Who Said Traders and Investor are Emotional Right Now?

Nearing the end of 2019, our research team continues to attempt to dissect the market rally in an effort to present credible research and timely insights to skilled technical traders.  We recently authored a research article discussing the potential that the US Stock market is less than 2.5% away from a major resistance level that could prompt a massive market top.  You can read our research related to these Fibonacci Price Amplitude Arcs here.

This recent research leads us to revisit the recent blow-off rotation in recent markets.  The typical market cycle moves from through these cycles Stealth Phase, the Awareness Phase, the Mania Phase and finally to the Blow-Off Phase.  The Stealth Phase is where the smart money pours into the market taking advantage of undervalued assets/equities.  The Awareness phase is where more traditional and retail investors pile into assets that have formed traditional bottom formation and started to rally.  The Mania Phase is when enthusiasm and greed take over and when the market moves higher in a parabolic price mode – ultimately reaching a massive top.  Then, we start the Blow-Off Phase which usually starts with a deep “R” type price rotation – followed by extended selling.

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Source: Dr. Jean-Paul Rodrigue Dept. of Global Studies & Geography Hofstra University

We’ve seen these types of market phases play out over the past 20+ years multiple times.  The DOTCOM market breakdown, the 2009 Credit Market Crisis, and the 2017 BITCOIN breakdown.  One of the clearest examples in history was the 1929 Stock Market Crash.

The effort of our research team is to highlight the recent rally mode in the US stock market after the 2018 US Stock Market rotation (January 2018 and August 2018).  If you pay very close attention to the details of these actual price rotations in the examples below, you’ll notice that every ultimate peak happened after a period of moderately deep price rotation and an extended upside price rally (an exhaustion rally).  In every example, this rotation setup the exhaustion rally which ultimately set up the massive price peak/top.

Source: Dr. Jean-Paul Rodrigue Dept. of Global Studies & Geography Hofstra University
Cole Garner: https://medium.com/hackernoon/marketcycle-4e5407d0c68

We believe the rotation in the US stock market in 2018 exhibited the exact same price setup and the current upside price rally is the exhaustion rally that will ultimately set up a massive price peak/top.  We’ve highlighted our research team’s expectations in the S&P500 chart below.

The fact that this potential price peak aligns with our GREEN Fibonacci price amplitude arc presents another clear example that massive resistance exists near 3200 in the S&P.  The phases of the extended market rally, lasting just over 10 years now, align nearly perfectly with the previous examples of major market tops and a Blow-Off Phase.

Our research team believes the resistance level near 3200 on the S&P will likely result in a downside price rotation setting up an “R” type price move.  Once this completes, a Blow-Off phase could begin rather quickly.  We believe the expansion of the markets has reached a point well past a euphoric phase and the rotation in 2018 setup the perfect exhaustion rally phase.  We believe it is just a matter of time at this point before the Blow-Off phase begins.

We would be surprised if the S&P rallied far beyond the 3200 price level before setting up the “R” price rotation.  We believe the first 3 to 5 months of 2020 will create the “R” price setup before broader market concerns take hold – potentially bursting investor enthusiasm.

All this could be the start of the next real estate crash we explain here.

Don’t miss these next moves in the markets.  Our research goes beyond traditional types of analysis and our research team is dedicated to helping you protect your assets and wealth.

In short, rotations in ETFs, such as this potential move in WOOD, will continue to set up and rotate throughout the 2020 election event and beyond we’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter. Join us with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis. Get a Free 1oz Silver Round or Gold Bar Shipped To You as a Bonus!

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

Chris Vermeulen
Founder of Technical Traders Ltd.
www.TheTechnicalTraders.com

Vermeulen and Swanson Look To New Trading Setups For 2020

This week I talked with Chris Vermeulen who runs the website thetechnicaltraders.com on the current stock market rally, which has some similarities to the way the market acted in 1999 and other years of low volatility moves up.

Chris also gave his updated views on gold, silver, and some other trading setups he sees lining up now for 2020.

Get Chris’ daily video trend analysis, and detailed trade alerts for stocks, indexes, oil, and gold. Visit: https://www.TheTechnicalTraders.com

Current Equities Rally Similarities To 1999

Euphoria is a type of market rally where valuations, real market expectations, and global market concerns are pushed away from view while a trader based rush to rally takes place.  One of the clearest examples is the 1995 to 2000 DOT COM US stock market rally.  As the Internet burst into homes and businesses across the world, the US-led the way with dozens of new Internet-based IPOs touting glorious expectations, potential earnings and more.  Everyone had the idea this new medium would dramatically change the economy for the better and breakthrough traditional economic boundaries.

The rally that took place in 1995 through 2000 was incredible.  The S&P 500 rallied from 463 to 1535 – +235.57%.  What we find interesting is the “price wave formation” that took place within that rally.  There were a number of key price rotations that took place as the market continued to rally, we’ve labeled them A, B, and C.  The first rotation, A, took place in July~Dec 1997.  The second, B, took place from May 1998 to November 1998.  The last, C, took place between January 1999 and November 1999.  Technically, these rotations are significant because they represent “true price exploration” related to price advancement.  The price must always attempt to identify true support/resistance levels while trending.

