Technology Sector Set For A Rebound?

There has been quite a bit of chatter about the FANG stocks recently.  In fact, the entire Technology Sector has taken a beating over the past 30+ days.  Our research team, at Technical Traders Ltd., believes the Technology sector is setting up for a 15%+ price rebound from these recent lows and we want to alert our followers to be prepared for this move.

Let’s start by taking a look at a 1 Month S&P Heat Map showing just how distressed certain sectors are in terms of price valuations.  The Brighter Red highlighted symbols represent a price decrease of at least -6.7% to well above -10% over the past 30 days.  It is pretty easy to see the entire Technology, Technology Services, Financial, and Consumer Goods sectors are all under some pricing pressure.  What interests us is we call the “capital shift” that has been taking place over the past 4+ years.

We have authored research posts suggesting that a global capital shift has been taking place on the back of multiple global QE attempts to support the global economies.  The premise of our theory is that capital is constantly seeking the safest locations to be deployed with the highest potential for returns.  Prior to the US Fed raising interest rates over the past 14+ months, the US Real Estate market was a perfect example of this shift in capital.  Additionally, over the past 3+ years, the US Technology sector has been another great example of this shift in capital.  As the Emerging Market boob cycle went bust, capital went in search of better targets.  As the Oil market went bust, resulting in currency pricing pressures, capital continued to search out the best, most stable, investments and growth opportunities.  Our opinion is most of that capital found its way into the US stock market (into technology, biotech, finance, and healthcare).

We believe this capital shift is now under pressure across the globe to identify and execute for longer-term returns and we believe the recent price rotation in the US Equities markets may give this capital further incentive to redeploy into the US Equities market.

Capital MUST find suitable locations for growth, protection, and healthy longer-term returns.  One can’t simply keep moving billions of dollars of capital around to various investments every few weeks.  Currency concerns are constantly a worry for global investors.  Placing your capital into the wrong investment could result in a net loss because currency valuations may destroy your trading profits if you are not cautious.  Global concerns regarding the Arab nations, oil production, Asia/China trade/economic issues and the never-ending European Union issues really only leave one location on the planet that is somewhat immune from extended risk – the US Equities market.

Our research team believes this recent price rotation will turn into an excellent buying opportunity for select sectors over the next 60+ days.  The trick to being successful with this move is the proper timing of the trades.  If you really want to know when is the best time to pull the trigger, then you really want to follow our research and consider joining our other member/subscribers because we provide them with much more detail than is included in these public posts.  Still, we believe the charts are screaming at us to consider the longer term “capital shift” that is taking place and to understand the true nature of price – it always seeks out new highs or new lows and capital is always seeking the best returns in the safest environment (away from extreme risk).

Take a look at these charts.

First, the Weekly QQQ.  The price channel is clear.  The Support level is clear.  The lows of February 2018 are the critical price levels that we want to be concerned with.  The current price rotation falls to just below the lower YELLOW price channel and stalls.  As long as our critical support level is not breached, the QQQ should set up an extended, yet volatile, price bottom before the end of this year and begin to rally back up toward the $190 price level.

This Weekly TECL chart shows a similar picture to the QQQ chart.  The price channels are clear.  The Support level is clear.  The lows of February 2018 are still acting as “deeper price lows” that indicate we should consider these levels critical to see any major price reversal to the downside.  Our critical support level is just below recent price lows, thus we should be expecting the price to stall near this level and the upside price target near $172 is close to $50 away.  As long as this support holds and the price continues to hammer out a bottom near or below the $130 level, this rotation could play out for a very nice 20~30% upside price move.

We are not urging our followers to BUY anything just yet.  Certainly, be aware of the potential for an upside move as this price bottom plays out over time.  Use your own skills to find and execute proper trades or visit www.TheTechnicalTraders.com to learn our team of professionals can assist you.

