Friday morning I was live on TraderTV and share some charts and trade setups in sectors starting fresh new uptrends.
Chris Vermeulen
Chief Market Strategist
Founder of Technical Trader Ltd.
Archive for month: May, 2020
Current data released for the May Real Estate and Consumer Spending activity suggests a wave of refinancing is taking place – and not much else. Pending home sales slipped to 69. That level is 7.4 points below the lowest level in 2010 – at the height of the 2008-09 credit crisis that collapsed the global Real Estate values. How big is this new low level in Pending home sales? It’s HUGE.
It suggests the rate of sales in the US for Real Estate has collapsed beyond levels that were seen at the worst possible time in recent history (July 2010). In fact, over the past 20 years, there has never been a time when the pending home sales index has collapsed below 74 to 75 – until today.
2008-2011 PENDING HOME SALES DATA
The sudden collapse of Pending Home Sales as a result of the COVID-19 virus event should not have come as any surprise to skilled technical investors. Don’t misread this data – there are still homes selling in the US market, buyers are just being far more selective and discerning in regards to their purchases and timing.
Anyone who understands Supply and Demand theory knows that when price levels are perceived to be excessive, consumers slow their purchases considerably as the supply is determined to be overvalued in price. This slowing of purchasing results in a supply glut that will eventually push price levels lower (attempting to attract more buyers).
It is this process of shifting perceptions in the Supply and Demand relationship that is likely taking place right now in the Real Estate market. Low rates in combination with the COVID-19 virus are not prompting more sales of Real Estate right now. Consumers simply don’t have the confidence (perception) that future price appreciation in Real Estate will be substantially based on the current market environment. Thus, the perception of the value of Real Estate changes from optimism to caution.
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2020 PENDING HOME SALES DATA
A large portion of the issue related to Real Estate is consumer confidence in their ability to earn real incomes and the stability of employment and opportunity related to their future. The COVID-19 virus event has really disrupted a large portion of the US consumer market as well as the future expectations of consumers and spending habits. This disruption is likely to take at least 12 to 24+ months to settle before any real bottom is likely to take place on a broad scale.
Real consumer spending has collapsed in April and May 2020. Even though the US government has spent trillions attempting to support the US economy, the continued shutdown of cities and states has cut consumers’ jobs, incomes, and the need to go out and spend like normal. Even though they may be saving some extra money throughout this time, the destruction to local and state economies/revenues is devastating.
MAY 2020 REAL CONSUMER SPENDING DATA
The one aspect of the low-interest rates that we do expect to peak soon is the refinance market. Stronger homeowners with solid income opportunities are able to refinance at lower rates now and that activity seems to be spiking. This is very similar to what happened in 2009-2011 where stronger consumers were able to take advantage of very low-interest rates and were able to shed the 5 to 7%+ mortgages and refinance at much lower levels. Once these transactions peak, these homeowners will likely be settled in their homes for another 5 to 10+ years with new lower rates (unless something disrupts their financial/income situation).
MAY 2020 MORTGAGE REFINANCE INDEX
CONCLUDING THOUGHTS:
Combining all of this data into a consensus analysis for technical traders, we come to the conclusion that a wave of refinancing has likely peaked and that consumers are now in the early stage of attempting to understand what the recovery will look like going forward over the next 6 to 12+ months. Add into the mix that we have a US Presidential election taking place in 6 months and the potential policy and tax changes that could take place as a result of this election and we have a real “consumer abyss” setting up over the next 6+ months.
With the Fed doing all they can to support the markets, the COVID-19 virus still causing shutdowns and other issues and the consumer waiting for some clear skies and positive expectations, the US and global economy could be stuck in a mode of greatly decreased consumer activity over the next 6 to 12+ months – which translates into a shift in perspective related to business creation, optimism, income/earnings and much more. A dramatic shift in consumer expectations over a longer period of time could result in far more damaging longer-term issues for assets, state and local governments, and more.
