Fed Too Late To Prevent A Housing Market Crash?

Real Estate is one of the biggest purchases anyone will make in their lifetime.  It can account for 30x to 300x one’s annual income and take over 30 years to pay off.  After you’re done paying for your property, now you have to keep paying to maintain it and to support the property taxes to keep it.  What has happened to the US Real Estate market since the 2008-09 global credit market collapse and is the US Fed behind the curve?

Case-Shiller Home Price Index

One of the most common indicators used to measure national housing affordability and price trend is the Case-Shiller Home Price Index.  In this chart, we are displaying the Case-Shiller National Home Price Index – including all markets in the US.  It is fairly easy to see that in last 2016, on a national level, the Case-Shiller index had reached the 2006 peak level.  After that, the new Trump economy pushed it even higher where we now near 210.  This is a very uncommon level for this index and because we are in uncharted territory with this 210 ranking, it should concern everyone that a reversion maybe somewhere in our future.

Fed Funds Rate data from early 1990 till now

The question we’ve been asking our research team is “Is the US Fed behind the curve in the markets and how will that translate into the US/Global equity markets?” When we consider the recent Fed rate increases (starting in 2016), our research team compared these levels to a modeling system we build back in 2013.  This modeling system suggests what the US Fed should have been doing based on certain GDP, Population and other factors.  The chart below is the Current Fed Funds Rate data from early 1990 till now.  The rise in valuation on the Case-Shiller index can almost be directly correlated to the amount of money available in the global markets and the US Fed rate levels.  More money and lower interest rates mean everyone was stampeding into housing expecting it to increase in value (which it did).  But what is next with the US Fed turning cautious recently?

US 30 Year Mortgage Rate

The US 30 Year Mortgage Rate has continued to rotate between 3.5% and 5% (on average).  We all know these rates vary depending on the borrower’s credit rating and other factors. Yet we believe any rates above 4% (on average) are dangerous for the markets and once lenders start to tighten requirements for loans while sellers start to aggressively decrease their asking price in order to attract buyers, we could see a massive shift in the market within a matter of months, not years.

CONCLUDING THOUGHTS:

The global markets are setting up for some type of event.  Capital is being pulled out of the markets as investors/traders wait to see what happens with the US/China trade issues, the EU as well as the US Presidential election in November 2020.  Many economists and researchers believe a recession is fast approaching and are waiting for any signs that it is starting. Are the turmoils setting up in the global stock market about to fracture into the global real estate market as well?  As investors and consumers engage in risk aversion processes, how will that result in continued economic activity in certain sectors of the global market?  Could it be that we are about to experience an economic contraction/reversion event that many analysts have failed to comprehend? In part II of this article, we’ll show you our US Fed proprietary modeling system’s data and show you why we believe something big is going to unfold over the next 3 to 5+ years.  We’ll also highlight some very interesting data regarding the US real estate market that you should be preparing for right now. Real Estate has already run through the price advance cycle and the price maturity cycle.  There is really only one cycle left to unfold at this point – the “price revaluation cycle”.  This is where the opportunity lies with a select real estate ETF I am keeping my eye on. I can tell you that huge moves are about to start unfolding not only in real estate, but metals, stocks, and currencies. Some of these super cycles are going to last years. Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime 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. I urge you to visit my Wealth Building Newsletter and if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible, get a FREE BAR OF GOLD and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next set of crisis’. Chris Vermeulen www.TheTechnicalTraders.com

August 19 Turn Date is Tomorrow – Are You Ready?

Our August 19 breakdown prediction from months ago has really taken root with many of our followers and readers.  We’ve been getting emails and messages from hundreds of our followers asking for updates regarding this prediction.  Well, here is the last update before the August 19th date (tomorrow) and we hope you have been taking our research to heart. First, we believe the August 19 breakdown date will be the start of something that could last for more than 5 to 12+ months.  So, please understand that our predicted date is not a make-or-break type of scenario for traders.  It means that we believe this date, based on our cycle research, will become a critical inflection point in price that may lead to bigger price swings, more volatility and some type of market breakdown event.  Thus, if you have already prepared for this event – perfect.  If this is the first time you are reading about our August 19 breakdown prediction, then we suggest you take a bit of time to review the following research posts. August 12, 2019: AUGUST 19 (CRAZY IVAN) EVENT ONLY A FEW DAYS AWAY August 7, 2019: OUR CUSTOM INDEX CHARTS SUGGEST THE MARKETS ARE IN FOR A WILD RIDE July 30, 2019: AUGUST 19 PRICE PEAK PREDICTION IS CONFIRMED BY OUR ADL PREDICTIVE SYSTEM July 13, 2019: MID-AUGUST IS A CRITICAL TURNING POINT FOR US STOCKS Originally, our research team identified July 2019 as a market top potential back in April/May 2019.  Later, our research team updated our analysis to include the August 19 breakdown date prediction based on our advanced predictive modeling tools and cycle analysis tools.  This became a critical event in the minds of our research team because it aligned with much of our other predictive research and aligned perfectly with what we were seeing in the charts as we neared the Summer. The top prediction for July 2019 by our research team became true as we entered early August.  This confirmation of our research and prediction back in April/May helped to solidify our belief that our August 19th breakdown prediction would likely become valid as well.  Whenever we make a prediction many months in advance, one has to understand that we are using our predictive analysis tools to suggest what price “wants” to try to do in the future.  External events can alter the price level by many factors to create what we call a “price anomaly”.  When the external events and price predictive outcomes align as they have been doing over the past 4+ months, it lends quite a bit of credibility to our earlier predictive research. In other words, we couldn’t be happier that our research team has been able to deliver incredible insight and analysis regarding the global markets and how the price will react over the past 4+ months.  This is something no other investment research firm on the planet is capable of doing with any degree of accuracy right now.  In fact, it is amazing to us that we’ll read some research post by a multi-national investment firm that may suggest something now that we’ve alerted our followers to 90 days earlier.