Our proprietary price modeling systems will tell us exactly when and how to enter these trades and we want our followers to understand the type of rotation that we believe is currently playing out in the markets.  We believe this recent move to the downside was the result of very mild volatility prior to this move, computerized trading models setting large sell orders near the 2715 price level on the S&P in preparation for just this type of move.  Once the price reacted to the US Fed, general price rotation and selling pressure and fell below 2715, the sell programs kicked in and drove the price down to levels near support.  So far, prices have not attempted to move much lower and that is a very good sign for the current trend channels and upside price trend.  Watch how this plays out and get ready for some great trades over the next 6+ months.

Please take a moment to visit www.TheTechnicalTraders.com to see how we can help you find and execute better trades.  Our team of researchers and technical traders follow these markets every day to try to find and understand the dynamics at play globally.  Take a minute to read how we predicted this downward market move 3+ weeks before it happened with our predictive modeling systems.  If you don’t think it is possible to know what the markets are going to do weeks in advance, then take a minute to review our work and see for yourself how we predicted this move to the 2700 level in the S&P.  Now, get ready for some great trades that will be setting up over the next 4+ months.  Q3 and Q4 of 2018 are going to set up some really big opportunities for skilled traders.

Chris Vermeulen

There has been quite a bit of information and opinion in the news recently regarding the recent downside price action in the US Equities markets.  We’ve seen everything from “The sky is falling” to “The markets will rally into the end of the year”.  If you’ve been following our research and analysis, you already know what we believe will be the likely outcome and if not – keep reading.

There are a number of key components of the global economy that are of interest currently; US Treasuries, Precious Metals, Emerging Markets, the European Union, Trade Issues and Capital Shifts.

When one considers the scope of the entire global market environment in terms of these individual issues, a fairly clear picture of what is really happening begins to take shape.  Here is our summarized opinion of the current state of the global markets.

Capital is shifting (again) as the US Technology and high return sectors come under pressure.  What happens, typically, in this type of environment is that capital moves away from risk (into cash or other suitable investments) as these sectors continue to weaken.  Capital will return to these sectors once the risk factor diminishes or abates.  Once the S&P fell below the 2915 level, a number of Sell Programs generated extensive downside pressure on the markets – in a way, creating a “wash-out low” price rotation fairly early in this move.  Investors and capital will return into these sectors over time as they find support and wash out the extended volatility that is currently at play in the markets.

This capital shift is not unique to just the US markets though, there are other factors involved as well.  News that Asian investors have been pulling out of the US Real Estate markets at a record pace, as well as the US Fed actions raising rates recently, has put additional pressure on the valuation/pricing levels in the US equities market.  This is likely the reason why Gold and Silver rocketed higher last week.  This pricing pressure, even though it was known prior to this downside price move, was not much of a concern for investors because the US stock market indexes didn’t show worry or concern for this issue.  There was no real issue with downside pricing concerns.  Once the S&P broke that 2915 level and the sell programs kicked in, this became a real issue for many.

Yet, the longer-term perspective of this market has not changed much since early 2016.  Take a look at this chart that highlights the pricing channels established in the S&P of the past 20 years.  Each of these paired price channels originates at a low price point and reflect price range, slope and volatility as the progress further to the right.  Notice how the original (GREEN) and most recent low-price range (GOLD) reflect a broader price range where volatility was higher and the slope is slightly lower than the shorter-term price channels.  These reflect broader price support channels and help us to understand the core slope levels of price advance.

The shorter-term price channels (YELLOW, MAGENTA, BLUE & ORANGE) illustrate the “impulse channels” that are a result of localized or consensus advances.  In other words, these types of advances are the result of some impetus event like Quantitative Easing, policy changes, US Election results or any combination of social & economic improvement factors.  Price is always attempting to rotate as it attempts to establish new highs and lows.