Once the wave of refinancing is completed, we’ll have to see how the housing market data relates to increased consumer optimism. At this point, we don’t believe anything is likely to change consumer attitudes until after the November 2020 elections. Skilled technical traders should prepare for some really big price swings over the next 12+ months. This is the time for technical traders to shine with the setups and data that is being presented right now as well as in the future.
You don’t have to spend days or weeks trying to learn my system. You don’t have to try to learn to make these decisions on your own or follow the markets 24/7 – I do that for you. All you have to do is follow my research and trading signals and start benefiting from my research and trades. My new mobile app makes it simple – download the app, sign in and everything is delivered to your phone, tablet, or desktop.
I offer trading signals for active traders, long-term investors, and wealth/asset managers. Each of these services is driven by my own experience and my proprietary trading systems and modeling systems. I have a small team of dedicated researchers and developers that do nothing but research and find trading signals for my members. Our objective is to help you protect and grow your wealth.
Please take a moment to visit www.TheTechnicalTraders.com/tti to learn more about our passive long term investing signals, Also, get our swing trading signals here www.TheTechnicalTraders.com/ttt. I can’t say it any better than this… I want to help you create success while helping you protect and preserve your wealth – it’s that simple.
Chris Vermeulen
Chief Market Strategist
Founder of Technical Trader Ltd.
M2 Velocity is the measurement of capital circulating within the economy. The faster capital circulates within the economy, the more that capital is being deployed within the economy to create output and opportunities for economic growth. When M2 Velocity contracts, capital is being deployed in investments or assets that prevent that capital from further circulation within the economy – thus preventing further output and opportunity growth features.
The decline in M2 Velocity over the past 10+ years has been dramatic and consistent with the dramatic new zero US Federal Reserve interest rates initiated since just after the 2008 credit crisis market collapse. It appears to our researchers that these extended periods of zero interest rates deflate the capability of money circulating throughout the economy and engaging in real growth opportunities for investment and capital inflation.
It also suggests that the US Federal Reserve, while attempting to support the US economy and global markets, maybe destructively engaging in policy that removes the capital function from the markets in a systematic process. Eventually, something will break related to M2 Velocity and/or the global economy. As more capital pours into less liquid assets and/or broader investment funds and Bonds, this process ties capital up into assets that take investment away from Main Street and the lower/middle class. There is less capital available to support the ground level economy as more and more capital ends up buried in longer-term investment assets.
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VELOCITY OF M2 MONEY STOCK
US FEDERAL FUNDS RATE CHART
We believe the collapse of the M2 Velocity rate is similar to a slow decline of economic capacity and output over a longer period of time. We believe this process will likely end in a series of defaults and bankruptcies as a result of capital being stored away into longer-term assets and investments (pensions, investment funds, and other types of longer-term assets). As this capital is taken away from the core engine of economic growth (main street and startups), the process of slowly starving the economy begins.
We believe we’ve already entered a period of decline that has lasted at least 15+ years and the “blowout process” that ends this decline will be somewhat cataclysmic. One way or another, the function of capital must return to levels of activity that supports a ground-level engagement of economic growth and opportunity. A healthy balance of capital available to all levels of society and deployed in means to support growth and opportunity is essential for the proper health and future advancement of global economies.
It appears that after 2008-09, the global economy disconnected from reality as investors began relying on institutional level investments and speculation in large scale assets instead of ground-level investments and core economic function. This translates into a very euphoric mode for stocks and commodities where capital chases capital around the planet seeking out undervalued and opportunistic investments… until…
Pay attention to what happens over the next 4 to 5+ years related to the COVID-19 virus event. We believe this virus event could be a “monkey wrench” in the capabilities and functions of the global economy over the next 5+ years. Pay attention to what is really happening as capital plays the “dog chasing its tail” routine and the central banks attempt to stimulate economic activity by printing more and more money. If you understand what we are trying to suggest in this article – printing more and more money at this stage of the game is like saying “diving our of the 20th-floor window is not enough – let’s go up to the 50th floor and give it a try”.