Now, onto some new details about the August 19th breakdown event…

First, be very cautious about investing in Cryptos throughout this event.  The initial move, if our research continues to play out, maybe an upside rally in BitCoin based on fear as the global markets start a breakdown process.  But we believe this move in Cryptos will be very short-lived as our current research suggests central banks, governments, and other institutions are getting ready to pounce on unregulated Crypto Currencies.  It is our belief that the breakdown event will possibly push Bitcoin higher on a “move to safety” rotation.  But once Bitcoin investors understand that governments and institutions are targeting these digital currency exchanges as criminal enterprises that threaten central banks and that there is no real safety in putting capital into a digital enterprise that can be shut down in minutes, we believe a rush to the exits will begin to take place. We believe the shift to real physical assets will take place as a shift in asset valuations continues to take place.  We believe the downside risk in Bitcoin is currently at least 30 to 40% from current values.  Our initial downside target is a level near $5570 for Bitcoin with potential for price support near $7900.

Daily Bitcoin Chart

This Daily Bitcoin chart highlights arrows that we drew in mid-July based on our expectations for future price rotation.  You can see that price, for the most part, followed our expectations and stayed within the Fibonacci price channel, near the lower price levels, while navigating the MAGENTA Fibonacci price amplitude arc (across the tops in price) as it moved towards our August 19th breakdown date.  It is critical to understand that price will attempt to either establish new price highs or new price lows based on Fibonacci price theory.  It is our belief that an upside rally towards the $11,300 level will be the “last rally” before a breakdown price trend pushes Bitcoin much lower.  This is likely the reaction of the “flight to safety” that we suggested earlier.

Weekly Bitcoin Chart

This Weekly Bitcoin chart provides a broader picture of the same event and how it will likely play out in the near future.  Remember, initially, global investors will attempt to pike into anything that is quick, easy and efficient to protect against perceived capital risks.  We are certain that some investors will attempt to pile into Cryptos as the breakdown event starts.  The question is, will this transition of capital stay safe long enough for investors to capitalize on the move?  We don’t believe so based on our research. If the price of Cryptos breaks through that Magenta Fibonacci price amplitude arc and initiates a move to new higher highs, then we’ll have to rethink our analysis.  But for right now, we are sticking to our belief that Cryptos will see an impulse rally that will quickly be followed by a breakdown event (likely the result of some government intervention or broader risk event).

Weekly S&P 500 Chart

This Weekly S&P 500 chart highlights what we believe is the most likely immediate price trend related to the October 2018 price decline.  If a downside price move does initiate as we expect because of the August 19 breakdown inflection point, we believe the S&P will target immediate support above $2400.  If you’ve followed any of our research, you already understand we believe the move dynamic economies on the planet are uniquely situated to actually benefit from this downside price event.  Therefore, we must understand that a “price exploration event”, like this, is a mechanism for investors to seek out true value levels for global assets.  All major price corrections are, in essence, a process of seeking out price levels where investors believe “true value” exists.

NASDAQ Weekly Transportation Index

The NASDAQ Transportation Index paints a very clear picture for our research team.  In fact, we find the TRAN particularly useful in our research of the global and US markets.  Even though we follow dozens of symbols and instruments, one of our key objectives is to attempt to validate our analysis across multiple instruments/charts and to attempt to identify faults in our expected outcomes. The recent downside price move in the TRAN aligns perfectly with our August 19 breakdown expectation.  It is very likely that some news or pricing event over the next 7+ days pushes the TRAN below the RED price channel and downward towards the middle Standard Deviation level near $3900.  Once the TRAN breaks the RED support level, you should expect the US and global markets to also begin a broader move lower. Ideally, the $3500 level should operate as a moderately hard price floor for this downside move.  $3900 would be considered the initial target of the downside price move whereas $3500 would be considered the initial “hard floor” support level.  Given these expectations, we have to consider the potential for a -15% to -25% initial downside price move in TRAN which would translate into a -18% to -35% downside price move in the S&P or NASDAQ.

CONCLUDING THOUGHTS:

In closing, August 19th is tomorrow (Monday).  This is where we’ll find out if our prediction will be viewed in the future as accurate or not.  The one thing about making public predictions for many months in advance is that you can’t go back and try to lie to your followers/readers.  Either it works out as we suggested or it does not.  We believe in the skills of our research team and predictive modeling systems.  We’ve seen how accurate they have been in the past and we believe we’ve delivered top-tier analysis to all of our followers and readers.  In fact, we know you can’t find anything like this type of research from other investment or research firms. Over the next 10 to 30+ days, we’ll be able to look back at our August 19th prediction and say “we were right” or “we were wrong” – that is part of trading, folks.  You use your best tools to make an educated assessment of current and future expectations, then act on it (if you want).  We’ll follow up on the other side of August 19th with all of you. Stay fluid as this event plays out, and most importantly, know that we don’t blindly trade on predictions, we use our short-term technical analysis and current market trends to enter and exit trades. The reality is, no matter if the markets roll over and crash or rocket higher, we will follow and trade with the market. The best thing about being technical traders is we don’t care which way the markets go. We just analyze and trade with the current market trend and make money in both directions and at the drop of a hat! If you want to trade and invest without the stress of a pending market collapse or missing out on another extended rally to new highs then join my Wealth Building Newsletter today and copy my proven technical trading setups and trade with me! Chris Vermeulen www.TheTechnicalTraders.com