We try to stress one key Fibonacci Price Theory component to all of our followers:

“Price MUST always attempt to seek out and establish new price highs or new price lows”

This one premise of Fibonacci Price Theory is so important to understand in the greater context of price movement.  On a Daily chart, the recent downward price swing may look frightening, but on this Monthly chart, it falls right in line with the ORANGE price channels (which happen to be the most recent and most aggressively upward sloping price channels over the past 20+ years).  Additionally, the price has advanced above the Upper GOLD price channel range and back into the BLUE price channel range in late 2017 and early 2018.  At this point, price appears to be accelerating quite well and these new support levels (BLUE, ORANGE, and GOLD) are critical to understanding the basics of Fibonacci Price Theory.

So, as you listen to the talking heads on TV and in the news cycles, please understand that true price theory teaches us that “until price breaks recent critical lower or higher price levels, the market price will always attempt to rotate in an effort to seek out and establish new price highs or new price lows”.

This rotation is very healthy for the markets, overall, and this price rotation may, eventually, prove to be a retest of price support before a further advance.  Our research team believes the low established near 2712 will likely continue to operate as critical price support as this price rotation continues to extend.  Our research team also believe a new price advance phase will become established shortly after November 8~12.  Our predictive modeling systems suggest a new price upswing will begin to take place after these November dates.

We urge all of our followers to visit our website, www.TheTechnicalTraders.com, to learn how our dedicated team of researchers and technical traders can assist you in finding and executing better trades, stay ahead of these markets move and properly prepare for the opportunities created by these swings in price.  Additionally, take a minute to review some of our past research posts, www.TheTechnicalTraders.com/FreeMarketResearch/, to see how we predicted this downside price rotation over 3 weeks before it happened.  It pays to have a dedicated team helping you understand and profit from these market price swings.

Bitcoin Breakdown May Push Prices Below $5000

Recent market turmoil across the global stock markets has refocused investors on the concerns of global economics, trade, and geopolitical issues – away from cryptocurrencies.  The biggest, Bitcoin, has been under extended pricing pressure recently and our research team believes Bitcoin will breach the $6000 level to the downside fairly quickly as extended global market downtrends continue.

The premise of our analysis is simple, the factors weighing on foreign investors and Bitcoin investors are that currencies are fluctuating wildly, local stock markets are declining and local economies may be contracting.  All of this operates as a means for investors to turn to a “protectionism” stance where they attempt to protect capital/cash and attempt to limit downside risks.  The fact that Bitcoin has yet to break higher and has continued to fall under further pricing and adoption pressure means those investors that were hungry for the next great rally may be getting tired of waiting for this next move – if it ever happens.  Our belief is that any downside pressure in Bitcoin below $5800 will likely push many crypto enthusiasts over the end and prompt them to sell out before prices attempt to move down further.

Our research team believes a deeper downside price rotation is setting up in Bitcoin that will push prices below the $5000 level before the end of this year.  The uncertainty of the global equities markets are creating an environment where cryptos have simply lost their appeal.  There has been no real substantial upside price move over the past 6+ months and the FLAG formation setting up is a very real warning sign that the eventual breakout move could be very dangerous.

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Additionally, when we add our proprietary Advanced Learning Cycle system to the research, which points to much lower price rotation over the next 30+ days, we begin to see the very real possibility that Bitcoin could fall below $5000 very quickly and potentially target $4000 as an ultimate low.

As much as we would like to inform our followers that we believe Bitcoin will rally back to $18k fairly quickly, that is simply not the case.  All of our indicators are suggesting that Bitcoin will fall to below $5000, and possibly towards $4000, before any real support is found.  If you are a bitcoin believer, be aware that you may have a substantial opportunity to use your skills at this price swing plays out.  Looking to buy back in near $4000 is much better than trying to hold for an additional $2000 loss.

Visit www.TheTechnicalTraders.com to learn more about our research team and resources to help you become a better trader.  Be prepared and build your skills to target greater success with our dedicated team.  Read some of our other research to see for yourself how well we’ve been calling these recent market moves.  Isn’t it time you invested in your future success?