When we compare the rally from 1995 to 2000 with the current rally in the US stock market, we can see a defined level of euphoric price advance after the 2016 US elections.  We must also pay attention to the previous price advance from the 2009 price lows as the global markets were struggling to recover from the Credit Crisis. Our research team identified the A, B, C rotations in the current price and associated them to the similar rotations in the 1995-2000 price rally as “key components of the current rally and a potential warning sign of a pending top formation”.

Our researchers believe the QE processes of the global central banks have set up a similar type of euphoric price rally in the current global markets even though current economic metrics are warning of weakening economic activity and weakening global market output.  The US Fed and global central banks seem to want to keep pumping money/credit into the global markets to keep the rally going – most likely because they are fearful of what a crash/correction may do to the future growth opportunities around the planet.

Yet, our research team focused on the C rotation in 1999 and 2019 – a full 20 years apart.  What interested our research team the most was the fact that the rotation in 1999 set up a full 21 months before the November 2000 US Presidential election.  The current C rotation initiated in January 2018 – a full 34 months before the November 2020 US Presidential Elections.  Anyone paying any attention will recognize the 21 and 34 are both Fibonacci Numbers – relating a 1.619 ratio advancement.

Are we setting up a massive top in the US stock market based on a Fibonacci price range expansion related to the patterns we have identified in this SP500 chart?  Have we advanced from the 2000 peak and 2009 bottom in some form of Fibonacci Ratio expansion that aligns with the C rotation pattern we have identified?

The rally from Bill Clinton’s second term start date to the peak in 2000 totaled 932.9 pts – +153.61%.  the rally from Donald Trump’s first term start date to our projected peak level totals 997.5 pts – +44.38%.  The rally in 2000 peaked at a range that is 200% larger than the ration between the two separate percentage point ranges.  Is this significant to traders?  Does it help to align our peak with the 1.619 Fibonacci ratio?

153.61 / 44.38 = 3.4612

3.4612 / 2 = 1.7306

Given the alignment of these values with a potential 200% range expansion theory, we need to start to look at TIME/PRICE ratios to determine if these rallies are aligned efficiently.

The rally from 1995 to the peak in 2000 consisted of 63 Months.  The rally from 2009 to our projected peak consists of 131 bars.  This represents a price TIME expansion of 207.9%

The rally from 1995 to the peak in 2000 consisted of a price move of +1081.2 pts (+235.57%).  The rally from 2009 to our projected peak consists of a price move of 2585.6 pts (390.49%).  The ratio between these two price expansions is 1.657.

The correction from the peak in 2000 to the low in 2009 consisted of 109 months.  The ratio between the 63 months (1995~2000 peak) to this correction time is 1.73.  The ration of the 2009~2019 rally time span is 1.20.  Thus, the correction between the peak in 2000 to the bottom in 2009 expanded at a rate of 1.73x the time it took to complete the DOT COM rally from 1995 to 2000.  The recovery that has taken place from the 2009 bottom to our projected top in 2019 would expand at a rate of 1.20x the correction time rate.  All of these levels align with common Fibonacci numbers and ratios.

In other words, we believe the current expansion in price is nearing a completed Elliot Wave/Fibonacci ratio peak (likely wave C) that maintains proper aspect ratios related to previous major price rotations.

Other major sectors and asset classes also look to be showing similar topping patterns like the real estate values and charts here.

CUSTOM VOLATILITY INDEX MONTHLY CHART

Our Custom Volatility Index shows extended volatility is increasing with price nearing the upper range for December 2019.  Notice the increase in the range of these bars since the just before the peak in January 2018.  This increased range suggests extreme price volatility has been pushing the markets for the past 24+ months.  If this volatility continues into early 2020 as our projected peak sets up, we may see some very big rotation in 2020.

2000 AND 2019 PRICE SIMILARITIES IN S&P 500

This 2000 peak to 2019 peak comparison chart highlights the similarities in the C price pattern that has setup.  In 1999, the C pattern set up with an initial peak, followed by minor downside rotation – just like in January 2018. The second peak was higher, followed by a much deeper downside price rotation – just like in Nov/Dec 2018.  And the final rally broke upward after a Pennant/Flag formation pushing higher by +25% in 2000.  The current upside breakout from the December 2018 lows suggests a 39.5% price peak – just above our predicted 32% scaled Fibonacci rally expectation.

FIBONACCI PRICE AMPLITUDE TOP LEVEL IS NOT MUCH HIGHER

The total scope of this price move over the past 40+ years is impressive.  These longer-term patterns still drive the markets to establish major peaks and valleys.  Take a look at this chart and try to understand the ratios that are being presented here.  21%, 34%, 50%, 62%, 100% and any combination of these levels using 2x, 3x or any multiplier constitute a Fibonacci structure.  One of the most important facets of attempting to understand the Fibonacci price theory is that the ratios must be somewhat aligned.

Pay attention to the Fibonacci Price Amplitude arcs (the circles) drawn on this chart.  They represent the price range from the peak in 2000 to the low in 2009.  The reason this range is important to our researchers is that it will properly measure the previous upward price rally and the current price rally in terms of price amplitude.  Pay attention to how the current price rally stalled and rotated near these arcs.  We believe the upper GREEN arc level will operate as major resistance for the markets – possibly setting up another “rollover” type of top similar to the one in 1999~2000.

