Archive for month: January, 2018

After Nine Positive Years, Many Traders Not Ready for Equities Market Down Turn

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Our research has been “spot on” with regards to the markets for the first few weeks of 2018.  We issued our first trade on Jan 2^nd, plus two very detailed research reports near the end of 2017 and early 2018.  We urge you to review these research posts as they tell you exactly what to expect for the first Quarter in 2018.

 

Continuing this research, we have focused our current effort on the Transportation Index, the US Majors, and the Metals Markets.  The Transportation Index has seen an extensive rally (+19.85%) originating near November 2017.  This incredible upside move correlates with renewed US Tax policies and Economic increases that are sure to drive the US Equity market higher throughout 2018.

 

In theory, the Transportation Index is a measure of economic activity as related to the transportation of goods from port to distribution centers and from distribution centers to retail centers.  The recent jump in the Transportation Index foretells of strong economic activity within the US for at least the next 3 months.

 

One could, and likely should watch the Transportation Index for any signs of weakness or contraction which would indicate an economic slowdown about to unfold.  In order to better understand how the Transportation Index precedes the US Equity markets by 2~5 months, let’s compare the current price activity to that of 2007~08.

 

This first chart is the current Transportation Index and shows how strong the US economic recovery is in relation to the previous year (2017).  As the US economy has continued to strengthen and open up new opportunities, the Transportation Index has related this strength by increasing by near +20% in only a few short months.  This shows us that we should continue to expect a moderate to strong bullish bias for at least the first quarter of 2018 – unless something dramatic changes in relation to economic opportunities.

 

CURRENT TRANSPORTATION INDEX CHART

 

In comparison, this chart (below) is the Transportation Index in 2007~08 which reacted quite differently.  The economic environment was vastly different at this time.  The US Fed had raised rates consecutively over a two year period leading up to a massive debt/credit crisis.  At the same time, the US had a Presidential Election cycle that saw massive uncertainty with regards to regulation, policies and economic opportunities.  Delinquencies as related to debt had already started to climb and the markets reacted to the economic alarms ringing from all corners of the globe.  The Transportation Index formed a classic “rollover top” formation in late 2007 and early 2008 well before the global markets really began to tank.

 

2007~08 TRANSPORTATION INDEX CHART

 

Our analysis points to a very strong first quarter of 2018 within the US and for US Equities.  We believe the economic indicators will continue to perform well and, at least for the next 3 months, will continue to drive strong equity growth.  We do expect some volatility near the end of the first Quarter as well as continued 2~5% price volatility/rotation at times.  There will be levels of contraction in the markets that are natural and healthy for this rally.  So, be prepared for some rotation that could be deeper than what we have seen over the last 6 months.

 

In conclusion, equities are this point are overpriced, and overbought based on the short-term analysis. We should be entering slightly weaker time for large-cap stocks over the next couple weeks before it goes much higher. Because we are still in a full out bull market, Dips Should Be Bought and we will notify members of a new trade once we get another one of these setups.

 

In our next post, we are going to talk about two opportunities in precious metals forming for next week!

 

Read the analysis we presented before the end of 2017 regarding our predictive modeling systems and how we target our research to helping our members.  If you believe our analysis is accurate and timely, then we urge you to subscribe to www.TheTechnicalTraders.com to support our work and to benefit from our signals.  We believe 2018 – 2020 will be the years that strategic trades will outperform all other markets.  Join us in our efforts to find and execute the best trading opportunities and profit from these fantastic setups.

 

Chris Vermeulen
Technical Traders Ltd.

Articles in this issue:

• The Higher Purpose of Gann Theory
• Penetrating the Essense of Gann
• PREPARING FOR THE CRYPTOCURRENCY SWAN EVENT – Pg 10-14
• Price and Time Targets
• Time is Money
• W.D. Ganns Squaring Time and Price
• How to Avoid Trading Traps with Astro-Trading Tools
• The Importance of Trading at Least Two
• The 6.5 Year Cycle in U.S. Stocks
• Trade Directional Price Moves
• The Mental Block shat Stops You from Conquering Your Fear

To view, it now click

https://tradersworld.com/issue68.pdf

Last week, we posted our research showing that the US markets were setting up for a 2018 Q1 rally based on our research using our advanced predictive analysis modeling tools – the Adaptive Dynamic Learning model.  This model attempts to find unique price, technical and indicator patterns in past price bars and then attempts to find similar patterns in newer price bars.  When multiple price bars with similar pattern structures are found, it maps these as “unique genomic structures” and attempt to learn from the future price activities.  This unique modeling system was created by our team of skilled market researchers in an attempt to provide accurate insight into the markets future price swings.

 

In doing so, our predictive analysis modeling systems can attempt to tell us what is the highest likelihood of price activity going out 10, 15 and even 20 daily bars into the future. The forecasted highs and lows you should focus on are the yellow lines. The closer together these yellow lines are (predicted high/predicted low, the more confident we can be that prices should follow this path.  The farther apart they are, the more likely we will see increased volatility and the potential for larger swings in price range.

 

The article we posted last week was titled “2018 First Quarter Rally” for your reference.

 

As of this week, only a few days into the new 2018 trading year, the US markets are already up between 1~2.5% and likely have another 1~3% more upside activity before finding any resistance.  Let’s take a look at some charts.

 

This Weekly chart of the Nasdaq (NQ) clearly shows the expected future price levels and ranges going out nearly three months into the future.  You can see from this chart that the YELLOW LINES are predicting generally higher price levels through the end of February 2018 when a sudden price consolidation is expected.  This will likely result in a 2~5% price decline sometime between February 21 and March 26, 2018.  After this brief rotation, the Adaptive Dynamic Learning modeling system is predicting further price advancements in the range of 2~3% or more before stalling again in late April 2018. So pay attention, any lows in the NQ below 6485 are likely very strong BUY TRIGGERS.

Now, let’s take a look at the SPY on a Weekly basis.

 

The SPY chart is more uniform in structure and alignment with the ADL predictive modeling system.  This tells us that the price volatility for this symbol will be more muted than the NQ Futures chart.  It also tells us that we may not see the same level of volatility enter the SPY till after January 22, 2018 – which is when the first real measurable divergence in predictive price levels happens.

 

The first measurable rally in the SPY in 2018 should be about 2.5~3% from 2017 closing price levels and end near February 12^th or so.  This move will be followed by a very short downside price correction of about -1~2% ending near March 10th~16^th.  The next leg higher could be relatively large with a 3~5% rally through the end of April 2018.

We are predicting that this first Quarter in 2018 will see a continued market rally with a brief pause/stall in price near the end of February or early March.  We believe the Q1 final results will be the  NQ ending 3~5% higher than the 2017 closing price and the SPY ending 5~6% higher than the 2017 closing price.  Are you ready for this move?  Do you know which stock or ETF you should trade for maximum return? We can help you!

 

So far, our predictions about 2018 have been very accurate with this modeling system and you should be able to see the value of “being able to see into the future” with our various forecasting modeling system. Our team of researchers and professionals at Technical Traders Ltd. are here to assist you in finding and executing profitable trades each week with our unique research, modeling tools and trade alerts.  Imagine how much more successful 2018 would be for you if you knew what the rest of the year would look like?

 

Visit www.TheTechnicalTraders.com to learn how we can assist you in finding and executing successful strategies during the next two years as the major trends start to shift and new strategies will be required to profit from elevated volatility and falling prices.  Join today and make 2018 one of your best trading years yet.

 

Chris Vermeulen