As a technical trader, I like it when multiple charts, indicators, and asset classes agree with each other for trade setups. This short article is to show you some of the things I look at which provide a buy signal for gold stocks.

One of the key trading tips I learned years ago, is that average a sharp price reversal and surge in price, we as traders can buy into the first pullback with a high probability of a continuation in price.

Why is this key trading tip so important?
Because picking bottoms and tops are risky business, and in most cases, we miss them. Thus, we need to know when the next best time to enter this asset is – buy the dip/first pullback!

 

TRADING TECHNICAL ANALYSIS – US DOLLAR INDEX CYCLE BIAS

The blue lines on the chart is a blend of the most active price cycles for the dollar. As you can see the price is expected to move higher over the next 1-3 days, then be under pressure again. When the dollar falls in value, it helps lift the price of gold and gold-related assets like gold stocks.

 

GOLD CYCLE ANALYSIS

Cycle analysis points to higher prices for a few days, but the upside for gold looks fairly limited as its struggling at recent highs (resistance). But as long as gold holds value or grinds higher it should help lift gold stocks higher.

 

GOLD MINERS REVERSAL, POP, AND CYCLE ANALYSIS

This daily chart of GDX gold miners shows a big reversal and pop in price. This sets the stage for a second leg higher once the first pullback in price reaches a buy trigger zone.

GDX 120 MINUTE (2HR CHART) TRADING TECHNICAL ANALYSIS

If you don’t know or understand Fibonacci retracements of 38-50%, or Fibonacci extensions of 61% and 100%, then the lines on the chart below will not make much sense to you. So, let sum things up quickly.

When price retraces (pulls back) 38% – 50% of a recent rally that is where price usually finds support. This is seen on the chart via the green box buy zone.

Once price reaches that buy zone we can then use Fibonacci extensions of 61% and 100% which uses the previous low down at $21 and rally up to $23 as the upside potential from the green box. Price should find minor resistance at the 61% level, and if a pause or pullback takes place at 61%, then 100% target should be reached as well.

On the chart, I have also added the two red resistance levels which happen to fall near our 61% and 100% targets. While this may seem like a coincidence, believe it or not, the more you study and learn to trade technical analysis you will notice the markets are not that random at all!

CONCLUSION

In short, the momentum behind gold mining stocks along with the technical analysis points to higher prices in the week ahead. Nothing in the financial markets are 100% certain, so this may not play out as we expect, but this is how I have been trading technical analysis for 21 years. If you have proper position sizing, risk management, and timely setups like what you see here, you can make a lot of money over time.

If you want to watch my live technical analysis videos each morning before the opening bell, so you know what to expect in the coming session and week ahead join my Technical Traders Wealth Building Newsletter right now!

My articles, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors to explore the tools and techniques that discretionary and algorithmic traders need to profit in today’s competitive markets. Created with the serious trader and investor in mind – whether beginner or professional – our approach will put you on the path to win. Understanding market structure, trend identification, cycle analysis, volatility, volume, when and when to trade, position management, and how to put it all together so that you have a winning edge.

Chris Vermeulen
Founder of Technical Traders Ltd.

Our articles, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors to explore the tools and techniques that discretionary and algorithmic traders need to profit in today’s competitive markets. Created with the serious trader and investor in mind – whether beginner or professional – our approach will put you on the path to win. Understanding market structure, trend identification, cycle analysis, volatility, volume, when and when to trade, position management, and how to put it all together so that you have a winning edge.

BECOME A WINNING TECHNICAL TRADER THIS WEEK!

Our focus is to provide you with updated and accurate market price predictions for all of 2018, we believe we are entering a period that will be fantastic for traders and active investors.  We believe this recent volatility has shaken out the low volatility expectations and will allow the markets to start moving in a more normal rotational mode going forward.  This means we’ll have lots of trading opportunities to profit from.