Skilled technical traders still need to be cautious headed into 2020.  The current rally, and most of 2018 and 2019, have been setting up a very serious type of pre-top setup.  Any downside rotation in early 2020 may attempt to move lower in multiple waves – possibly spanning multiple years.

Currently, our research suggests a limited 2.5% upside price range before the SP500 will reach the GREEN resistance arc.  The US markets may reach this level before the end of 2019 and may begin a topping pattern before you finish reading this article.  Please stay informed and understand the structures, trends, and dynamics that are at play in these markets to attempt to reduce your risk.  Now is the time to trim your equity/stock positions and prepare for a much bigger swing in price/volatility.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

We’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Round or Gold Bar Shipped To You!

Chris Vermeulen
Founder of Technical Traders Ltd.
www.TheTechnicalTraders.com

Gapping Rotation in SPY and News Based Rallies Are A Warning

As holiday trading sets up in the global markets, the SPY is starting to show signs of volatility and warning of a potential top by gapping as price attempts to trade sideways.  This type of top formation, along with the fact that the overnight REPO facility continues to roil the markets, continues to draw our researchers to the conclusion that some type of debt or liquidity issue is just below the surface of the global markets.

We believe the topping formation in the SPY may be a sign that the holiday trading, normally spanning from just before Thanksgiving to sometime after January 10th or 15th, may prompt a very volatile price rotation in the global markets.  The lack of liquidity in the market at this time often leads to fairly narrow ranges in price.  Yet we are seeing volatility continue to stay somewhat high at this time and the REPO issue hangs over the heads of nearly every investor at this time.

One of our friends, an ex-Chicago floor trader, wrote to us just a few days ago suggesting he was receiving phone calls from many friends and associates in the US and overseas about the REPO issue.  We believe this issue is now taking root as a concern for global investors and could become a major issue for the markets going forward into 2020.  Our friend’s suggestion was to “buy gold and to pair back equity positions”.

This SPY Daily chart highlights the GAPS in price that has our research team concerned. A breakdown below $308 would qualify as a new Bearish Price Trend.  If the most recent gap is filled to the downside, the price may begin to accelerate lower, confirming our analysis.

On the flip side of that scenario, is a breakout above $315 that can hold for a couple of days or into the end of the week. That would trigger a new uptrend and possibly a Santa Rally.

This Weekly YM chart highlights the Hangman pattern set up last week with a very long lower wick.  This pattern set up at the price high is very indicative of a topping formation.  The fact that it set up just below the GREEN Bullish Price Trigger level near $28,175 suggests this level is acting as resistance.  A breakdown in price near this level could prompt a move to levels below 26,000.

Traders need to stay cautious over the next 5+ weeks as the lack of volatility in the market may prompt some very big price moves.  We believe the REPO issue may have some legs in the future and we believe a rotation may begin before Christmas 2019.

If liquidity continues to diminish, a flash crash type of event would not be uncommon.  We believe there are serious risks of a downward price rotation in the works and urge our followers and members to prepare for unknown risks over the next 5+ weeks.

Normal trading volume will not likely start to pick back up till after January 15th.  We have at least 4+ weeks of unknowns to contend with in a very illiquid market. We are going to trade with the short term market trends and be agile going into the new year.

S&P 500 & BOND TREND – DECEMBER 13

The stock market was setting up a topping pattern the past couple weeks but that has now been negated. The charts/technicals are bullish and so are we it’s that simple really.

Yesterday more chatter of tariffs and other news sparked a strong equities rally at the open bell which sent stocks sharply higher while bonds corrected. With yesterday’s S&P 500 hitting new highs after a fear-based correction two weeks ago the market is now back in rally mode and should have enough energy to sustain a rally into the year-end.

While we trade based on technical analysis, there will be days when news hitting the market and causes some large moves on the same day we have technical buy or sell signals. Like yesterday, for example, The past couple of trading sessions we have been talking about how the S&P 500 has to hie new highs to kick things back into a new uptrend after the previous week’s price correction. Yesterday, the SP500 broke to new highs, while bonds broke down triggering a new breakout rally in stocks. Sure there was news to help push price higher but none the less all our analysis has confirmed for the buy trigger.

We touch on other markets or news from time to time but we do not take any of the news into consideration for our trades. While there are many warning signs out there pointing to dark times ahead for the financial markets like the Repo market and many others, the reality is we follow the price, not the news. The market is climbing a wall of worry among educated traders and investors, and that’s what the market does best and we can’t fight it. Eventually, the price will turn down for a mega bear market and we will be there to profit from it, until then we ride the fearful rally higher.

Chris Vermeulen
www.TheTechnicalTraders.com

Lumber is about to rally and how to play it with this ETF

WOOD, one of the Ishares ETF symbols related to the Real Estate and Construction sectors may become the next hottest instrument for skilled technical traders.  Over the past three years, Wood has rallied over 110% between a $40 to $84 range and the trading volume of WOOD has been relatively consistent near an average of about 140k shares per week.  Let’s dig into the opportunities that may present themselves over the next 6 to 12+ months in WOOD.

First, you can get more information about this iShares ETF here.

Second, the WOOD ETF is relatively closely correlated to the US Real Estate and Construction sectors. Thus, when economic data is announced that supports growing Real Estate and Construction activity, traders can easily translate that into forward expectations in price in the WOOD ETF.  For the purposed of this article, we’ll stick with a simple example of New Private Housing Unit Building Permits data from the St. Louis Federal Reserve.