Hang tight, there are going to be some very interesting and big price swings over the next 4+ years in the US and global markets. Skilled technical traders should prepare for the opportunity of a lifetime if they understand what to watch for and how to protect assets.
You don’t have to spend days or weeks trying to learn my system. You don’t have to try to learn to make these decisions on your own or follow the markets 24/7 – I do that for you. All you have to do is follow my research and trading signals and start benefiting from my research and trades. My new mobile app makes it simple – download the app, sign in and everything is delivered to your phone, tablet, or desktop.
I offer trading signals for active traders, long-term investors, and wealth/asset managers. Each of these services is driven by my own experience and my proprietary trading systems and modeling systems. I have a small team of dedicated researchers and developers that do nothing but research and find trading signals for my members. Our objective is to help you protect and grow your wealth.
Please take a moment to visit www.TheTechnicalTraders.com to learn more. I can’t say it any better than this… I want to help you create success while helping you protect and preserve your wealth – it’s that simple.
Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com
Our research team has become increasingly concerned that the US Fed support for the markets has pushed price levels well above true valuation levels and that a risk of a downside price move is still rather high. Recently, we published a research article highlighting our Adaptive Dynamic Learning (ADL) predictive modeling system results showing the US stock market was 12% to 15% overvalued based on our ADL results. Today, Tuesday, May 26, the markets opened much higher which extends that true valuation gap.
We understand that everyone expects the markets to go back to where they were before the COVID-19 virus event happened – and that is likely going to happen over time. Our research team believes the disruption of the global economy over the past 70+ days will result in a very difficult Q2: 2020 and some very big downside numbers. Globally, we believe the disruption to the consumer and services sector has been strong enough to really disrupt forward expectations and earnings capabilities. We’ve been warning our friends and followers to be very cautious of this upside price trend as the Fed is driving prices higher while the foundations of the global economy (consumers, services, goods, and retail) continue to crumble away.
Our biggest concern is a sharp downside rotation related to overvalued markets and sudden news or a new economic event that disrupts forward expectations. Obviously, Q2 data will likely be a big concern for many, yet we believe something else could act as a catalyst for a reversion event. Possibly global political news? Possibly some type of extended collateral damage related to the global economy? Possibly something related to earnings expectations going forward through the rest of 2020 and beyond? We believe things are not “back to normal” at this stage of the recovery and we believe the markets are moderately over-extended at this time.
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ES ADL PREDICTIVE MODELING WEEKLY CHART
This Weekly ES (S&P500 E-Mini Futures) chart shows our ADL predictive modeling system’s expected future price level targets which suggest the current market price level is 12% to 15% (or more) above these target levels. Remember, the ADL system uses a custom price mapping technology that is designed to identify “price/technical DNA markers” within historical data – then attempt to map out future price level activity and track the highest probable outcomes of these price DNA markers. The objective of this research tool is to show us what type of price activity is highly probable based on historical data and predictive modeling research. This unique trigger on the ES chart consisted of 5 historical DNA markers and suggests a future probability of 70% to 87% regarding future price target levels.
One aspect of our research while using the ADL predictive modeling system and our other tools it the concept of “price anomalies”. These are rallies or sell-offs that extend beyond support or resistance levels and when price levels trend away from ADL predicted target levels. We created the term “price anomaly” and explain it to our members as “some external force is pushing the price above or below the projected target level. Once this force abates or diminishes, the price will likely move, very quickly, to levels near the ADL predicted target levels.”.
Currently, the US Fed is engaging in a moderate support effort for the US stock market and it is reportedly buying $5+ billion a day in bonds and assets. Although it may seem impossible to fight the fed, we believe the markets (like nature) are almost impossible to fool and control. We believe that price will react to market conditions and that future price rotation (both up and down) will continue to be more volatile than many traders expect.
CUSTOM VOLATILITY INDEX WEEKLY CHART
This Custom Volatility Index chart highlights the extremely low levels recently established by the COVID-19 market sell-off. These new low levels have created the deepest sell-off levels on this chart in 20+ years. It has also established a new, highly volatile, downward price channel that our researchers are following to help us determine where resistance will likely be found.