For those of you who have not been following our research over the past 2 to 3 months, we urge you to visit our Technical Traders Ltd.website to read our published research and to learn how we’ve been calling these moves in the markets for our members.  We called the early 2018 market rally weeks before it started.  We called the lower price rotation over a month before it happened.  We called the bottom in this price correction almost to the day and told our members that we believed a very quick Pennant price formation was set up that will drive prices higher which we have seen this week.

Members know price should move higher leading to a March 15 price cycle peak.  After that point, we’ll refresh our analysis for our members and attempt to provide further guidance. Today/Friday we closed our Short position in UVXY for a quick 50% in 9 days.

In this post, we are going to focus on one of our price modeling systems based on Adaptive Fibonacci Price Modeling and show you why we believe this recent price move will likely stabilize within a range while attempting future moves.  Let’s start with the INDU.

 

WEEKLY DOW JONES CHART

This first chart is the INDU Weekly chart with our Fibonacci Modeling system at work.  We’ve highlighted certain areas with notes to help you understand it in more detail.  This adaptive modeling system tracks price high and low points in various cycle lengths, then attempts to adapt a major and moderate cycle analysis model to key Fibonacci predictive points.  The end result is that we can see where key Fibonacci price trigger levels are and also see what our predictive modeling system is telling us where prices is likely headed.

This weekly, chart shows us that the current support level (originating from near April 2017) is nearly exactly where the current price correction found support.  This level is currently acting as a strong base for current price action and will likely continue to provide very strong support going forward.  You can also see the Bearish Fibonacci Price Level near 25,776 that is acting like Resistance.  Notice that this Bearish Fibonacci Price Level also coincides with the BLUE Fibonacci projected price level.

It is still our opinion that the US major markets will continue moderate price rotation within these levels for the next 5+ days before reaching an intermediate price low cycle near February 21.  After this price low cycle is reached, we believe a new price advance will begin to drive the US majors higher reaching a peak near March 15.

 

 

DAILY DOW JONES CHART

This next INDU Daily chart provides more detail of our projected analysis.  Again, please read the notes we’ve made on this chart to assist you in understanding how we are reading it and interpreting it.  The most recent price peak and trough clearly show the volatility spike that happened last week.  It also shows us that the recent trough in price aligned almost perfectly with a Bullish Fibonacci Price Level from November 2017.  We interpret this as a clear “double bottom” formation at Fibonacci Support.

The purple horizontal line is the Support Level originating from the earlier, Weekly, chart for reference.

This Daily chart shows more detail in terms of the Fibonacci Projected Price Levels and also shows the wide range of price that we are currently experiencing.  Over time, this wide range will likely diminish a bit as the trend continues to consolidate price rotation into more narrow bands, but right now we have a very wide range of price volatility that we have to deal with.  Additionally, the current upward price rotation is above the Bullish Fibonacci Price Level from the recent lows.  This is a clear indication that prices want to continue to push higher till some new price peak is in place.  We expect that will happen fairly soon.

Notice how the Fibonacci Projected Price Levels are quite a way away from the current price levels?  This is because the recent increase in volatility is alerting the price modeling system that we expect larger range price rotation.  As newer and more moderate price rotations form, these levels will begin to consolidate a bit with new price levels.

As of right now, our analysis has really not changed much since last week. We believe the Feb 21 price low will prompt a rally into the March 15 price peak.  At that time, we’ll take a fresh look at these modeling systems to see what they can tell us about the future.

 

DAILY SP500 (SSO ETF) CHART

The last chart I wanted to share with you is the Daily SSO chart.  This chart helps to firm up our analysis of what to expect in the immediate future as well as continues to support our analysis that the US Majors will likely stall near current levels and retrace slightly headed into the Feb 21 price low.  Remember, we don’t believe this Feb 21 price low will be anywhere close to the recent lows.  This move lower will be much more subdued and moderate in size and scope.

With this SSO chart, the Adaptive Fibonacci Price Modeling system is showing a potential “Major Bottom” near the recent lows.  This happens when the system identifies a potentially massive or major price bottom.  Over time, the modeling system will confirm this trigger or replace it with a new trigger when it forms.