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NEW HOUSING BUILDING PERMITS

As you can see from the chart below, since the bottom of the housing market crisis in 2009, an extended bottom to place between 2009 and 2011.  Early in 2012, the housing market began to uptick with an increase in housing permits.

This increase continued until a peak in 2015 rattled the markets (right before the 2016 Elections).  The post-2016 recovery and rotation in housing permits are very clear to see through the end of 2018 and we can see an uptick in new building permits in 2019 as the US Federal Reserve change focus fairly early in 2019 to reduce the Fed Funds Rate and ease economic concerns globally.

This uptick in the housing permit data presents a fairly clear picture that builders are expecting a moderate increase in activity over the next 12+ months related to new home sales, inventory, and activity.  How can you learn to profit from these trends?

WOOD WEEKLY PRICE CHART

This Weekly WOOD chart highlights the trends that correlate to the housing permit chart above.  Notice how the growth from 2013 to 2015 was more moderate compared to the growth between 2017 and 2018?  This reflects the investor sentiment related to real economic activity and expectations.

In the 2014/2015 period, housing prices were still recovering well, yet the US Fed was also starting to raise interest rates from extreme lows and the US was headed into a very contentious election cycle.

You can see how WOOD contracted in 2016 as rates crept higher and the US election took hold of the markets – causing uncertainty and fear in the consumer market.  This fear translated to a slowdown of activity and expectations in the housing market that reflected a price decline in WOOD in 2016.

The rally, after the November 2016 US presidential elections, clearly illustrates that investors and consumers believed the new US President would usher in an economic boom cycle – no matter what the US Fed did (for the most part).

Currently, WOOD has retraced from $84 to levels near $54.  The current uptick in housing permits suggests builders and construction are ramping up expecting a bump in housing activity over the next 12+ months.  It could be that builders are expecting the US Fed to continue easing or a more positive business/political climate for consumers and wages.  Either way, the uptick in building permits suggests forward expectations are positive at this time.  If WOOD breaks above the $67/68 level, a new price rally may continue towards the $76 level.

DAILY WOOD PRICE TARGET CHART

One of our favorite measures of price activity is the “100% Fibonacci Measured Move”.  This Fibonacci price theory suggests that price typically legs higher or lower in 100% (or near 100%) legs/moves.  By taking a look at a previous price advance/leg, we measure that move and apply that range to a recent pullback to determine where the next 100% Measured Move may target.

In this case, the $76.40 level becomes the new 100% Fibonacci Measure Move target if the upside breakout happens as we expect.  This represents a 15%+ upside price move potential for skilled technical traders.

If wood starts to collapse in price, it could be the start of the next real estate crash we explain here.

We’ve been warning our followers and members that 2019 and 2020 are going to be excellent environments for technical traders.  Price rotation, trends and volatility should continue throughout the next 12+ months and well past the 2020 US elections.

Following wood/lumber may be new to you and that’s great because its another angle to profit from an asset class, not many traders talk about. We will also go into more detail in a future article on how we use the wood to gold ratio to help predict stock market direction. This may sound strange but, but this ratio plays a powerful roll in knowing when the big and smart money is rotating into the risk on/off asset classes.

In fact, both WOOD and Gold have bullish price patterns and one of them will fail, the question is which one? A couple of days ago we posted our analysis about what is happening in gold right now.

In short, rotations in ETFs, such as this potential move in WOOD, will continue to set up and rotate throughout the 2020 election event and beyond we’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter. Join us with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis. Get a Free 1oz Silver Round or Gold Bar Shipped To You as a Bonus!

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

Chris Vermeulen
Founder of Technical Traders Ltd.

Trader Predicts Assets Direction With This Forward-Looking Indicator

Great traders are often the result of dedication to principle, theory, price study, and a solid understanding of Intermarket market dynamics.  The one thing that can’t be taught, though, is experience behind the screens and with the markets.

The longer a trader spends working with the charts, trading the markets and studying the trends/indicators, the more knowledge, experience, and capability that trader has in being able to see and predict future price moves.

We believe it is the same way with other professions in life – a professional race car driver, a professional pilot or ship captain.  Any profession where an individual is “at the helm” of some vehicle, instrument or live-action event, that individual will, over time, hone his/her skills to be able to foresee and manage certain aspects of the live operation better than someone without the experience.

One might want to call this a “sixth-sense”, but we believe it is simply applied knowledge and experience.  These individuals see and feel things that others simply miss or brush off as unimportant.

Trading is the same way and traders will become better and more skilled by following the charts very closely and watching how price reacts to geopolitical and regional economic events.

One of our primary price modeling tools is what we call the V10.  It has gone through a number of revisions over the years and is capable of running on almost any chart, in any time-frame.

What we learn from using this tool is when and how price rotates, confirms trend changes, sets up new triggers and more.  It also helps us to identify price cycles, when we should add-to positions, trim profits or expect a new market rally or correction.

Before you continue, take a second and join my free trend trade signals email list.

V10 TREND TRADING STRATEGY – AVERAGE TRADE 45 DAYS

As we expand the use of the V10 price modeling system into other markets, you’ll see how changes in price trends can assist us in seeing into the future and preparing for price rotation that others may miss completely.