Negative Yields Tell A Story Of Shifting Economic Leadership

Negative yields are becoming common for many of the world’s most mature economies.  The process of extending negative yields within these economies suggests that safety is more important than returns and that central banks realize that growth and increases in GDP are more important than positive returns on capital.  In the current economic environment, this suggests that global capital investors are seeking out alternative solutions to adequately develop longer-term opportunities and to develop native growth prospects that don’t currently exist. Our research team has been researching this phenomenon and how it relates to the continued “capital shift” that is taking place throughout the globe.  We believe we have some answers for anyone interested in our opinions.  We also believe the longer-term answers will depend on what happens over the next 5 to 7 years throughout the globe and how economic expectations shift as well as how global debt is dealt with. We urge all of our followers to read all of the segments of this research post about how the global central banks are pushing the envelope and have been for many years : Aug 14, 2019: GLOBAL CENTRAL BANKS MOVE TO KEEP THE PARTY ROLLING
Throughout our research, we referenced a number of current articles to determine our own outcomes and expectations.  Some of the articles we used as reference are listed below. Sources for some of our research: Each of these resources helped to create a bigger picture of what we believe will likely happen and how the process may unfold.  We’ll start by attempting to understand the core elements of the negative yield perspective and how/when it may change. Negative yields are a result of expected economic malaise rooted in the understanding that GDP growth and economic output are relatively flat and not expected to rise.  It comes down to the fact that if investors identified true growth opportunities in the major global economies, the yields for the debt instruments would reflect investor optimism (resulting in higher yields).  Thus, the core element of the current global economic malaise is that the planet is transitioning from a very fragile 19th-century economic model into something new – we call it the 21st-century economic model. This process will likely take an additional 10+ years to really begin to complete and may require many false starts as the world begins to understand exactly what is required to make this transition.  Debt, as a process of engaging in economic activity, is something that is essential for some level of inflation, income, and the creation of future growth.  Debt becomes a major issue when growth declines over extended periods of time resulting in a default risk for some nations/countries.  Yet, as the human population continues to expand and global central banks continue to attempt to find the spark that will launch the new economic growth model, debt is essential to avoid economic contraction. As we’ve hinted to, above, we believe the true answer is the transition away from 19th century economic structures that have resulted in massive risk factors (like unfunded pensions, unfunded state, and federal liabilities and massive global bank, investment banking and industrial level economic “black holes”) and to move towards true new world economic model.  What that looks like is something we are considering at the moment and have a few ideas of. Currently, there are a few new industries that show promise across the globe in terms of the new 21st-century economy and fledgling new industries. _  Cannabis industry _  Human Care Services Industry _  Alternate housing Solutions _  Eco-Sustainability Solutions _  Fintech Wealth Creation Solutions _  Social/Infrastructure Restoration Solutions We believe the next 10+ years will become very fluid as traditional economic models are replaced with newer, more alternative, types of economic solutions that spark real growth industries and opportunities.  We hope this process of transition initiates fairly quickly before any extended failure process takes place to start the reduction of capacity and resources that will be required for the rebuilding of the new 21st-century economy.  Time will tell. What this means for the rest of us is that we need to stay very focused on the fact that transitional asset shifts are very likely over the next 10+ years.  The only time in history that we believe was similar to the current global economic environment was shortly after WWII.  Global debts had skyrocketed and economic expectations throughout the planet were mild at best.  Germany and most of Europe was beginning a rebuilding process while most of SE Asia and Japan were also attempting to rebuild and restructure after a brutal series of global wars.  Much of the outside world was still in some form of an undeveloped economic structure at that time.  For most of the developed world, the process of rebuilding and identifying real economic growth came nearly 20 years after the end of WWII – near the late 1950s and early 1960s as a type of Renaissance Era. Given today’s world and how quickly things progress, we believe the process may take about 7 to 14 years to complete this time – depending on how quickly we are able to transition the global away from risks and systematic failures that are a result of clinging to failed 19th-century components. It is our opinion that wild price rotations in a variety of global assets will plague the global markets over the next 7+ years as pools of capital are moved into and out of opportunities for returns and gains.  We believe all of the world’s global markets are at risk for these very volatile rotations in price levels and that individual segments of the global markets will become targets for price declines and advances as capital attempts to force a “price discovery” process that seeks to identify true price values. The process of true price discovery is convoluted with the steps of shaking off old expectations, risks, liabilities, falsehoods, and processes while attempting to identify real future value and executing the steps to transition these resources into renewed future expectations.  It is almost like tearing down a structure in order to build something better and more efficient from the usable pieces of the old structure. Our opinion is that skilled technical traders need to stay very fluid right now and to understand that broader risk factors are at play throughout the globe.  Every major and minor economy on the planet will likely feel some aspect of the transition that is taking place within the global economy.  We’ve highlighted a few charts, below, to show variations of risk as related to the trends that have taken place over the past 8+ years.  Two of these charts shows a Pitchfork type of price channel.  Once price breaks below these price channels, we enter a new territory of downward price trends that will begin the price discovery process. This chart of the German DAX suggests the lower price trend channel is currently near $9300.  As time progresses, that channel continues to rise.  We would expect the $10,000 level to be a critical psychological level going forward.
This chart of the FSTE 100 shows a similar pattern where the lower price channel is near $5450 currently.  As we progress further in time, that level continues to rise.  We would suggest the $6000 will become critical for price support in the FTSE going forward.

The SPY sets up a similar pattern but shows more of our cycle and other research elements.  The lower BLUE price channel, near $240, is our current price channel providing longer-term support.  Below that level, we would fall back to the 2016 lows near $209.40.

Pay attention to what happens in the global markets over the next 6 to 18 months.  The US Presidential election, Brexit and a host of other global issues are still playing out.  We believe we are just starting this transition process and we believe now is the time for all skilled technical traders to fully understand that risks, price rotation, and true price discovery are very likely outcomes that may drive very wild price moves for many years into the future. We urge all of our followers to read all of the segments of this research post about how the global central banks are pushing the envelope and have been for many years : Aug 14, 2019: GLOBAL CENTRAL BANKS MOVE TO KEEP THE PARTY ROLLING

CONCLUDING THOUGHTS:

In closing, sit back and think about all the opportunities that will be created over the next 7+ years if you are skilled enough to trade these massive price swings.  Think about how the world will transition away from risk factors that continue to plague our future and towards something that will usher in a 50+ year run of opportunity and gains.  If you are young enough to enjoy this run, now is the time you will want to find a solid team of people that can help you navigate this process and find success. We are only halfway into August and we have already closed out 24.16% in gains from the falling SP500 using SDS, and the pop in gold using UGLD, and from the oversold bounce and rally in silver miners SIL. We urge all of our followers to pay attention to our research, consider your options very closely and prepare for this next move by pulling some of your active portfolio away from risks and into more protective measures.  This Crazy Ivan event is just 10 days away and we really want to urge all of our followers to not under-estimate this event cycle.

WARNING SIGNS ABOUT GOLD, SILVER, MINERS, AND S&P 500

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here. I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused mainly on the SP 500 index and the gold miners index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here. On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis. More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

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Today’s Stock, Metal, and Energy Forecasts – Aug 16 2019

Good morning, Lots of great analysis including Bitcoin today. Executive Summary: – Stocks set to gap higher and at short-term resistance. We will see if sellers jump back into the market and drive prices lower to fill the gap. Its Friday so if we have a weak close in price near the lows then Monday could be another huge sell-off. – Bonds are trading a major long term resistance trend channel on the monthly chart. I would expect bonds to stall and pullback over the next few months. The video shows this very clearly. – Metals are giving mixed signals and gold hit our key price target and resistance area yesterday for a quick 22% profit. – Oil and natural gas are still in downtrends but not giving much insight at this time.
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PART II – Silver, Transports, and Dow Jones Index At Targets – What Direct Next?