We believe a new downward price rotation is setting up for some time in the near future that will establish a tighter price channel and assist us in determining when and where the ultimate price bottom will setup and complete. With the VIX levels still near 27~29, we are certain that volatility has not decreased even though price levels have attempted a solid recovery over the past 8+ weeks.
CUSTOM SMART CASH INDEX WEEKLY CHART
This Weekly Custom Smart Cash Index chart highlights the true function of price within the US stock market and highlights the overall weakness still at play within the current markets. Even though the NQ has rallied to near all-time highs, the Smart Cash Index is showing the broader market is still rather weak and that recent price activity has stalled into a sideways/flag formation. The broader market buying that took place near the end of March 2020 and throughout April 2020 has stalled. The Fed became the market for the past 8+ weeks and as the Fed diminishes its activity, it will be up to the markets to manage trends and future expectations going forward.
Our researchers are concerned that a sudden breakdown in the Smart Cash index may prompt a bigger downside price move in the global markets. Our research team has continued to issue warnings to our members to run protective stops on any open long positions, to properly size trades to avoid excessive risks and to properly hedge your trading using precious metals, miners, and Bonds. In short, these risks are very real. You can still make a profit trading the long side of the markets, but we suggest that you take all the necessary steps to protect your trades.
CUSTOM US STOCK MARKET INDEX WEEKLY CHART
This last Weekly Custom US Stock Market chart highlights two very important levels related to our Fibonacci Price Amplitude Arcs. These arcs represent critical Fibonacci support and resistance levels that arc across time and price levels. It is important to understand these levels will present very real inflections in price – at least we expect them to create price inflections.
Currently, there is the YELLOW Fibonacci price arc that is acting as resistance near the current highs and the MAGENTA Fibonacci price arc that is much longer-term. This longer-term Fibonacci price arc may be stronger than the current shorter-term arc. Our researchers believe the current Fibonacci arc levels on this chart will prompt price to “flag out” in a sideways price channel before potentially breaking downward.
As we continue to watch for weakness across these charts and trends, we urge skilled technical traders to be prepared for a sharp spike in volatility over the next 4+ weeks. It appears we are only 2 to 4+ weeks away from reaching these major price inflection points. Currently, we believe a downside move is the most probable outcome based on our ADL predictive modeling system results as well as the technical patterns seen on these charts.
Overall, we believe the increased volatility levels in the US stock market will present some incredible trading opportunities for technical traders. Big swings, near-perfect technical patterns and setups, quick profits, and broader sector rotations. This is the type of market where skilled technical traders can really enjoy a target-rich environment. We just have to be selective in how we determine when to enter trades and to not take excessive risks.
I’m offering you the chance to learn to profit, as I do with my own money, from market trends that I hand-pick for my own trading. These are not wild, crazy trades – these are simple, effective, and slower types of trades that consistently build wealth. I issue about 4 to 8+ trades a month for my members and adjust trade allocation based on my proprietary allocation strategy– the objective is to gain profits while managing overall risks.
You don’t have to spend days or weeks trying to learn my system. You don’t have to try to learn to make these decisions on your own or follow the markets 24/7 – I do that for you. All you have to do is follow my research and trading signals and start benefiting from my research and trades. My new mobile app makes it simple – download the app, sign in and everything is delivered to your phone, tablet, or desktop.
I offer membership services for active traders, long-term investors, and wealth/asset managers. Each of these services is driven by my own experience and my proprietary trading systems and modeling systems. I have a small team of dedicated researchers and developers that do nothing but research and find trading signals for my members. Our objective is to help you protect and grow your wealth.
Please take a moment to visit www.TheTechnicalTraders.com to learn more. I can’t say it any better than this… I want to help you create success while helping you protect and preserve your wealth – it’s that simple.
Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com
Chuck Jaffe, the host of Money Life, is a veteran financial journalist and nationally syndicated financial columnist whose work appears in newspapers from coast to coast. Today he talks with Chris Vermeulen.