We still see the massive price volatility in this chart.  We still see the Fibonacci Price Trigger Levels that tell us we are below the Bearish Price Trigger (near the recent top) and above the Bullish Price Trigger (near the recent bottom), so what should expect price to do?  At this point, the most recent Price Trigger Breach is the Bullish Price Trigger – thus we are expecting prices to continue higher overall.  The new Bearish Fibonacci Price Trigger, below the current prices, is what we would watch for any signs of price weakness.  When that level is breached, then we begin a new potential down leg.

Right now, we will issue this one simple warning – the upside move is likely to be ending soon and preparing for our February 21 price low point.  The fact that prices are showing that they’ve already reached the Fibonacci Projected Price Level is telling us this upside leg may be over for now which is the reason we exited our short UVXY position here for a 50% profit.

 

Next, we expect the US majors to rotate lower for a few days headed into a February 21 price low.  This will be following by an almost immediate and strong upside push to a March 15th price peak.

This means we will be setting up for some great trades over the next few days/weeks.  Imagine being able to know that near February 20~22, we should be able to “pick” the best opportunities for quick trades where the US majors begin a new up leg?  Also, imagine how critical this type of information can be to you going forward?

Our research team at www.TheTechnicalTraders.com has a combined 53 years of trading and analysis experience.  We develop specialized and proprietary price modeling systems, like these, to assist us in being able to provide our members with an “edge” in the markets.  Of course, we are not always 100% accurate with our predictions – no one can be 100% accurate.  We simply do our best to make sure our members get the best we can offer them each and every day.  We want them to understand the opportunities that are playing out and we help them find the best trade triggers for profits each week.

Stay tuned for our next post on Sunday with an instant trade setup,
so be sure to join our free mailing list!

If you find this information valuable and would like to include it in your daily trading activities, visit www.TheTechnicalTraders.com – Wealth Building Newsletter today!

Chris Vermeulen

Our articles, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors to explore the tools and techniques that discretionary and algorithmic traders need to profit in today’s competitive markets. Created with the serious trader and investor in mind – whether beginner or professional – our approach will put you on the path to win. Understanding market structure, trend identification, cycle analysis, volatility, volume, when and when to trade, position management, and how to put it all together so that you have a winning edge.

Become A Winning Technical Trader Today – Join Now

 

53 years experience in researching and trading makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and  3 Hour Trading Video Course are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.

BECOME A TECHNICAL TRADER TODAY – CLICK HERE

Yesterday we shared with you Part I – big picture analysis “math” Behind the recent sell-off. Today, we want to show you the what the math is pointing to in the short term and what to expect next.

For this type of analysis, we are going to use the Adaptive Dynamic Learning (ADL) modeling system that attempts to tear apart price and technical data from within a chart and reconstruct future price data by learning from the past.  In these examples, we will focus on Weekly and Monthly data going forward about 25 periods.  The intent is to clearly illustrate how our earlier analysis (completed near the end of December 2017) is still aligning with our current analysis.  Amazing how these things all plug together like a big puzzle when you think about it.

Remember, in late December 2017, we predicted a massive rally to start 2018 that would peak near the end of January or early February with a downside price rotation before stalling near the February 20.  At that time, we predicted that a new rally would start and would likely peak near or after March 15.

Take a look at this Weekly NQ ADL chart and tell me what you think of our analysis and predictive modeling systems after understanding how accurate this type of work can be.  Yes, nearly two months ago, we predicted this move and our current analysis (as of February 9, 2018) is providing this current prediction.

 

Based on Weekly data

_ The NQ price should stall and rotate about 100~200 pts higher over the next 2~3 weeks

_ Near March 1, the NQ price should begin another rally that will likely peak near March 15 (+400 pts)

_ After that March 15 peak, the price should fall to near 6600 (-400 pts) before finding support and stalling.

