chart shows why I believe a dramatic change in US economic activity will drive some level of increased economic activity throughout the world. The combined European and Asian GDP Output graph shows severe contraction in 2013~2015. I can only assume the continued contraction of this measurement of economic activity continued in 2016. An increase of 10~20% of this value would result in a nominal overall increase compared to recent highs. It would take an increase of over 70% for this measurement of economic output to be restored to 2012~2013 levels – yikes!
GDP_EuropAsia Chart
Europe & Asia show sharp declines in economic activities
I attribute much of the GDP decreases in Europe and Asia to two factors; lack of economic expansion in the US and difficult/uncertain global economic policies in Europe and Asia. As the earlier US Manufacturing Output chart shows, the US economic has only recently started to expand. This is related to fears and uncertainty as related to the US election cycle (at least in part). The recent BREXIT news as well as other issues that continue to plague Europe are also key driving factors.
Additionally, more and more frequent news is relating economic concerns and excessive debt levels in China. I can attest that China’s economic reach is far and wide in most of Asia. Any crisis originating in China will result in mini-crisis events throughout most of Asia and parts of Europe. This is, again, why I believe continued strength in the US markets will drive US equities and economies to new highs while any “spill-over” may begin to improve foreign markets as well. But we’ll have to wait for that “spill-over” event to actually start to happen before we see any increased valuations or activity.
European Economic Policy Uncertainty Index Chart
Europe in the midst of uncertainty and constricting economic leadership
How does this relate to me, an active trader? First off, it means I should be focusing on core US equity opportunities and focusing on uncertainty related commodity markets (Gold, Silver, Oil, Gas and others). The uncertainty throughout most of the developed world will drive certain commodities to increased valuations. What has recently happened in India with regards to currencies is already driving global events in precious metals and demand for alternate paper currencies. What happens in France, soon, may likely drive further impetus for increasing valuations in commodities, equities and other markets. The supply data in regards to OIL and GAS is pushing a message that oil may drop to near $30 again. Things are changing quickly and we need to be ready to act and profit from these moves.
US DOW Chart
Gold Chart
The opportunities in foreign markets and in foreign equities will arise again in the future. I can’t predict when, but I can predict that any further increased US economic activity will have a “spill-over” effect on foreign markets and will drive increase valuations – unless something acts to destroy that alignment going forward.
I keep my members alerted to these opportunities and provide more detailed analysis and trading triggers through ATP . If you would like to continue to receive my research and analysis, please take a moment to visit ActiveTradingPartners.com to see how I can help you to achieve greater success. Some of my most recent calls have been outstanding like:
UGAZ 10.7% Profit (Feb 21-23)
ERX 7.7% Profit (Feb 8-9th)
NUGT 112%Profit (Dec 16 – Feb 8th)
All the trades are based on my Momentum Reversal Method (MRM) trading system.
In short, the US stock market is back in full blown bull market with Trump re-energizing things. While I feel a short-term correction is due any day, it is just that, a short-term pullback followed by higher prices into June/July.
Follow my lead and start making money every month with www.ActiveTradingPartners.com
John Winston
Co-Author: Chris Vermeulen