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Are We Setting Up For A Waterfall Selloff?

Most traders understand what a “Waterfall event” is if you’ve been trading for more than 3 years.  Nearly every downside price reversion event initiates in a breakdown event (the first tier of the waterfall event) which is followed by additional deeper waterfall price collapses.  Almost like price breaks lower, finds support, settles near support, then breaks lower targeting deeper price support levels.

SPY DAILY CHART

This example SPY chart from October 2018 through December 2018 highlights this type of event almost perfectly.  With each tier in the waterfall event, price searches for new support levels as price weakness drives price lower throughout each breakdown event.  We’ve highlighted these breakdown events with the MAGENTA lines drawn on this chart.

The recent downside price rotation after the world was alerted to the Wuhan virus presented a very clear “first-tier” waterfall event.  This first move lower is often rather condensed in size and scope – yet often within days of this first event, a bigger second downside waterfall event takes place confirming the bearish breakdown has momentum.  We believe this first move lower could be the first real tier in a broader global market waterfall event which may result in a much deeper price reversion event.

We believe the total scope of the Wuhan virus will not be known for at least another 20 to 30+ days.  After that span of time, we’ll know where and how aggressive this pandemic event has spread and what real capabilities we have for containment.  Therefore, we believe the downside price concern within the global markets is very real and just starting.

Very much like what happened in October 2018, the initial downside price move initiated on the US fed news and expectations.  When the Fed announced a rate cut, which shocked the markets, investors waited to see how the markets would react and within only 5+ days, the markets reacted violently to the downside.

Friday, January 24 was the “trigger date” for the breakdown in global markets from the news of the Wuhan virus.  We believe any further downside risk to the global markets will be known within another 5 to 10+ trading days – as more information related to the spread and containment capabilities of the virus are known.  Therefore, we are attempting to alert our followers and friend to the very real potential of a price breakdown event, a “Waterfall Event”, that may be set up in the global markets.

DAILY TRANSPORTATION INDEX CHART

This Daily TRAN chart highlights the recent breakdown in price that could be considered the first tier of the waterfall event.  The support level, highlighted in LIGHT BLUE, suggests price may attempt to stall near 10,800 before any further price breakdown happens.  A second waterfall tier could push the price well below the 10,000 level as the next real support exists near 9,9250.

DAILY 400 MIDCAP INDEX CHART

This Daily MC (S&P 400 MidCap) futures chart highlights a similar price pattern.  The initial breakdown tier is very clearly illustrated where the price fell to immediate support near 2050.  We believe any further waterfall tier even may push the price below the 2000 level and target real support near 1952.

DAILY FINANCIAL SECTOR INDEX CHART

This XLF (Financial Sector SPDR ETF) Daily chart, again, highlights the first tier breakdown in the price of the potential Waterfall event.  This is actually one of the clearest examples of how price operates within this type of rotation.  The initial downside tier broke through support near $30.00 and has begun to rally back above this level.  The LIGHT BLUE highlighted support range shows us where the first tier may stall.  Any further breakdown in price may push the price below the $28.50 level as price searches for new support.

We’ve referenced the 1855 “Third Plague Event” that hit in China and quickly spread to India, SE Asia, and other neighboring countries as an example of what may happen with the Wuhan virus.  The 1855 event killed over 15 million people (nearly 1.25% of the total global population at the time) and lasted until 1960 when the Plague cases dropped below 200.

We urge all traders and investors to prepare for a broader downside market event in the future – possibly a “waterfall event”. We’ll know more about the size and scope of this potential pandemic within 30+ days – but this may become a much bigger issue across the globe very quickly.  The volatility this event may create in the global markets is an ideal setup for skilled technical traders.  In the last week, we locked in profits on two trades SSO for 6.5% and TLT for 3%. Learn how we can help you find and execute great trades related to this wildly volatile event.

Join my ETF Trade Alert Newsletter – Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site to learn how to take advantage of our members-only research and trading signals.

The Platinum Breakout & Bull Market of 2020

Platinum has setup into a longer-term FLAG formation and has recently broken the APEX of this FLAG.  The long term potential for Platinum, in conjunction with the advance in Rhodium, Palladium, Gold, and Silver, is a new Bullish Price Trend.

Our researchers believe Platinum must move above $1200 for this new Bullish trend to anchor a “Breakout Base” formation.  The current investment environment suggests a new metals rally is setting up.  Fear is starting to take hold of the markets and industrial and manufacturing demands are still driving prices and supply demands higher and higher.  As investors pile into the metals as a form of safety, we expect Platinum to rally above $1200 within the next 4 to 6+ months and begin a much broader rally to levels above $1600 overtime.