NATURAL GAS V10 CHART ANALYSIS

This NG chart highlights a number of price trend rotations (from RED to ORANGE to GREEN, or from GREEN to ORANGE to RED).  Each time the color leaves a primary trend color (GREEN OR RED) we have an early warning signal that price rotation is setting up.

You can see the initial uptrend in late August we set up by a RED to ORANGE trend change.  The same thing happened in late October.  Now, a GREEN to ORANGE trend change setup near mid-November warning us that NG was going to move lower in the future.

These types of setups appear in all types of charts, asset classes, and time-frames and soon we will make different versions available so we have long term investing, trend trading, swing trading, and momentum trader signals.

THE POWER OF CYCLES WITHIN PRICE ACTION

When attempting to interpret price modeling systems or indicators with cycle analysis utilities, it is important to understand that cycles don’t drive price moves.  Price moves drive cycle rotations.  Knowing when price cycles are topping or bottoming can assist traders in understanding where and when new trade setups are viable and when to trim profits off existing trades.

If we know when the most active and relevant cycle is trending, topping or bottoming and the expected cycle length for a potential price trend, then we can make a more informed determination about the viability of the trade setup and risk factors.

We are also able to use the price modeling systems and cycle modeling systems to better understand how far price may move, when we may begin to see price weakness in the trend and other important factors to help us manage our trade properly and reduce risks.  This is where things get really interesting and exciting.

EXAMPLE SP500 PREDICTED PRICE MOVE

HOW I PREDICT FUTURE PRICE MOVEMENT

This last chart shows you the price of Natural Gas futures.  We have overlaid our proprietary Cycle Modeling tool onto it so you can clearly see how the price has moved in alignment with the cycles.  Follow the LIGHT BLUE cycle line on the chart and try to understand that the range/height of the cycle lines does not correlate to price levels.  They represent the “intensity” of the cycle peak or trough.

A higher peak on the cycle line suggests this upside cycle peak has a higher intensity/probability than a lower cycle peak.  We gauge these rotations as a measure of intensity or amplitude.  Lower cycle troughs suggest a price bottom may have more intensity/amplitude in price than a moderately higher cycle trough.

Follow the three-cycle lows starting near early October on this chart.  Each of them resulted in deeper Cycle troughs on our Cycle modeling tool.  Yet, the real price reaction was to set up a small inverted Head-n-Shoulders bottom pattern.  The last cycle trough low didn’t result in a deeper price level, but it did result in the completion of the bottom pattern that prompted an immediate upside price rally – more intensity.

We’ve also highlighted some of our most recent trades related to our analysis using the V10 and our Cycle modeling tool.  +35% over the past 4 months on three successful trades – we’re pretty happy about that.

Also, keep in mind that we are not showing you what the cycle modeling tool or the V10 is predicting for the future.  We reserve that for our valued subscribers/members.  We know where the cycle and other predictive modeling systems are telling us the price will go, but we can’t share it with you (yet).

CONCLUDING THOUGHTS:

Since 2001, our focus has been on learning and mastering the tools we have developed and use as well as the Cycle Modeling tools so that we can follow the markets more closely, learn to provide better opportunities and attempt to identify the highest probability trades for our members.

What we never expected was that our efforts to study, learn and apply these tools would provide us with that “sixth-sense” ability to attempt to see into the future and to attempt to predict 10 to 20+ days into the future.

Our modeling tools share opportunities with us all over the markets and across multiple instruments and time-frames.  We recently posted our gold and gold miners price/cycle forecast here. We focus on Daily and 30-minute intervals for our members, but we see these opportunities across all levels intervals – from 1 minute all the way to monthly/quarterly.

The one thing we are certain of is that our members continually write to us about how important it is to them to have us explain the setups, trends, cycles and future market implications to them in our daily market videos.  They don’t have to try to learn to do this type of cycle research on their own, we give them the details every morning before the markets open and any trade signal we have for SP500, gold, oil, nat gas, bonds, and more.

Visit my website at http://www.TheTechnicalTraders.com

Chris Vermeulen
Found of Technical Traders Ltd.

When Does the Stock Market Have a Holiday?

Money never sleeps, but stock market operators do. Some very active stockbrokers as well as investors are known to get by with just a few hours of sleep, and there are a few financial exchanges that operate around the clock, but Wall Street has an operating schedule that reflect some realities of the market. Whereas the foreign exchange (forex) market operates on a 24-hour basis with a break from Friday afternoon to Sunday evening, the cryptocurrency markets never close because blockchain networks never stop running.

The most prominent stock exchanges in the world, the New York Stock Exchange and the Nasdaq, stick to a schedule that as of 2019 features 252 trading days over 12 months. Interest rate instruments such as Treasury bills get five more trading days in a year, but stocks, commodities, and derivatives can be actively traded for a little less than 70% of the year.

Wall Street starts trading at 9:30 in the morning from Monday through Friday, and the closing bell rings at 4:00 pm Eastern Standard Time. Quite a few traders around the world keep the same hours as Wall Street; in Australia, a country that is 17 hours ahead of the New York time zone, traders and investors who have positions the market are active while their families are sleeping. As for holidays when the NYSE and Nasdaq do not operate or else modify their trading sessions, this is how the situation will play out in the year 2020:

New Year’s Day

Wall Street will not open during the first day of the new decade.

Martin Luther King, Jr. Day

On January 20, traders will observe the MLK holiday.