As you can probably imagine, we’ve received a ton of emails and questions about our recent predictions for precious metals and the August 19 breakdown date in the global markets.  It seems everyone is reading our research posts and is curious about how to prepare for these moves and how we came up with these predictions months in advance.  In this second part of our metals & Aug 19 update post, we’ll try to highlight our expectations going into the weekend prior to the Aug 19 breakdown date (Monday). In the first part of this research post, we highlighted what we believe is the imminent completion of the MID Leg 1 upside move in precious metals.  Our research continues to suggest that we are still setting up a major LEG 1 upside move which should be considered a larger Elliot Wave structure.  Within this Wave (Leg) 1 formation, a typical 5 wave structure is likely to continue forming.  Currently, we are creating the Wave 3 of the total of 5 waves that will complete a finished upside Wave (Leg 1).
If our analysis is correct, the peak that ends Wave 1 could be well above $2000 for Gold and well above $24 to $28 for Silver.  Then, of course, we’ll set up for a corrective Wave #2 before another, BIGGER, upside wave #3 sets up in precious metals. Taking a look at this Weekly Silver chart, you may be able to see the waves as we see them. _  The upside price move from Dec 14, 2015, to July 4, 2016 sets up the initial upside Wave 1 leg. _  The low in November 2018 sets up the end of corrective wave B from the initial bottom on December 14, 2015. _  This setup suggests we are currently starting a Wave 3 upside move which is usually 1.5x larger (or more) than Wave 1. _  Keep in mind that we believe all of these “minor wave” formations are part of a much larger 5 wave structure that is setting up. As you look at the Fibonacci diagram, above, remember that within each of those waves (1 through 5), a typical complex price wave formation (1, 3, 5, or other more complex wave formation) will set up to complete the broader wave formation.  Therefore, as you review the chart below, keep in mind that we believe everything originating from the bottom on December 14, 2015, till now is still part of the WAVE 1 formation on that Elliot Wave chart.  We are just getting started with this move, folks.

Silver Weekly Chart with Wave 1

The YELLOW arrows we’ve drawn on this Silver chart are our expectations for Silver over the next 6+ weeks and will potentially complete the initial upside minor wave 3 formation/ Leg 1.  We do understand that Elliot Wave counting can be difficult to understand, but please allow use to preface this research by suggesting that every larger wave consists of smaller waves.  And those smaller waves, consist of sets of even smaller waves.  And so it continues all the way down to sub-one-minute charts. The point we’re trying to make is that the $21 endpoint on this chart is very likely just the end of Wave 1, subwave 3, impulse move C which may target a total of D moves before reaching the end of subwave 3.  To put it in more simple terms, we are only about 20% into this upside move right now based on our expectations.
Why is the move in precious metals so important for our August 19 breakdown date prediction?  Because we would expect precious metals to begin a massive price rally if the global stock markets were expecting some type of major downside rotational event.  A more into metals is a safety play for global investors.  If something is happening in the markets and fear becomes more evident, then precious metals should start to rally.  This sets up an expectation that some type of price revaluation event is likely to take place in the near future. Thus, the upside price moves in Gold and Silver align perfectly with our August 19 breakdown expectation.  The key to this, in our opinion, is that Silver has really started to skyrocket on large volume.  This creates “confluence” in the metals group that fear is now driving investors into the lesser Silver market in preparation for a price reversion move soon.

Weekly Transportation Index chart

This Transportation Index chart highlights the fact that investors believe the future 3 to 6 months in the global economy will be moderately slower and that transportation activity and revenues will likely continue to diminish.  The Transportation Index is an excellent measure of future global economic expectations that can be used as a “general market indicator” for future expectations.

Dow Jones Weekly Chart

This YM Weekly chart highlights the key Fibonacci price trigger level that has setup near $26,170.  This is the critical price level for the YM to actually generate a confirmed Bearish price trend (end of week closing bar price level) which may be the initial downside price trigger.  As of the creation of this chart, the YM price was above this Fibonacci trigger level.  But as of right now, the YM price is already below the Fibonacci trigger level and if the YM closes the week below this level, then we would have a new confirmed Bearish Fibonacci price trend.

CONCLUDING THOUGHTS:

The interesting fact behind all of this is that these predictions were made by our research team months before today.  Our Gold prediction was initiated near October 5, 2018.  Our August 19 breakdown date was initiated near May 2019 (originally as a July Topping pattern expectation and later revised to the August 19 breakdown date).  All of these predictions were created using our proprietary price modeling, predictive analysis tools, and advanced cycle analysis tools. We find it absolutely incredible that we are able to make these types of predictions many months into the future and watch the markets do exactly what we suggested would happen.  Obviously, we hope you are finding value in our research posts and modeling systems as well? If you have not already prepared for the August 19 breakdown date prediction, we would suggest that you consider how you would want to protect any open long positions at this time (headed into the weekend) and set up your portfolio for a broader market rotation and upside move in precious metals over the next 3+ months.  It is not too late to take action to protect your assets – even weeks past August 19, you can still act to take advantage of these bigger price moves.  We are simply urging you to plan and prepare for these moves as you read our research posts.

FORECASTED MOVES FOR GOLD, SILVER, MINERS, AND STOCK INDEXES

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here. I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused on gold miners and the SP 500 index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here. On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis. More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

JOIN ME AND TRADE WITH A PROVEN STRATEGY TODAY!

Chris Vermeulen www.TheTechnicalTraders.com

Dow Plunge, Gold, Bonds Rally – AUDIO PODCAST

NEXT MOVES FOR GOLD, SILVER, MINERS, AND S&P 500

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here. Detailed report talking about where the next bull and bear markets are and how to identify them. This report focused on gold miners and the SP 500 index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here. We posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis. I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

JOIN ME AND TRADE WITH A PROVEN STRATEGY TODAY!