Chris Vermeulen

US Transportation Index Suggests Bottom May Be Forming

Our research team, at www.TheTechnicalTraders.com, is alerting our members that the Transportation Index has reached its first level of support near 10,500 and this level may be the start of an extended bottoming formation.  If you have been following our research posts, you already know that we predicted this recent downside price swing over 3 weeks ago with our Adaptive Learning Predictive Modeling systems.  You will also understand that our modeling systems suggest this move may not end till early November (somewhere between November 8~12).  Keeping this in mind, we are now alerting you to be prepared for the following.

This Weekly US Transportation Index chart highlights what we believe will become support for the US stock markets.  The 10,500 level, highlighted by the GREEN horizontal line, is a key support level that goes all the way back to late 2017 and early 2018.  This level will likely present strong support for the Transportation Index and, thus, for the US stock markets in general.  We do expect the continued downside pricing pressures to test this level over the next few weeks, but we are beginning to think we may be setting up for an extended bottom formation that may include many weeks of volatility and sideways price rotation.

If the 10,500 level is breached, secondary support exists at the 10,000 level (only 500 pts below).  As dramatic as that move will be, if it happens, this suggests that any attempt to move to near this level could be considered a “wash-out low” price rotation – a typical bottom formation.  At this point, we believe the 10,500 level is holding as we are not seeing extended downside price action in the current market.  If the US stock market was severely threatened by internal or external factors, we believe we would have seen much deeper follow-through the day after the massive price collapse.

What does an extended bottoming formation look like and what should we expect over the next few weeks?  Please take a look at this Daily Transportation Index chart that shows an earlier example of extended bottoming and bottom price rotation before a recent upside price move.  This example clearly shows how the initial bottom setup (highlighted in YELLOW) forms prior to an extended period or “basing” or bottoming price rotation.  We don’t expect many months of this type of bottoming price rotation.  We expect this bottom to setup and form over a period of about 2~3 weeks before a new uptrend begins to form.  Overall, this is a good example of how an extended bottom is formed before an upside price move initiates.

 

We urge you to pay attention to our posts and to visit www.TheTechnicalTraders.com to learn more about how we can help you navigate these markets.  Please take a minute to visit our website and learn how we continue to work to assist our members with clear and effective analysis, research and trading signals every day.  It really makes a world of difference when you have a dedicated team of researchers using specialized proprietary price modeling systems to help you stay ahead of these market moves.

Chris Vermeulen

Dollar Engulfing Bearish Pattern Warns Of Dollar Weakness

A unique setup has occurred in the UUP (Invesco DB US Dollar Index) that resembles an Engulfing Bearish type of pattern (even though it is not technically an Engulfing Bearish pattern).  Technically, an Engulfing Bearish pattern should consist of a green candle followed by a larger red candle whereas the red candle’s body (the open to close range) completely engulfs the previous candle’s body.  In the instance we are highlighting in this article, a unique variation of what we’ll call a “Completely Filled Engulfing Bearish” pattern is setting up.

This is when two red candles setup in an Engulfing Bearish type of formation – omitting the requirement that the first candle be green.  Japanese Candlesticks help us to identify the psychology of the market price in relation to our other specialized tools.  We believe this formation is important because both of the red candlesticks that make up this pattern opened much higher than the previous bar’s close and dramatically sold off into the close of each session.  We believe this type of rotation clearly illustrated that price is reaching resistance near $25.50 and pushing lower because of this strong resistance.  We also believe this resistance/pattern will setup a downside price move in the US Dollar very soon.

 

Below, we have highlighted the traditional formation of an Engulfing Bearish Candlestick pattern.  The example chart, to the right of this definition, shows another variation of the Engulfing Bearish pattern setting up after three minor sideways candles.  The interpretation of this Bearish Reversal pattern is subjective in terms of understanding the psychological representation of the Engulfing Bearish pattern.  This pattern represents a total reversal of power within the price bar where the buyers were in control at the open (resulting in a higher opening price) and lost control through the trading session to allow the sellers to drive the price much lower into the close of the trading session.  Thus, the Engulfing Bearish pattern represents a “key pivot point” in price that may prompt a larger downside move in the near future.