President’s Day

The birthday of George Washington, first President of United States, is celebrated on February 17, a day when the NYSE and the Nasdaq do not operate.

Good Friday

This religious holiday will fall on April 10 in 2020, and the markets will take a break.

Memorial Day

This is the day when Americans remember their war dead, and it will fall on Monday, May 25 in 2020.

Independence Day

The patriotic Fourth of July holiday will fall on Saturday in 2020, which means that Wall Street will close on Friday 3.

Labor Day

Whereas most of the world celebrates Labor Day on the first day of May, the United States and Canada do so on the first Monday of September, which also represents the end of summer and the first day of fall. In 2020, Wall Street will close on September 7 to observe Labor Day.

Thanksgiving Day

Wall Street will operate until 1:00 pm EST on Thursday, November 26, 2020. For Black Friday, a similar short trading session will be followed.

Christmas

Wall Street will operate until 1:00 pm EST on Thursday, December 24, 2020, and will be closed on December 25.

Although the days listed above are known as “bank holidays,” it should be noted that Wall Street operates as usual during Columbus Day. The same goes for Veterans Day, but some investors, brokers, and traders who served in the U.S. Armed Forces are known to get together on that day to sneak a beer during the trading session.

Many investors take advantage of Wall Street holidays to get some of their affairs in order. If they need to send funds to partners overseas, for example, they may find themselves filling out a money order or setting up a wire transfer; the advantage in this regard is that money transmitters do not necessarily stop operating when Wall Street does. Even though money orders are not as widely used as they used to be years ago, some banks in the Caribbean still work with these funding instruments; plus, they are a good way to make cash portable up to $1,000.

In the past, Wall Street used to observe more holidays. These days, investors also have the option of getting into after-hours trading, thereby extending their trading sessions after the bell rings in the afternoon. For the most part, Wall Street exchange operators and major brokerage houses welcome the holidays; even if they have to engage in money management and administrative work during these days off, it is nice to take a break from CNBC and the stock ticker.

High Yield Bond and Transports Signal Gold By Signal

Technical Analysis is the theory that price relates all news, fundamental and correlative future expectations into current and recent price activity.  It is the theory that price is the ultimate indicator and that charts paint a very clear picture for those individuals that are capable of understanding the message that is being presented.

In this research article, we are going to highlight the technical analysis components that we believe are painting a very clear picture that an “early warning” signal is flashing very brightly in the US and Global markets right now.

Cross market analysis and methods of rationalizing true price rotation, valuation and trend become the foundation of most technical analysis.  Studies, technical indicators, advanced price theory and all the rest of the tools we use are ways for us to better understand what price is actually showing us.  Today, we are going to focus on Gold, High Yield Corporate Bonds, and the Transportation Index because combined they are telling us something big is close to happening.

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Gold is a safe-haven instrument that measures uncertainty, fear, greed and the future expectations related to a secure global market economy.  When a crisis, economic or other uncertainty fears are minimized, Gold tends to move lower or consolidate into a lower price range.  When fears, economic uncertainty or any type of crisis event is causing concerns for global investors, Gold then begins to move higher as a measure of protection from risk and fear of any type of crisis event.

PRICE OF GOLD – BULL FLAG WITHIN A BULL MARKET

Gold has recently rallied well above the $1400 level and formed a large Bullish Flag pattern.  The recent rally above $1400 confirmed the new Bullish Price Trend for Gold which indicates global investors are becoming more fearful of a crisis event or some other type of economic uncertainty.

We believe the next move high in Gold will push prices above the $1625 level, then above the $1745 level.  If that happens, we’ll know the fear of some type of crisis event is very real and that the Bullish major trend in Gold may continue for many years to come.

We just posted a much more detailed report on the new 7-year bull market starting for gold and mining stocks, which if you have not yet seen take a look at the charts.

As much as we like to think that Gold leads the market in terms of measuring fear and uncertainty, Corporate Bonds also share a role in the understanding and future expectations related to economic capacity.

If Corporate Bonds begin to sell-off before a major downside market trend begins, it represents a fear that future earnings and the ability to support/service corporate debt levels may be at risk.  The way I explain this to people is that it is like a ship “battening down the hatches” and securing the cargo before entering a major storm.

A Corporate Bond sell-off indicates that global investors believe the economy is grinding to a halt and that earnings going to decline – thus putting debt at risk of failure in the future and this is why investors sell their bonds, and they they typically move before the stock indexes do. Think of high yield bonds as a leading indicator by a few days.

HIGH YIELD CORPORATE BONDS – POTENTIAL MAJOR BREAKDOWN

This HYG chart highlights the support channel in Corporate Bonds that appears to be at risk of being broken.  If a breakdown in price happens, this downside rotation in HYG would be a very clear warning that the US and global stock markets may be entering a serious price correction period.

If Bonds were to move dramatically lower while Gold rallied, we can only interpret this as fear has really begun to hit the markets and traders are panicking.

TRANSPORTATION INDEX – ECONOMIC LEADING INDICATOR

Lastly, take a look at this Transportation Index chart and pay very close attention to the Head-n-Shoulders pattern setup on the right side of the chart.  You’ll see a similar Head-n-Shoulders pattern in May 2019 – just before a moderate downside price rotation.