Chuck has been named to MutualFundWire’s list of the 40 Most Influential People in Fund Distribution and was the first journalist to make the list. Over the course of his career, he has won numerous awards for business and personal finance journalism.
Chris Vermeulen has been a technical analyst and trader since 1997, he has been through a few bull/bear market cycles in stocks and commodities. He has the pulse on the market and timing key turning points for investing and short-term swing traders. Chris states “2020 is going to be an incredible year for skilled traders. Don’t miss all the incredible moves and trade setups.”
If you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.
If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.
Ride Chris’ coattails as he navigates these financial markets and builds wealth while others struggle during the next financial crisis.
Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.
This massive bounce/rally, whatever you want to call it is playing out exactly as planned.
We locked in partial profits on our simple investing portfolio SPY ETF position and now entered another new position for much larger gains until it gets more exhausted. But don’t be fooled by this sucker’s rally. This is the beginning of the end as I showed the charts and explained here.
We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow out long term capital when things get ugly like they are now and ill show you how.
We just issued this trade alert to members of The Technical Investor newsletter which allows members to protect their wealth and assets while continuing to take advantage of opportunities generated by the US and global markets. This is the first trade alert issued in 2020 of this kind.
If you are an active investor or traders, have a retirement account of any type or have assets in the stock market, then we urge you to take action and sign up to get this investment trade signal.
Our focus is to help traders and investors protect and grow their wealth. We use proprietary price modeling tools that can’t be found anywhere else. Our combined 55+ years investing and active trading experience provides you with incredible insight and opportunity.
Passive investing is something for the “other guys”. If you want to grow your wealth, protect your assets, and learn to take advantage of the biggest price swings in the markets, then you need to follow our research and price modeling systems with us.
If you are concerned this may too be active for you, just know that we only buy the SP500 ETFs or move your money to cash where it is the most effective at times. If you can call your broker and tell them what to do with our alert instruction, or if you can place the trades yourself, then you can follow these investing signals.
Remember, bull market trades will last 5-12 years, bear market trades will last 1-3 years. No matter what, we can make money during both markets.
Each year we have 2-3 trade opportunities to add new capital to the market if you more money to add to your position.
Since 2007, Passive Investing would have returned only 53.75% ROI – only 4.48% annually. Active investing using our proprietary price modeling systems and deploying our proprietary position allocation modeling tools returned over 135% ROI – a 11.49% annually over the same time period. That’s a whopping 230% more annual return than simply letting your investments ride out the market fluctuations.
Allow us to take a minute to explain just how powerful this advantage really is to you.
Imagine you started with a $100,000 account and compared the difference between a passive investment style and TheTechnicalInvestor.com trading style over a span of 10 to 15 years. Most investors contribute to their retirement accounts over a 25+ year span of time – possibly longer. The difference between the two styles of investing is dramatically different in terms of the final results:
At the 5 year mark, the difference between the two styles is almost $48,000 in extra profits (over +38% more growth for your assets).
At the 10 year mark, the difference between the two styles is almost $140,000 in extra profits (over +91% more growth for your assets).
At the 15 year mark, the difference between the two styles is almost $318,000 in extra profits (over +164% more growth for your assets).
After the 15 year example (assuming your passive investment style maintained a 4.48% annual ROI and our active investment style maintained an 11.49% annual ROI), the results are stunning.
With passive investing, you would have nearly DOUBLED your assets and wealth.
With TheTechnicalInvestor.com active investing, you would have more than TRIPLED your assets and wealth.
When you add our proprietary “re-entry” triggering system, the numbers explode to +40% annual ROI with 1x leverage; 3512% with 2x leverage; 9417% with 3x leverage.
The difference is that we help you navigate the bigger price swings/trends in the market and actively help you manage your allocation in the markets using our proprietary price and position sizing technology.
What’s the cost for TheTechnicalInvestor.com? $249 per year or $149 every 6 months. Annually that breaks down to about $21 a month, which is $1 per trading day to know you are on the right side of the market.