Chris Vermeulen www.TheTechnicalTraders.com

PART 4 – Global Central Banks Move To Keep The Party Rolling

In this last segment of our multi-part research post regarding the US Fed and the global central banks, it is becoming evident that the fear of a further market contraction is resulting in the decrease in rates and the push for additional QE functions.  Our research has shown that the global economy has partially recovered from the 2008-09 credit market collapse, but the process of the recovery has resulted in a “blowout” type of event where shifting capital intents and the transition from the 19th century economic model towards a new 21st century economic model is setting up the global markets for a massive rotation event over the next 12 to 24 months – possibly longer.

PART 1 OF THIS ARTICLE

PART 2 OF THIS ARTICLE

PART 3 OF THIS ARTICLE

It is our belief that capital is still doing what capital always does, seeking out the best opportunities for safety and returns.  Right now, that location is easily found in only certain segments of the markets; volatility, precious metals, certain energy sectors, US Treasuries and CASH.  The future events, including the massive rotational event that we believe is about to unfold in the global markets, will change the way capital is deployed for many years to come. It is very likely that this rotation event will create incredible opportunities for skilled technical traders or subscribers to our trade signal newsletter over the next 12 to 36 months and will likely prompt a further shift towards the new 21st-century economic model that we believe will be the ultimate outcome. Taking a brief look at our recent history highlights the fact that capital becomes fearful about 12 to 16 months before a major US election event.  Additionally, certain other factors related to the global economy heighten this fear as US/China trade issues, global debt issues and economic output issues continue to plague the markets.  The combination of these types of events set up a “perfect storm” type of economic cycle where skilled technical traders are just waiting for the impact event to hit before the markets begin a bigger rotational event. These types of events, similar to the 2000 and 2008-09 market crash event, are a process where price rotates out of a normal range and attempts to explore lower price levels that act as price support.  It is not uncommon for these types of events to happen, although the severity of these events is difficult to determine prior to their execution. The US Fed and global central banks set up an easy money process over the past 9+ years that allowed for capital to be deployed as a process that has setup this current massive rotational event.  At first, the intent was to support collapsing markets and institutions – we understand that.  But the nature of capital is to always seek out suitable safety and returns, so capital did what is always does hunt out the best opportunities for profits.  First, it rallied into the crashing real estate market and emerging markets – which had been crushed by the 2008-09 credit crisis event.  Next, it piled into the Asian markets and healthcare/technology markets.  At this time, it also started piling into the startup/VC markets throughout the world as well as certain commodities.  The recovery seemed to have created a booming and cash-flush market for anyone with two dollars to rub together. Then came the 2015-16 market contraction and the end of the US Fed QE processes.  At this time, China realized the need to control capital outflows and the US/Global markets slowed to a crawl as the US Presidential election cycle ramped-up.  It was just 12 months prior to this 2015-16 event that oil crashed from $114 to $46.  Within 2015-16, Oil continued to crash to levels below $30.  This was the equivalent of the blowout cycle for the global economy.  Headed into the 2016 US elections, the global economy was running on only 5 of 8 cylinders and was limping along hoping to find some way out of this mess. The November 2016 US elections were just what the global economy needed and everyone’s perceptions about the future changed almost overnight.  I remember watching the price of Gold on election night; +$75 early in the evening as Clinton was expected to win, then it continued to fall back to +$0 fairly late in the evening, then it fell to -$75 as the news of a Trump win was solidified.  This rotation equated to a nearly 10% rotation in less than 24 hours based on FEAR.  Once fear was abated, global investors and capital went to work seeking out the safest environments and best returns – like normal. This resurgence of capital into the markets set up of a new SOP (standard operating procedure) where capital began to be deployed in more risky environments and into broader and bigger investment structures.  This is the SETUP I’m trying to highlight that was created by the US Fed and central banks.  I don’t believe anyone thought, at that time in early 2017, that the current set of events would have transpired and I believe global governments, central banks, and global financial institutions thought, “Party on, dude!  We’re back to 2010 all over again”.  Boy, were they wrong. This time, the global central banks, governments and state-run enterprises engaged in bigger and more complex credit/debt structures while attempting to run the same game they were running back in 2010 and 2011.  The difference this time is that the US Fed started raising Fed Fund Rates and destroyed the US Dollar carry trade while putting increasing pressure on the global market, global debt and global trade.  The continued rally of the US Dollar after the 2018 lows helped to solidify the advantages and risks in the markets.  This upside rally in the US Dollar, after the 2014 to 2016 rally, really upset the balance of the global markets and setup an increasing pressure point for foreign markets. It soon became very evident that risks in the foreign markets could be partially mitigated by investing in the US stock market and by moving capital away from risky currencies and into US Dollar based assets.  Capital is always doing what it always does – seeking out the best environment for returns and protection from risk.  Thus, we have the setup right now – only 15 months before the 2020 US Presidential elections.  What happens now? This setup is likely to prompt a rotation in the global markets as well as within the US stock market.  It is very likely that a continued contraction in consumer and banking activity (think business, real estate, trade, commodities, and others) will prompt a contraction in global economics very similar to what happened in 2014~2016.  This process will likely put extreme risk factors at play in some of the most fragile economies and state-run enterprises on the planet.  Once the flooring begins to crack in some of these markets, we’ll see how this event will play out.  Right now, our eye is watching Europe and Asia for early warning signs. The US Fed will continue to manipulate the FFR levels in an attempt to help mitigate the risks associated with this contraction event.  It is likely that the US Fed already sees what we see and it attempting to position themselves into a more responsive stance given the potential outcomes.  Inadvertently, the US Fed and global central banks presented an offer that was too good for anyone to ignore – easy cash.  What they didn’t expect is that the 2014 to 2019 rally in the US Dollar and US stock market would transition capital deployment within the global market in such a way that it has – setting up the current event cycle. We believe a downside pricing event is very likely over the next 10 to 25+ days where the US stock market may fall 12 to 25%, targeting levels shown on this chart (or slightly lower) as this rotational event takes place.  Ultimately, the US markets will recover much quicker than many foreign/global markets.  Our estimates are that the recovery in the US markets will likely begin to take place near March or April 2020 and continue higher beyond this date.
This Custom Smart Cash Index chart highlights the type of capital shift activity we’ve been describing to our readers and followers.  It is easy to see that capital moved out of risky investments within the downturns on this chart and into the most opportunistic equity markets within the uptrends on this chart.  Remember, most opportunistic markets are sometimes outside of the scope of this Smart Cash index.  For example, this chart does not relate strength in the Precious Metals markets or other commodities/currencies.  All this chart is trying to highlight for followers is how capital is being deployed in viable global equity markets and when capital is exiting or entering these markets. Given the current setup, we would expect a breakdown in this Smart Cash Index over the next 4+ months to set up a new lower price level establishing a base/bottom before attempting to move higher.  We believe the 100 level, shown as historical support, is a proper target price level for this move initially.
Lastly, we believe capital is moving aggressively into the precious metals markets and we urge all skilled technical traders to pay attention to this chart of the Gold/Silver ratio.  If our analysis is correct and a larger rotation price cycle is about to unfold in the global markets, which may last well into 2020 (or beyond) for certain global markets, then you really need to pay attention to the upside potential for this Gold/Silver ratio. As we’ve drawn on this chart, if this ratio recovers to 50% of the 2011 peak levels as this rotation unloads on the global market, this would push Gold and Silver prices to levels potentially 60% to 140%+ higher than current levels.  I understand how hard it is to understand these types of incredible price increases and how they could possibly be relative to current prices, but trust us in our research.  Gold and Silver prices have been measurably depressed over the past 3 to 4 years.  Unleashing the real valuation levels of these precious metals at a time when risk factors are excessive suggests that Gold could easily be trading above $3200 and Silver above $60 to $65 within 6 to 12 months.