_ Moderate upside price activity will likely follow with more narrow price volatility.

 

So, are you starting to get a picture of what to expect in the future?  Of course, any outside news event (war, catastrophe or other global conflict) could dramatically alter the outcome of price action in the future and our system can’t predict for these types of events.  But given historical price action and technical data, this is the most likely outcome (based on 54 unique instances of related data over 10 years of history showing the likelihood of this data being almost 97% accurate).

At this point, we are going to reiterate our earlier call of a very QUICK and TIGHT “Flag” or “Pennant” formation in prices over the next few weeks that will result in support likely being found near $6500~6600 in the NQ before another attempt at higher prices is launched.  Remember, we are predicting a future where a new rally may start near or after February 20 and a peak in prices should be reach near or after March 15.

This image of the Monthly ADL system is showing, very clearly, that prices will likely rotate within the current price range while establishing a technical pattern for further advancement.  We believe our analysis from late December 2017 is still very valid and accurate.  We believe this new FLAG formation is a result of the price correction we expected from our earlier analysis, yet we could not predict the severity of the move at that time.  We did know that NQ prices had already exceeded our predicted boundaries and because of that we felt that prices were going to contract in a moderately aggressive manner – we even warned our members of this potential.

As of right now, we expect the markets to open next week with moderate price volatility in a pattern that will result in a very quick and tight market FLAG formation.  By the time February 20 hits, we believe the US Majors will begin advancing higher towards a March 15th peak.

We’ve included an “Insert Larger Perspective” which is a zoomed in capture of our ADL analysis to help you understand what we are seeing in the markets.

 

Remember, opportunities exist every week for traders and investors to take advantage of market rotation and key market moves.  This is much like our gold miners sell-off prediction report showing the big opportunity using DUST etf.

If you want to learn more of what we offer our members and how we can assist you in staying ahead of the markets visit: www.TheTechnicalTraders.com.  You can also read all of our public research documents on our site as well as talk to a live representative if you like.  We look forward to helping you find success in the future.

Get ready for some price recovery and be prepared for a moderate upside move before March 15.

Between my research team and I, we have 53 years experience in researching and trading makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.

BECOME A TECHNICAL TRADER AND PROFIT TODAY! – CLICK HERE

After surviving one of the biggest market rotations in the last 3+ years, we have been getting quite a bit of request for a detailed analysis of this move and asked what our specialized modeling systems are telling us is likely to happen.  Our research team at Technical Traders Ltd. has put together this short reference of “the math behind the move” that will show you what is happening and the underlying price mechanics that are going to be driving prices in the future.

Now, before we get into the details of the mathematics of this recent rotation, we want to preface the fact that our current analysis indicates that the Tuesday low appears to be the ultimate low at this time and that future price activity will either confirm this or create an alternate price outcome.  As we are going through the mechanics of this move, remember that we predicted a massive price advance for the beginning of 2018 that would result in a “relief pullback” near the end of January before finding new support and launching into an additional advance culminating in a price peak near March 15 (this was the furthest future point that our predictive modeling systems could identify at that time in December 2017).  As of right now, our analysis was DEAD ON.

So, what do our predictive modeling systems tell us now and what should you be doing as investors/traders?  Let’s get into the details – shall we?

This monthly chart of the NQ provides a pretty clear picture of the current Elliot Wave formations and presents a clear understanding that we are currently in a WAVE 5 expansion of a broader WAVE 3 move to the upside.  These WAVE 5’s can be somewhat extensive and are often equal to or greater than the previous WAVE 3 move.  Thus, we have just recently reached the EQUAL price range in the current WAVE 5 compared to the previous WAVE 3.  This means we should be expecting a bit of rotation and consolidation near these levels before price determines if this WAVE 5 move will continue.

Given this mathematical and technical data as well as knowing that this current WAVE 5 could have further upside potential, we need to understand the potential for a deeper downside price retracement and understand the more micro modeling results.