Isn’t it time you took advantage of proprietary technology and services and started to create even more opportunities to grow your assets? The market volatility recently has created an incredible opportunity for everyone that has a retirement/401k account. Now is the time to focus on these big price swings because this is when opportunities are created to grow your wealth 3 to 5 times faster.
Visit www.TheTechnicalInvestor.com to learn more. Sign up today to learn what our newest trade alert action is all about and how you can start profiting from these huge price swings in the future. $21 a month is nothing when you really think about it. Join our other subscribers in learning to protect and grow your wealth with our technology today.
Chris Vermeulen
Chief Market Strategiest
Found of Technical Traders Ltd.
We find it interesting how researchers attempt to compare history, sometimes ancient history, to the applicable functions of today’s world and to attempt to translate the decline of empires in the past to what is happening in today’s world. Ray Dalio appears to be suggesting the rise of the Chinese economy and economic capabilities is going to threaten to unseat the US as a world super-power.
Within Ray Dalio’s article, he suggests the following which seems to sum up his cycle theory:
“In brief, after the creation of a new set of rules establishes the new world order, there is typically a peaceful and prosperous period. As people get used to this they increasingly bet on the prosperity continuing, and they increasingly borrow money to do that, which eventually leads to a bubble.
As the prosperity increases the wealth gap grows. Eventually the debt bubble bursts, which leads to the printing of money and credit and increased internal conflict, which leads to some sort of wealth redistribution revolution that can be peaceful or violent. Typically at that time late in the cycle the leading empire that won the last economic and geopolitical war is less powerful relative to rival powers that prospered during the prosperous period, and with the bad economic conditions and the disagreements between powers there is typically some kind of war. Out of these debt, economic, domestic, and world-order breakdowns that take the forms of revolutions and wars come new winners and losers. Then the winners get together to create the new domestic and world orders.”
Our own research team has completed quite a bit of research into cycles and super-cycles and, although we agree with Mr. Dalio that past Empires have collapsed and been replaced with more efficient and emerging soon to be a new world leader. Yet, in every instance in the past, the world has been transitioning from a rather disconnected economic structure where ancient empires, or rather the last gasps of ancient empires and wealth, have become threatened, gone to war, and declined.
WWI initiated with the assassination of Archduke Franz Ferdinand in Sarajevo on June 28, 1914. Nearly a month later, the great powers of Europe were aligned into two coalitions: the Triple Entente – consisting of France, Russia, and Britain – and the Triple Alliance of Germany, Austria-Hungary, and Italy. Thus, the lines were drawn between ancient European empires that led to the beginning of a new structure of world empires.
Throughout history, the biggest world empires are structured, grow into superpowers, and begin to decline. Most of these last well over 200 to 250+ years.
The Ottoman Empire started in the early 1300s and ended in the early 1600s because of a war with Persia – more than 300 years.
The Arab Empire, Mohammed, started in 632 and ended in 1258 – more than 600 years.
The Roman Empire began in 753 BC and ended in 23BC – over 700 years.
Chinese Qing Dynasty started in 1644 and ended in 1911 – over 250 years.
Chinese Ming Dynasty started in 1368 and ended in 1644 – almost 300 years.
America’s strength as a nation started to build in the late 1800s/early 1900s. Our rise to a world power came at a great expense in the 1930s and 1940s – fighting Hitler and the Japanese while saving most of Europe and SE Asia in the process. Then, we managed to rebuild most of these areas over a very short period of time.
Additionally, the idea that the current world would allow a nation like China to become a world-power – threatening world-order, capitalism, democracy, and current global geopolitical order seem alien to our researchers. There is one thing Mr. Dalio seems to ignore in his theories – the world has a choice in the matter – just like we did when Adolf Hitler threatened western Europe and with Hideki Tojo threatened the US and most of SE Asia. We have a choice in how we address the rise of China and how we protect our freedoms, rights, and futures from any threat China may present.