When we consider the totality of this US Dollar move, a falling US Dollar will result in a number of other relative price swings across almost all of the major global markets.  One thing that is immediate for our research team is that any price decrease in the US Dollar will likely prompt a further advance in the price of Commodities.  Commodities are tied to the US Dollar because almost all trade is based in UD Dollar value.  When the US Dollar rises, commodities become more expensive for foreign buyers.  When the US Dollar falls, commodities become less expensive for foreign buyers.  Therefore, any price decline in the value of the US Dollar should prompt an increase in commodity prices.

Additionally, any sharp decline in the price of the US Dollar should also prompt a rally in Precious Metals and Mining Stocks.  Precious Metals react to US Dollar pricing just like Commodities do.  As the US Dollar strengthens, Precious Metals tend to fall as a means to counter the increased cost basis for these metals.  Under normal economic pressures, the precious metals react to pricing based on fear of economic crisis events, raw demand and global currency valuations.  The few things that can dramatically alter this relationship are massive increases or decreases in demand and any type of global economic crisis events.  When these impetus factor act together, the Precious Metals sector can rocket higher or decline quickly as the fear or demand issues increase and decrease over time.

 

Our belief is that the US Dollar will rotate lower over the next few weeks headed into the uncertainty of the US mid-term elections and that the Commodities and Precious Metals markets will likely increase in relation to this US Dollar weakness.  These potential price swings present very clear opportunities for skilled traders. Our research team follows almost all of the global markets in an attempt to keep our subscribers aware of opportunities and trends that exist in the global markets.  If you want to see why our subscribers stay with us and believe in our ability to assist them in finding greater success, then visit www.TheTechnicalTraders.com

Transportation Breakdown Hinting to Global Economic Weakness?

Our research team highlighted the recent breakdown in the Transportation Index ($TRAN) as a very strong sign that the global economy and US economy may be starting to show early signs of weakness.

The Transportation Index typically leads the markets by about 3 to 6 months (on average).  When we see a big breakdown in the Transportation index, as we’ve seen recently, it immediately raises red flags that one or more component of the global markets may be crashing.  At this point in the Seasonal Cycle, one could expect the Transportation Index to rotate lower a bit.  Our concern is that global economic factors may be driving China and other markets into much deeper corrections – which could cause the US and other world markets to correct a bit further.

The recent price rotation is shown near the right side of this Daily Transportation Index clearly shows the recent downtrend and the current breakdown in price.  This price breakdown cleared recent support near 11,290 and is currently resting near another support level near 10,980.  Any further breakdown of the Transportation Index below the 10,980 level would suggest we could be looking at a very deep -10% to -15% price move.

Our research team will continue to monitor the Transportation Index, and all the other major US and Foreign markets, for additional signs of strength or weakness in the future.  Right now, be prepared for what may become further price weakness in the US Indices as this breakdown in the Transportation Index suggests.  Visit www.TheTechnicalTraders.com to learn more about our services for skilled traders and to see how we can help you navigate these markets.

Chris Vermeulen

Will Oil Follow Historical Patterns?

Our research team, at Technical Traders Ltd., has been very interested in Oil recently as the current rally appears to have rotated lower near a top.  Our predictive modeling systems, predictive cycle analysis and other tools suggest Oil/Energy may be setting up for a downward price trend.  This may be an excellent opportunity for skilled traders to identify profitable trades as this trend matures.

This Daily Crude Oil Chart shows our Predictive Cycle Modeling system and shows the projected price cycles out into the future.  One can see the downside projected price levels very clearly.  This cycle analysis tool does not predict price levels, it just predicts price trends.  We can’t look at this indicator and think that $72 ppb is a price target (near the right side).  We can only assume that a downward price cycle is about to hit and use historical price as a guide to where price may attempt to fall to.