This next Weekly chart is using our Fibonacci/Elliot Wave modeling system that assists us in determining critical price levels and turning points.  As or right now, on the hard right edge of this chart, we are seeing that the current price is warning of a moderately deep retracement that is setting up as long as the price stays below $6720.  Additionally, it is showing very strong support near the $5000~5500 level.  This modeling system tells us that if recent lows are breached, the change that prices would fall to near $5500 is fairly strong.

Again, remember that we are “potentially” nearing the end of WAVE 5.  We don’t have any real confirmation of this move yet, and all we can do is be aware that WAVE 5 if this is the end, will create a short-term corrective wave (Intermediate Wave 4: down) that will end with the creation of a massive broader WAVE 5 higher.  So, at this point, we have a healthy rotation that may turn into a WAVE 5 top.

Now that we’ve completed the MACRO analysis, we have to understand what the MICRO analysis and modeling systems are telling us.  Remember, these two charts are Monthly and Weekly modeling systems that are showing us the very long term price potential (over many weeks, months or years).  For a more immediate analysis of what we should expect over the next few days, we have to use other modeling systems which paint a very clear and exciting picture for us as traders. Tomorrow we will post PART 2 of this report showing you exactly where the markets are headed over the four weeks.

Remember, opportunities exist every week for traders and investors to take advantage of market rotation and key market moves.  Please visit www.TheTechnicalTraders.com to learn more of what we offer our members and how we can assist you in staying ahead of the markets.  You can also read all of our public research documents on our site as well as talk to a live representative if you like.  We look forward to helping you find success in the future.

Get ready for some price recovery and be prepared for a moderate upside move before March 15.

Between my research team and I, we have 53 years experience in researching and trading makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.

Chris Vermeulen
www.TheTechnicalTraders.com

We’ve received many comments and questions from our members over the past few days regarding the recent US market crisis asking what to expect next.  Is this the start of something bigger? Deeper?  What should I do with my open long positions?  What should I do to prepare for anything in the future?  All of these are valid questions.  So, we wanted to help our members and all of our followers by showing what we believe will be the most likely price action going forward a few weeks out.

The recent downside moves in the US majors did freak a lot of people out.  It was something that startled people and pushed a panic button for many.  Certainly, the rotation in the VIX and volatility related ETN’s pushed many people over the edge.  In fact, recent news is that these volatility related ETN’s exasperated the selloff as the VIX shorts were pushed out of positions and into a protectionist mode with the massive spike in volatility.  As the old floor trader saying goes “want to know what causes the markets to crash?  Buyers that turn into sellers to protect from unwanted losses”.

In fact, the fear and selling were so strong it sent the safe havens tumbling lower, which we took advantage of trading the DUST gold miners ETF for a quick 20% profit.

Well, now that this rotation appears to be almost over either this week or early next week, let’s take a look at some of the technical channels and fundamentals that should drive the markets going forward.

First, we have strong economic and fundamental US and global data that is showing increases in the global economy, GDP, output, employment and more.  In reality, the global markets are pushing hard for greater growth.  The one factor that is still concerning for us is the US Fed and Interest Rates as well as regional housing levels.  We have been watching these levels quite closely over the past few months and watching what is happening in major metros across the US and globally.  We are still seeing price appreciation and strong activity in most locations which indicates the top has not formed yet.

Therefore, we believe this February market crisis is, as of right now, a unique instance of a “shakeout” after a lengthy period of very low volatility.  Almost like the market needed to “breathe” and in order to do that, it needed to roll out of a low volatility range.  Now that this is taking place now. We believe the markets are setting up for a very quick FLAG/Pennant formation that will prompt a burst higher towards a March 15th peak.

This chart of the daily SP 500 (SPY) is showing our primary longer-term price cycles.  As you can see, this chart is showing that a bottom in price cycles is happening this week and next and that we would likely see price rotation and moderately higher price activity over the next 3~5+ weeks. We are still expecting weakness that could retest the lower price channels (which you will see in additional charts), but overall we are expected a very quick and tight FLAG/Pennant price formation that will consolidate price before an upside price breakout.