CONCLUDING THOUGHTS:

In closing, we want to urge all skilled technical traders to keep a very open perspective to the “Party on, Dude” mode of the global central banks and be aware that a very fragile floor is the only thing holding up the markets in another massive US presidential election cycle event.  In our opinion, the writing is already on the wall and we are preparing for this rotational event and alerting our members on what to do to profit from these moves. The Federal Reserve and global central banks will attempt to keep the party rolling for as long as possible because they know the downside event could be something they don’t want to have to deal with.  So watch how these global central banks attempt to nudge public perception away from risks and towards the “party on” mode.  Stay alert.  Stay aware.  When this breaks, it will break quickly and aggressively. Using technical analysis and proven strategies we can follow the market trends and profit from them no matter which the market moves. We bet with the market (the house) and provide entry, target, and stops for all trades we initiate.

NEXT MOVES FOR GOLD, SILVER, MINERS, AND S&P 500

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here. Detailed report talking about where the next bull and bear markets are and how to identify them. This report focused on gold miners and the SP 500 index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here. We posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis. I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

JOIN ME AND TRADE WITH A PROVEN STRATEGY TODAY!

Chris Vermeulen www.TheTechnicalTraders.com

Global Central Banks Move To Keep The Party Rolling – Part III

This section of our multi-part article regarding current and past central bank actions, we are going to attempt to look at key elements of the past and present to highlight what we believe may turn out to be an incredible “setup” in the global markets. This setup is almost like a complex chess game where two skilled players battle for control and near the end of the game, one player is left with the King, a Rook, and a Pawn while the other player has a dramatic advantage with stronger chess pieces.  Yet, as the game continues, the weaker player is able to remove one or two of the stronger players key pieces and move his pawn to his opponent’s side to recover his Queen – thus altering the dynamic of the game and eventually winning. This actually happened to me once playing against a friend of mine.  My friend was so wrapped up in trying to move my King into checkmate, he left his other pieces open for me to target and remove – while leaving my Pawn untouched.  After I had gained a clear advantage by removing his stronger pieces, I cornered his king within an area that allowed me to move my Pawn to his side of the board whereas I regained my Queen.  At that point, the game was nearly over for him – and he knew it. Did the US Fed and global central banks set up a similar type of process in the global economy? We can rephrase this question as did the global central banks inadvertently set up a massive credit/debt problem by attempting to pour capital into the global markets to spark an economic recovery?  And did the acquisition of all of this debt/credit setup a “chase after the King” moment where foreign nations failed to understand the underlying risks associated with this move?  Have the dynamics of the global markets shifted away from the advantages that were present three to four+ years ago?