 

Using our adaptive Fibonacci price modeling tool, we can see from the chart below that downside price targets are currently near $72 ppb, $67 ppb and $65 ppb.  Therefore, we believe the $72 price level will become the first level of support, where our price cycle tool suggests a small rotation may occur, and the $67 price level may become the ultimate downside target level.

 

We believe the current price rotation in Oil/Energy may be setting up for a decent downside price move with a lower price target at or below $67 ppb.  Historical data shows that this type of price action, downward, at this time is historically accurate and predictable.  If you want to know how you can profit from this move and learn how our research team continues to find and execute superior trades for our members, visit www.TheTechnicalTraders.com to learn more.

Chris Vermeulen

Prepare for a Gold/Silver Rally

Our modeling systems are suggesting that Gold and Silver will begin a new upside rally very quickly.  We wrote about how our modeling systems are suggesting this upside move could be a tremendous opportunity for investors over 2 weeks ago.  Our initial target is near the $1245 level and our second target is near the $1309 level.  Recent lows help to confirm this upside projection as the most recent low prices created a price rotation that supports further upside price action.  What is needed right now is a push above $1220 before we begin to see the real acceleration higher.

The Daily Gold chart, below, shows our Fibonacci modeling system suggesting that $1235 to $1250 are the upside target ranges.  Near these levels, we should expect some price rotation before another leg higher begins.  Currently, support near $1180 is the floor in Gold.

If you are a fan of the shiny metals and want to know what we believe is likely to happen over the next 8+ months, then please take a moment to join the Wealth Building Newsletter to learn how we can help you find and execute better trades.  We provide even more detailed research and predictive price modeling for our subscribers and we believe this bottom setting up in Gold may be the last time you see $1200 prices for a while.  Check out www.TheTechnicalTraders.com today.

Chris Vermeulen

Expect Q3 Earnings Price Surprises

Our focus is on developing and deploying very specialized price modeling and predictive analysis systems.  Our objective is to inform our members of these potential price moves and to assist them in finding successful trading opportunities.  We are alerting all of our followers of a potential move today, because we believe this move could frighten some investors as we expect price rotation as Q3 earnings data is released just before the November 2018 mid-term elections.

The weekly $INDU (Dow Industrial Average) chart shows our Adaptive Predictive Learning (ADL) modeling system at work.  In this example, we asked our ADL system what it believed would be the most likely outcome originating from July 23, 2018.  The reason we selected this date is because this weekly price bar prompted the current upside price move.  This type of price trigger can often generate highly accurate future predictive price data.  This bar consisted of 11 unique price markers that predict future price moves, first lower, then back to the upside, with a range of probability from 83% to 96%.  The initial downside price move suggests that an initial -800 to -1000 pt move (-4%) will take place before November 10, 2018.  Subsequently, price should begin to move upward again after the US mid-term elections and through the end of 2018.

 

In conclusion, October is known as a weak month for US equities so get ready for price volatility and expect the Tech-heavy NASDAQ to rotate in a larger range than the S&P and the $INDU. Additionally, expect the VIX to increase in value over the next 30+ days as October passes.

I will admit the charts in July/Early September were showing signs of a market correction in mind September but no bearish reversal pattern formed and price continued higher. During this time we closed out a position in YINN for 14% profit and another 4.3% in the IYT ETF. This goes to show how we can profit to the long side even when we are expecting a sell off the markets. We trade based on technical analysis and use our ADL and other forecasting analysis to add more conviction to a move, but we don’t trade based on predictions along.

If you want to know how we help our members find and execute for greater success, visit www.TheTechnicalTraders.com to see our completed trades for this year and learn how we can help you find great opportunities now and in the future.

Chris Vermeulen