As we move into the end of this year with liquidity diminishing and volatility starting to increase, the potential for a dramatic price sell-off becomes even greater.  The lack of real market depth and liquidity, as well as this “early warning” set up in the charts, suggests a market breakdown event may be happening right before our eyes. It also may not happen, which is fine also.

As technical traders we do not require price to move in any one direction, we simply follow price and bet on the direction it’s moving. But if we do get a breakdown here it could be really exciting especially if you have a trade or two on the right side of the market.

The cross-market Technical Analysis and the chart patterns are suggesting that a peak has set up and that future expectations are much weaker than they were 14 to 18+ months ago.

We recently published this article highlighting some of our proprietary Indicators and Indexes suggesting this recent rally in the US stock market may have been a “euphoric zombie-land rally” with no real support behind it.

Dec 2, 2019: IS THE CURRENT RALLY A TRUE VALUATION RALLY OR EUPHORIA?

If our analysis is correct, and we get the drop in stocks, it could be a very big downside move.

We believe these charts confirm that price and Technical Analysis are screaming an “Early Warning” signal that price weakness is setting up in the US and global markets.  We believe the continued lack of liquidity throughout the Christmas holiday season may prompt a very big breakdown price move at any time in the near future.  When any one of these charts begins a price move to confirm these predicted setups, it won’t take long for the bigger major trends to follow-through.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly. This week we entered two new trades and it’s not too late to get into them before they run higher!

We’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Round or Gold Bar Shipped To You!

Chris Vermeulen
Founder of Technical Traders Ltd.
www.TheTechnicalTraders.com

7 Year Cycles Can Be Powerful And Gold Just Started One

Our research and predictive modelling systems have nailed Gold over the past 15+ months.  We expected Gold to rally above $1750 before the end of this year, but the global trade wars and news cycles stalled the rally in Gold over the past 2 months.  Now, it appears Gold is poised for another rally pushing much higher.

But wait, if you’re thinking I’m just another one of those traders who is always bullish on gold, just know I have been telling the truth about where gold was headed (lower) for years, but finally, the tide has changed!

Gold broke down from a bull market in 2012/2013 – nearly 7 years ago.  Now, Gold has broken resistance near $1375 and is technically in a full-fledged Bull Market.  The importance of this is the 7-year cycle and how the rotation in Gold, between the high near $1923 and the low near $1045 represent an $878 price range.  The upside (expansion) rally in Gold may very well move in expanding Fibonacci price structures – just like it did in 2005 through 2012.  If this is the case, then we may expect to see an ultimate peak price in Gold well above $3500.

The rally that started in the last 2015 and ended in July 2016 totalled +$331.1 (+31.67%).  The next price rally that started in August 2018 and ended in September 2019 totalled +$399.4 (+34.22%).  If we take the current rally range (399.4) and divide it by the previous rally range (331.1), we end up with an expansion range of 121%.  The two unique rallies that happened just before the 2009 parabolic rally in Gold represented (+315.8: 2006) and (394.8: 2008).  The ratio of these two rallies is 125%.  Could Gold have already set up for another parabolic rally well beyond the $1923 target level?

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MONTHLY PRICE OF GOLD CHART – BULL AND BEAR MARKET TRENDS

Our research team believes Gold has already entered a technically valid Bullish Market trend.  We believe Gold miners will follow higher as Gold begins this next move higher.  The reason we have not engaged in Miners, yet, is because we have not received any technically valid signals related to the Gold miners indicating they have also entered a new Bullish Market trend.

Gold is the safe-haven for the global market.  It is a store of value and offers price appreciation when the global market risks are excessive.  Because of this, the sentiment across the global markets appears to be weakening in regards to forward expectations and valuation appreciation within the investment/asset classes.  If Gold continues to rally higher, consider it a strong indicator that the foundation of the global market valuation levels is weakening considerably.

US DOLLAR WILL START TO SUPPORT HIGHER GOLD PRICES

Should the US Dollar retrace lower, Gold will see a price increase based on the renewed weakness of the US Dollar.  This would also assist in re-balancing global trade and economic issues with the US Dollar moving moderately lower as weakening global markets contract.

GOLD MINING STOCKS – MONTHLY CHART

Miners are set up much like Gold was in early 2018.  Resistance has been set up with multiple price tops and any momentum rally above this level would technically qualify as a new Bullish Market trend for miners.

At this point, we believe the bottom in miners has already formed and we are simply waiting for the qualifying technical confirmation of the bullish trend to begin.  Jumping into this trade too early could result in unwanted risks as the price could still waffle around within the Stage 1 Base range.

If you want to learn more about market stage analysis I will be covering it a new article shortly. Once you grasp the basic concept you will see these stages on every chart no matter the time frame and know when to focus on trading and when to ignore the charts.

If you like new fresh big trend trades then check out this real estate article I just posted and how the real estate ETF could allow your to profit from home prices but you don’t even need to own or buy a home!

CONCLUDING THOUGHTS:

The recent weakness in the US and global markets has prompted a moderately solid upside move in Gold and Silver over the past few days.  We still need to see a Gold move above recent resistance to qualify as a new upside rally though.  Miners are set up for a breakout technical move which we must also wait for.  We believe these two may move somewhat in unison if the global markets continue to contract throughout the end of 2019 and into 2020.