 

This chart of the INDU (Daily) shows our cycle analysis and key cycle points.  Notice the Dual Inflection Point in early February that warned of a potential price reversal/correction.  Also, pay attention to the price channels that are at play in the current uptrend.  These tell us that this recent price rotation was critical for the global markets to “breathe” and rotate in a very healthy way to allow for further growth.  The markets had been in such a tight volatility range for over 11 months and this type of price movement is somewhat unhealthy.  The market operates on the premise that price continually rotated (attempts new highs or new lows) and without that rotation, the market becomes heavily biased to one side or the other.

These cycle points play a role in telling us when to expect potentially critical market turning points and what to expect in terms of intensity of price swings.  This recent downside move was aggressive in nature and we believe this is relative in terms of how narrow the volatility (VIX) had become.  In other words, the markets had been so tight and narrow (biased) that breadth was minimal.  The markets needed this type of rotation to allow for further price moves.

 

This second chart is the SPX (Daily) showing the same cycle points and analysis.  This shows us that the cycles in the SPX are different than those in the INDU, yet the cycle analysis still supports our final outcome that is the markets will form a bottom rotation and advance higher in the immediate future.  Notice the short term (yellow) cycle levels that show prices will be rotating very soon and understand that our predictive modeling systems are telling us that sometime near March 15th will be a market peak.

Putting all of this together, our analysis is that the markets will continue to rotate in a moderately wide range while creating a very quick and tight FLAG/Pennant formation.  Culminating in a price breakout, we believe to the upside, in correlation with the predictive analysis that is telling us of a March 15th price peak.  Therefore, we believe this rotation was a healthy move that allowed the markets to recover a functional price range (creating support and resistance) that could prompt further price advances.

Certainly, there is the risk of further downside price activity.  Certainly, some news item could come out in the future that could drive the markets substantially lower.  We believe the US and Global markets are strong fundamentally and that the new growth in the economic output will continue to try and push equities higher as expectations of increased global economic activity continues.  Immediately, we are targeting the March 15th price peak.  From that point, we will reevaluate our analysis and update our members.

In a video I posted the other day I walk you through gold, stocks, volatility, vix, and bitcoin using my predictive price cycle analysis and technical analysis show your where these asset classes should be headed next.

Also, I had a great conversion with Cory Fleck from the Korelin Economics Report you should hear.

Between my research team and I, we have 53 years experience in researching and trading makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience

Chris Vermeulen

Chris VermeulenCory FleckChris Vermeulen, Founder of The Technical Traders joins me today to focus on the precious metals stocks recent sell-off. Nearing the lower part of the range they have traded in for all of 2017 he sees a potential opportunity in the short term. We also discuss the big picture with interest rates on the rise, stocks rolling over and volatility finally back in the markets.

CLICK DOWNLOAD LINK TO LISTEN: DOWNLOAD SHOW

 

Our articles, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors to explore the tools and techniques that discretionary and algorithmic traders need to profit in today’s competitive markets. Created with the serious trader and investor in mind – whether beginner or professional – our approach will put you on the path to win. Understanding market structure, trend identification, cycle analysis, volatility, volume, when and when to trade, position management, and how to put it all together so that you have a winning edge.

BECOME A PROFITABLE TECHNICAL TRADER TODAY – CLICK HERE

Chris Vermeulen

Our articles, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors to explore the tools and techniques that discretionary and algorithmic traders need to profit in today’s competitive markets. Created with the serious trader and investor in mind – whether beginner or professional – our approach will put you on the path to win. Understanding market structure, trend identification, cycle analysis, volatility, volume, when and when to trade, position management, and how to put it all together so that you have a winning edge.

JOIN US TODAY AND BECOME A WINNING TECHNICAL TRADER – CLICK HERE

Chris Vermeulen
Founder Technical Traders Ltd.