Currently, the world is moving away from a China-friendly relationship after the COVID-19 virus event has wreaked havoc across the globe. China’s rise over the past 25+ years has mostly been on the success of selling China as a cheap manufacturing center for the US and other stronger economies. The process of growing China has been to take advantage of the relationships they’ve built with foreign business/banking. This is all starting to come to a sudden halt which may put extreme pressures on China’s banking and credit systems over the next 20+ years.
Before we continue, be sure to opt-in to our free market trend signals
before closing this page, so you don’t miss our next special report!
Our research team put together this chart to highlight the past 100+ years of cycle/super-cycle trends. When you review this chart, pay attention to the deep collapse of the heavy blue line from 1923 through 1939 – the span of the Great Depression. We’ve highlighted the area of the Great Depression in BLUE. We’ve also highlighted recessions in RED and MAGENTA. Red areas being recessions in cycle areas where the cycles are trending lower and Magenta are where recessions happened in upward trending cycles. Near the end, we’ve highlighted an area in YELLOW where we believe a new recession will emerge.
Now, as we align these cycle trends with price, we start to see a bigger picture emerge. This SPY Weekly Log chart illustrates how our cycle analysis aligns with price trends quite well over the past 45+ years. Our cycle research goes forward over 600 years and we can identify where and when price trends will likely set up, breakdown, or breakout as a result of our extensive cycle research.
Mr. Dalio’s comments, while somewhat valid in general scope, don’t necessarily translate into real-world processes. With the amount of wealth and new global alliances, inter-connected economies and the recent push attempt to right the many wrongs of the past 30+ years, the world appears to be much more aligned towards restoring some proper order and developing a real future where nations are held accountable and central banks may be forced to adopt a more conservative capital process in the near future.
Without giving away too many details, our cycles are point to a very important cycle event that will take place in the near future. Many people are completely unaware of when and how this event will take place. In fact, many analysts are simply guessing as to what may happen over the next 20+ years whereas we’ve actually mapped out 500+ years of detailed price cycles for the global markets.
If you want to gain insight into the markets next big move or learn how our researchers attempt to stay ahead of the biggest market trends, then you owe it to yourself to visit www.TheTechnicalTraders.com to learn how we help our members create success and find great opportunities.
We can promise you one thing right now – the global markets are going to continue to be very interesting for technical traders over the next 10 to 20+ years. You don’t want to miss the opportunities that are setting up in the global markets and we strongly believe everything you are reading about cycles from others is superficial in structure and content.
As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders. Don’t miss all the incredible moves and trade setups.
I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.
If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.
Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.
Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.
Our Adaptive Dynamic Learning (ADL) predictive modeling system has called some incredible moves over the past 24+ months. It predicted the moves in Gold moving from $1340 to $1750 – including many of the trend changes that took place over the past 15+ months. It predicted the collapse in Crude Oil back in July 2019 – even calling for a sub-$20 price collapse in March/April 2020. Overall, the abilities of this unique predictive modeling tool have been nothing short of incredible.
For many weeks, we’ve been suggesting the US stock market has entered a no man’s land after the bottom setup near March 20, 2020. The US Fed and global central banks have stepped in to attempt to support the markets and to take pressures off financial institutions and consumers. These efforts presented a very real opportunity for technical traders to attempt to “ride the Fed wave” over the past 3+ weeks. Right now, things appear to be a bit more fragile going forward into the Summer months and the ADL predictive modeling system is showing us what to expect.
One of the most important benefits of the ADL predictive modeling system is to identify “consensus” predictions of price activity looking forward in time. Sometimes, the ADL system makes very bold predictions – like the Crude Oil predictions. Other times the ADL system makes rather mundane predictions. Today, the ADL system is suggesting the US major indexes (and stock market) is about 10% to 15% overvalued and will attempt to revert back to fair valuation levels.
This prediction suggests that a downside price move, or price reversion, is likely to set up over the next few weeks where price level may fall to near (or below) the predicted ADL levels. When price reverts like this to a valuation level, it can sometimes move beyond the predicted price level before settling closer to the predicted ADL level. Price can also set up an “anomaly” pattern where it avoids the ADL predictive levels for a period of time, then aggressively reverts back to levels near the ADL predicted price levels. These anomalies can be really great trades for technical traders.