Stay tuned for more updates and alerts when all these key sectors and asset classes start new trends because that is when you want to get involved for immediate oversized gains. See my stock, index, and commodity trade alerts here.

Chris Vermeulen
Found of Technical Traders Ltd.
www.TheTechnicalTraders.com

About To Relive The 2007 Real Estate Crash Again?

Does history repeat itself?  Are price patterns and chart patterns reliable enough to suggest that a global Real Estate market collapse may be set up?  What would it take for another Real Estate collapse to take place in today’s global market?

First, let’s start with this simple chart highlighting the “Bear Flag” setup from 2007 and the current 2019 Bear Flag setup.  This price pattern was enough of an early warning sign for our research team to run into our offices and tell us of the exciting pattern they just identified regarding Real Estate and what they thought could happen.  We listened to them share their ideas and concepts of how we have 11 months to go before the 2020 US Presidential election takes place and how higher risk delinquencies and foreclosures are starting to spike.  They suggested the political theater of the global markets and US election cycle will likely distract from the weakening economic cycle which could present enough “smoke and mirrors” to keep investors’ attention away from this potential collapse in the housing market.

Much like a magician attempts to distract you just long enough to pull of their new trick, could the political theater, global economic news cycles and the never-ending battle in Washington DC be just enough of a distraction that skilled traders miss this critical setup?  We hope not.

The peak that occurred in 2007 setup about 19 months before the 2008 Presidential election took place.  The 2019 peak occurs about 13 months before the 2020 Presidential election.  In both instances, a highly contentious political battle is taking place which may distract traders and investors from really paying attention to the underlying factors of the global markets.

A real estate crash is no something to dismiss. For most of the people, their home is the nest egg, or their largest investment and watching this asset tumble in value 10, 20, 30% or more is serious. Before you continue, take a couple of seconds and join our free trend signals email list.

2007 VS 2019 REAL ESTATE MARKET TOPPING FORMATIONS

Recent economic data suggests that builders and permits experienced an increase over the past 60 days – which is vastly different than what happened in 2006-2007.  By the time the Bear Flag had setup in IYR in 2007, new building permits had already started to fall dramatically – for at least 12+ months prior to March 2007.  Currently, the number of building permits on record is sitting near 50% of the range established between 2000 and 2009.

We authored a number of research articles this year that more clearly highlight our expectations:
– PART II – Is The Fed Too Late To Prevent A Housing Market Crash?
– Are Real Estate ETFs the Next Big Trade?

The recent increase in building permits could indicate a euphoric level of buying/flipping by builders and speculators thinking “its easy to make profits flipping these homes in this market”.  Much like the euphoric activity before the 2007 crash.

The collapse that happened after the Bear Flag setup in IYR in 2007 resulted in a dramatic -73% decline in value over a very short 24 month period.  Could something like this happen again in today’s market?

Our research team raised a couple of interesting points relating to the potential for a “rollover” type of event taking place over the next 12+ months.

First, the US Presidential election cycle could setup a very real fear that a new president could attempt to derail/damage the marketplace with new policies, taxes and other unknowns.

Second, the current Real Estate market has experienced real price growth for almost 10+ years since the 2009-2010 bottom and wage earners may already be priced out of certain markets – reducing overall demand at current price levels.

Third, a lot of recent news has been published showing massive amounts of people moving away from larger cities/states like New York, California, New Jersey, Chicago, and other locations.  These people are moving away from higher taxes and housing costs and trying to move to areas that are cheaper and quieter.

Forth, there are an estimated 40+ million “baby boomer” homes that must be liquidated over the next 10+ years as these people/families transition into elderly status.

The reality is that unless price levels revert to levels that make housing more affordable or earnings levels dramatically increase over the next 3+ years, the price level for homes in the US and Canada is already historically high.

2007 REAL ESTATE HOUSING SELLOFF

REAL ESTATE PRICES/VALUATION TESTING 2007 EXTREME HIGHS

How high?  Take a look at this last chart of IYR and pay attention to the fact that current price levels are already at the historic high price levels from 2007.  This should tell you almost all you need to know.

Unless earning levels somehow rise dramatically over the next 24 to 36+ months, housing prices are already at or near peak levels for most consumers – even if the US Fed decreases interest rates another 25 to 50 bp.

The other thing to consider is what type of new policies, taxes, costs would a new US president do to the housing market and global stock market?  What would happen in Bernie Sanders or Elizabeth Warren were to suddenly take the lead in the polls wanting to raise taxes on everyone and install new trillion-dollar policies while attacking America’s millionaires and billionaires?  Think that may have some pull on the markets?

Our researchers believe we should cautiously watch IYR for further signs of weakness over the next few weeks and months.  Yes, there is a very real potential that the US and global housing markets could collapse over the next few years – but right now we are looking at a Bear Flag pattern that may be an early warning sign of a potential price selloff.  Nothing is confirmed yet but any week now could spark the start of something ugly for home prices.

Yes, housing market economic data show some weakening while building permits and construction ramped up last month.  Housing has certainly reached a mature economic state and we believe any collapse in the global stock market could send a wave of fear throughout the housing market as people attempt to get out before prices start to collapse. We’ll keep you updated as we continue to watch the Real Estate market and our researchers pour over the data.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

We’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Round or Gold Bar Shipped To You!

Chris Vermeulen
Founder of Technical Traders Ltd.