PART 1 of this article – Click Here

PART 2 of this article – Click Here

So, let’s investigate the data to see what we can find out about what is changing in the markets. One change that is critical to the understanding of consumer sentiment is the savings rates for consumers.  Since the 2008-09 credit market crisis, Americans have started saving more of their income even though rates for savings have dramatically fallen.  This is a shift in consumer sentiment that suggests consumers are attempting to put more cash into savings in preparation for some future event.
The Fed expects economic growth rates in the US to run at far lower levels than in 2011 and 2012.  With all the capital that has been poured into the global markets, one would think growth rates would be moderately higher or climbing.  But we believe the global economy is stuck in a mode where capital is unable to be effectively deployed throughout the globe because of inherent economic failures and processes that prevent future growth.  We’ve discussed this in the previous article about how the US and global economies are stuck in a mostly 19th-century mode of operation while attempting to transition into a 21st-century mode of operation.  This transition may take another 10 to 20+ year, but it will eventually happen. Until that transition is completed, expect further bumps in the road as traditional expectations for investment and returns are shattered – forcing a move towards a 21st-century economic revival.
The price of commodities is a perfect example of how the 19th-century economy is purging itself while the new 21st-century economy is searching for a foundation/footing to take root.  Oil is a prime example of the 19th-century economic foundation for growth and economic output.  Yet in today’s world of solar, green and various other energy sources, Oil has fallen to near $52 ppb recently and could fall as low as $35 to $38 ppb in the future months.  Considering Oil was recently above $120 bbp – what the heck happened? This chart of the Index of All Commodities prices highlights the shift in capital and the shift in the economic mode of operation that is currently taking place.  What was an increasing commodities price market in 2005~07 and 2010~12 has now been replaced with a decreasing commodity pricing market. Is this indicative of a collapse in the global economy?  In some ways, yes.  But we believe this is more indicative of a transitional economic shift away from 19th-century processes and functions and towards a more dynamic 21st century economic model for the globe. This process, though, will be full of very large price swings, failures, successes, and opportunities for those skilled technical traders that are able to catch the moves and setup as they happen.
Lastly, the US Consumer Price Index chart.  Notice how the GREEN highlighted area (from the early 1960s till 2000 were filled with positive CPI results?  Notice how that changed in 2000 and how after 2000 the CPI levels fluctuated from positive to negative quite regularly?  Now, pay attention to how the expansion of peaks immediately after the 2000 Dot Com bubble burst has been replaced with a contraction of peaks after the 2008-09 credit market crisis.  What is causing the CPI to contract in this manner?  Why is is that expansion of commodity pricing is unable to expand as it had been going for decades before 2008-09?
The key to understanding all of this is that the expansion prior to 2000 was an expansion fueled by rising wages, income, wealth creation and opportunity from a mature 19th-century economic model.  The 1990 to 2000 narrow range in the CPI was related to the “early shift” away from the 19th-century economic mode and into the Dot Com (internet) mode of economic activity (where this new economic model was taking away from brick-and-mortar shopping malls and replacing it with virtual commerce activities.  The recovery in 2005 was fueled by moderate quantitative easing in the US as well as a resurgence in more traditional economic functions related to the growth of economic opportunity in foreign nations, Europe and the push to expand digital technology throughout most of the developing world. Then came the crisis of 2008-09, which was like blowing out 3 pistons of your V8 motor.  You may still be able to limp the car around and back home, but you probably have to keep pouring high-octane fuel into it to keep it running and hope it does not blow out another piston or two. This Custom Smart Cash Index chart is a perfect example of how capital works in the markets.  It attempts to avoid risk by reducing exposure to risk events and attempts to pile into an opportunity as security and returns are setup for optimum outcomes. Notice how in 2008 capital fled the global markets and how it slowly reentered the markets from 2011 to 2015.  Pay attention to the dips in this Smart Cash Index and you’ll notice how these dips align with the US Fed and global central bank QE functions.  Pay very close attention to the dip in 2015~2016.  Why would cash want to avoid risks setting up during this time and what caused the global markets to fear excessive risks then?  US Presidential elections – that’s what happened.  And what is happening in November 2020? Yup – you guessed it. Why would risks become so heightened at these times and throughout collapse events and where does capital rush into when these types of events happen?

CONCLUDING THOUGHTS:

In Part IV of this article, we’ll try to answer some of your bigger questions and we’ll explain why we believe an incredible opportunity is setting up for skilled technical traders over the next 24+ months. Using technical analysis and proven strategies we can follow the market trends and profit from them no matter which the market moves. We bet with the market (the house) and provide entry, target, and stops for all trades we initiate.

NEXT MOVES FOR GOLD, SILVER, MINERS, AND S&P 500

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here. I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused on gold miners and the SP 500 index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here. On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis. More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

JOIN ME AND TRADE WITH A PROVEN STRATEGY TODAY!

Chris Vermeulen www.TheTechnicalTraders.com

August 19 (Crazy Ivan) Event Only A Few Days Away

Our researchers have created this research post to highlight a big price move based on super-cycle research and patterns that should begin on or near August 19, 2019.  Back in April/May 2019, we started warning of a critical top formation we believed was aligned for July 2019.  In May/June, we altered this date to align more closely with our super-cycle research and determined the August 19, 2019 date. It is our belief that this date will initiate a breakdown price move that may align with external news related or economic related data.  Our research continues to point to the potential for a large global breakdown in equity prices related to some type of near-crisis event.  It could be related to something within the US or outside the US – but either way, we slice it, August 19 looks to be the date we need to focus on. – Crazy Ivan Market Prediction for Stock Market and Volatility Article – Crazy Ivan Precious Metals Prediction Article

FANG Custom Index Weekly Chart

This FANG custom index weekly chart highlights how our Fibonacci Price Amplitude Arcs work in alignment with price rotation and trends.  The theory behind this analysis is that price trends operate at a frequency and amplitude that we can map out – much like Tesla’s theory of Mechanical Resonance. In our studies, we have learned how to identify relative price amplitude and frequency factors, then align these to price peaks and valleys.  The result is that we can see where hidden support and resistance channels form and where the price will potentially reach an “inflection point”. Right now, this week and next on this FANG chart are likely to see increased volatility and the potential for a price breakdown as the current RED arc level sets up a massive resistance channel.

Custom Smart Cash Index Chart

Our custom Smart Cash Index chart is also highlighting an overall weakness in the US and global markets.  Once this chart breaks the lower price channel level, there is a very strong possibility that this index will break down toward the $134 level (or lower) as the global markets attempt to identify price support.  Overall lows could target the $111 level (seeing in 2016) if the breakdown is excessive.

Custom Volatility Index

This Custom Volatility Index is suggesting a deeper price low is setting up if the August 19 breakdown date acts as we suspect.  If the global markets break lower, then this Custom Volatility Index will be pushed into an extreme low territory (below 5.5) were a very deep bottom/base will setup (as we have seen before).  If it reaches levels below 4.0, then we should be very close to a very deep “V” type bottom. The recovery from this base/bottom will likely be somewhat extended as the shift in the capital around the globe seeks out the best, safest locations and returns.  We believe this bottom will complete near the end of 2019 or into early 2020 where the US markets will quickly gain acceptance as the location for global assets to avoid extended risks.

What Does All This Mean?

August 19 is only a few days away and we could see fireworks start in the global financial market place. If our analysis is correct, we have only 4 to 7+ days before a major breakdown in price starts and we are yet unsure of the source or intensity of this event if there is one. Multiple analysis types are pointing to August as a key turn date and the market could fall by as much as 16-25% if there is a trigger event to spark the crisis. What should you do? Well, being a pilot, quasi engineer, and technical trader using logic, rules, and processes to do things. I always wait for the price to confirm a new trend before taking action and entering a position. This is how we profited last week from the SP500 index falling. We traded the 2x bear fund SDS and locked in a quick profit. The days are long gone where I would buy or sell stocks or trends based on tips and forecasts. That type of trading is really called legal gambling and the odds generally are not in your favor unless you tips are coming from insiders who actually know something. Using technical analysis and proven strategies we can follow the market trends and profit from them no matter which the market moves. We bet with the market (the house) and provide entry, target, and stops for all trades we initiate.

Join Me And Trade With a Proven Strategy Today!