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WEEKLY S&P500 E-MINI FUTURES ADL CHART
This weekly ES (S&P500 E-Mini Futures) ADL chart suggests a downside price reversion totaling more than 14% is very likely over the next 3+ weeks. Should the downside reversion extend below the CYAN predicted ADL levels, this move could result in a 20% or more downside price collapse.
Notice how the ADL predictive price levels flatten out over the next 8+ weeks. This suggests volatility may increase as price attempts to form a sideways FLAG or other extended patterns.
WEEKLY DOW JONES INDUSTRIAL ADL CHART
This Weekly INDU chart shows a similar ADL price prediction – an 11% to 13% downside price move followed by moderate downside price weakness over the next 8+ weeks. Pay very close attention to the 21,000 level which appears to be lower support based on the ADL predictions. We believe any downside move in the INDU could attempt to breach the 21,000 level as it attempts to find and establish future support.
WEEKLY SPDR S&P500 ETF (SPY) ADL CHART
Lastly, this Weekly SPY ADL chart suggests a 13% to 15% downside price move is setting up which also suggests price may move beyond the lower ADL predictive ranges over the next 3+ weeks. If this happens, the SPY may collapse toward levels near $240~$245 (or lower) before finding any real support and moving back towards the ADL predictive price levels.
If you’ve been following our research and articles, you already know we’ve been warning about a “double-dip” move in the stock market and have also been advising readers to stay prepared for the incredible swings that are about to happen in the markets in 2020 and 2021. Our research team issued a Black Swan warning on February 21, 2020 – just days before the start of a collapse in the US stock market. We’d been warning about the setup and potential for this Black Swan event for nearly 5+ weeks before it happened.
This current ADL predictive modeling research suggests the US stock market will likely stall through the Memorial holiday weekend and begin next week with a measurable downside price bias – starting the move towards the lower ADL predicted levels. Now is the time to prepare for this move if you are long and holding any “at-risk” trades.
It is very likely, based on this research, that a downside price move to levels just above recent lows will take place over the next 5+ weeks. This will set up many great trading opportunities for skilled technical traders.
As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders. Don’t miss all the incredible moves and trade setups.
I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.
If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.
Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.
Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.
Bill Powers of MiningStockEducation.com talks with a professional trader and market commentator Chris Vermeulen says gold stocks are overbought and need a breather which would be good for the overall upward trend.
Chris shares how he has and is trading the junior gold sector. He called the recent February 24th top in the gold stocks before the March crash. And now he is warning to a top in some gold-stock positions during an expected pullback.
Chris also addresses whether a lot of the gap-up’s in many gold stocks must be filled before they can run higher. This interview is full of advice from an experienced trader in the gold sector.
0:15 Introduction
1:25 Do these gap-up’s in the charts of many gold stocks need to be filled before they can go higher?
3:14 Liquid companies more likely to get their gap-up’s filled?
5:23 Chris called the Feb 24th high in the junior gold stocks
7:32 How do you time your entry into and exit out of tiny gold juniors? 11:03 What type of pullback in gold stocks should we expect?
12:37 How Chris approaches riskier trades
15:10 Navigating trading the futures market
16:22 How are you trading oil?
18:38 Extreme volatility leads you into cash?
20:00 CAD to trend lower against the USD?
21:12 Do you close your trades before a long weekend?
22:41 What makes your trading service unique?
As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is an incredible year for traders and investors. Don’t miss all the incredible trends and trade setups.
Subscribers of my Active ETF Swing Trading Newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. This week we closed out SPY ETF trade taking advantage of this bounce and entered a new trade with our account is at another all-time high value.
Ride my coattails as I navigate these financial markets and build wealth while others watch most of their retirement funds drop 35-65% during the next financial crisis.
Just think of this for a minute. While most of us have active trading accounts, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during the next bear market, you could lose 25-50% or more of your net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.
If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Passive Long-Term ETF Investing Signals which we issued a new signal for subscribers.
Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.