Chris Vermeulen www.TheTechnicalTraders.com

Part II – Global Central Banks Kick Can Down The Road Again

As we continue to explore the events of the past 10 to 20+ years and how the global central banks continue to attempt to navigate through these difficult times, we want to take a few minutes to try to understand and explain how the capital that has exploded into the global markets has been deployed and used to chase returns, risk and opportunity and may continue to be deployed more efficiently going forward. Read Part I of this series here: https://www.thetechnicaltraders.com/global-central-banks-move-to-keep-the-party-rolling-onward/ The recent news that the global central banks may begin a new round of stimulus and easing got us thinking – “what next?”.  Over the past 10 to 20+ years, global central banks have attempted to prompt an economic recovery that seems to slip past economic planners and we believe that is because core functions of the global economy are weaker than many expect.  We’re going to try to explore some of these factors and prepare traders for what may come in the future months. Much of the capital that was dumped into the markets was deployed into the global equity markets as investments in emerging markets, capital markets, and the US stock market.  As much as everyone wants to think this capital went into infrastructure and other essential investments, much of it went into the only thing that was capable of generating an easy return with limited risk – the global stock market. At first, after 2008, we saw an immediate jump in emerging markets.  This sector of the global economy had been hard hit by the collapse in 2008-09 and an incredible opportunity existed because of a price anomaly that was created near the bottom in 2009.  Emerging markets were recipients of some capital when the central banks began to infuse money into the system, but their equity markets were uniquely positioned for advancements because of the pricing levels after the crash. The SPEM chart below highlights the recovery in the emerging market that took place almost immediately after the bottom formed in 2009.  We can clearly see the immediate price advance and the resulting sideways price action after 2011.  Once this sector recovered up to previous 2007 levels, there was really nothing else to push it much higher. Traders should also take notice of the rally in 2016 and 2017.  This rally was based on forward expectations that renewed interest in emerging markets would result in increased returns.  These aligned with expectations resulting from the US Presidential election (2016) as well.  This price advance consisted of a +86% price advance from $23 to $42.  Could it happen again? We believe the next phase of the global market recovery will result in a similar type of price advance after new lows are established in emerging markets.  Skilled technical traders should continue to plan for and prepare for this type of setup once emerging markets complete a process of exploring lower lows to form a bottom.  This process should complete just before the 2020 US presidential elections and will likely result in another price anomaly setup where the price is well below expected asset levels (extreme pessimism) and will set up as an incredible +40% to +80% upside potential as renewed optimism and the continued transitional process of the global economy persists.  Traders just need to wait for the setup – then execute their trades.
The continued process of how capital rolls from one environment to another in search of returns is something we have attempted to explain in detail over the past months.  We call it the “capital shift” process.  Our belief is that capital (cash) is always hunting for suitable investments in various forms and continues to shift from one environment (market segment) to another as opportunities (ROI) and risks (healthy investment environments) change.  So, think of capital as a migratory asset that continues to shift into and out of various segments of the market as opportunities and risks present themselves. One of the biggest benefactors of the quantitative easing and central bank policies of the past 10+ years has been the US equity market.  Take a look at this NAS100 chart to see what we mean. When we take into consideration the post 9/11 market rally in this NAS100 chart (highlighted by the blue rectangle) we can see that, at that time, the capital was focused away from the US markets because other foreign markets were better positioned in terms of ROI and risk.  Even though the US was engaging in moderate QE processes to recover from a moderate economic crisis, a price advance in the NAS100 was muted – nothing like the right side of this chart. The post-2009 advance in the NAS100 is a completely different story.  The technology sector in the US had shifted away from a heavy risk factor and into a “unicorn” mode by 2012/2013.  This shift in the investment environment meant that global traders saw the US technology market (NAS100) and an excellent opportunity for capital deployment.  As more and more cash poured into the NAS100 chasing these gains, prices continued to skyrocket higher.  What next?
Unless the dynamics of this market shift away from expected gains or the US Dollar weakens dramatically, we believe the US stock market will continue to experience some volatility and continued price advancement while capital waits to see what happens throughout the rest of the global market. We do believe the increased volatility of the past 2 years highlights an extended risk for rotation over the next 2+ years and we believe a move lower may be something we have to prepare for as the 6000 level has already been established as support.  Therefore, we are not suggesting the NAS100 will go straight up from here.  We are suggesting that unless something dramatic happens to change the economic environment, the US markets will continue to be viewed as opportunistic by global investors and that dips in price, even big ones, will likely respond with a nearly immediate recovery in price – even if a dip were to happen well below the 6000 level. Once the economic environment shifts away from opportunity in the US, then all bets are off in terms of downside risk – if this ever happens. Another factor that everyone must be aware of is Real Estate.  Recently, US real estate has continued to rally as rates have continued to maintain some level of affordability throughout most of the US.  Certain areas have gotten very un-affordable and these markets are already experiencing a pricing reversion where prices are declining as sellers attempt to attract buyers at high prices.  Overall, though, the health of the US real estate market is still moderately strong. One thing that we would be concerned about is a perceptional shift away from buying if the US Fed and global central banks engage in new stimulus processes.  Consumers may view this process as a warning that some concern is underlying the efforts of the central banks and hold off on buying real estate while they wait to see what happens after the US 2020 elections.  We believe this may already be happening right now.

CONCLUDING THOUGHTS:

The REZ real estate ETF continues to push higher as pricing becomes an issue and sales levels continue to support a fairly active market.  We are concerned that a sharp change in perception could be taking place over the next 12+ months as fears of a change in US political leadership may thwart or diminish some forward expectations.  Investors need to pay attention to all aspects of the markets in order to prepare for future opportunities and price moves. In Part III of this article, we’ll look into some of the fundamental elements of the US and global economies and how the past actions of the US Fed and global central banks may have set up the global markets for the bigger price rotations we are expecting over the next 12 to 24+ months. Also, takes a look at today’s charts compared to the 2008 market top and I can’t warn enough that the next financial crisis (bear market) is scary close, possibly just a couple weeks away. See Scary Bear Market Setup Charts.

FREE GOLD OR SILVER WITH SUBSCRIPTION TO PREMIUM TRADE SIGNALS!

Chris Vermeulen – www.TheTechnicalTraders.com