Demand for Platinum has increased because of two main reasons:

1) Rapid increase in consumption in SE Asia
2) Increase in acceptance of fuel cells.

As we learn more about the industrial and manufacturing demands for Platinum. It becomes evident that a new upside bias in trend may just be getting started.

Traders need to understand and consider the opportunities presented by this incredible longer-term setup in Platinum.   Could platinum DOUBLE in price within 12 months?  Could it TRIPLE?

Follow our research to stay ahead of this incredible opportunity for skilled technical traders and learn how we can help you find great trades.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

Join my Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site to learn how to take advantage of our members-only research and trading signals.

The Black Swan Event Begins

As the Asian markets opened on late Sunday, traders expected a reactionary price move related to the threat of the Wuhan virus and the continued news of its spread.  The US Dow Jones futures markets opened close to -225 points lower on Sunday afternoon and were nearly -300 points lower within the first 25 minutes of trading.  Gold opened $10 higher and continued to rally to a level above $15 higher.

If this is early price activity, or a reactionary price move, related to fear of what may come, then the warnings signs are very clear that global traders and investors believe this virus outbreak may very well turn into a major Black Swan event.

Our research team believes a 5% to 8% rotation should be considered a normal reversion range where price may find immediate support and attempt to rally from these support levels.  Anything beyond 10% may set up a much bigger price reversion event, something akin to a Black Swan event.  Therefore, we are advising our friends and followers to take the necessary steps to protect your wealth and assets as this move continued to extend.

30-MINUTE YM FUTURES CHART

This 30-minute YM futures chart highlights the reactionary downside price move (GAP) taking place on the open of the Asian markets.  This GAP lower may be just the beginning of a much broader downside price move.  We are going to have to wait and see what happens related to the Wuhan virus over the next 14+ days.

30-MINUTE GOLD FUTURES CHART

Gold shot up nearly 1% in early trading on Sunday.  Fear is driving investors to pile into the precious metals markets.  As news of this virus continues to hit the news cycle, we expect metals will continue to push higher and higher – likely targeting the $1750 level in Gold.

If you want to see what the big money players own check out these gold charts and a very different interpretation of the gold COT Data here.

If you have not been following our research and if you have not already positioned your portfolio for this potential reversion event, then now would be a good time to start taking action.  Do some research on the 1855 Third Plague Event in China where more than 15 million people died (nearly 1.25% of the total global population at the time).  If those levels hold for this event, then possibly 60 to 80 million people may die over related to this event.

Oil is collapsing again and just his out downside target of $53. Our energy sector trade idea is up over 15% already.

Remember, all of this is speculation at this point.  Yet we urge traders to act now to take action to prevent further erosion of their wealth and retirement accounts.  Visit Technical Traders Ltd. to learn how we can help you plan for these events, protect your wealth, and find great trades.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

Join my Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site to learn how to take advantage of our members-only research and trading signals.

The Wuhan Wipeout – Could It Happen?

News is traveling fast about the Corona Virus that originated in Wuhan, China.  2744 cases and 80 deaths confirmed globally according to Bloomberg and the National Health Commission.

In most of Asia, the Chinese New Year is already in full swing.  Hong Kong, China, Singapore, Malaysia, India and a host of other countries are already starting to celebrate the 7 to 10 day long New Year.  Millions of people have already traveled hundreds of thousands of miles to visit family throughout this massive celebration.  We are certain that hundreds or thousands have traveled to all parts of the world by now.  The potential for exponential growth in the threat from this virus could be just days or weeks away.

Far too many people are too young to have any knowledge of the 1855 Third Plague Pandemic that originated in China.  This outbreak quickly spread to India and Hong Kong and claimed 15 million victims.  It lasted until the 1960s when active cases of the Plague dropped below a couple hundred.

If we consider the broader scope of this issue, we have to take into consideration the results it may have on the broader global economy, commodities and consumer activity as skilled traders.

The world is much bigger than it was in 1855.  We have more technology, more capability and faster response capabilities related to this potential pandemic.  Yet, we also have a much greater heightened inter-connected global economy, currency, and commodity markets.  What happened in China can, and may, result in some crisis events throughout the planet.  It is not the same world as it was in 1855. (Source: history.com)

It is far too early to speculate on any future economic outcomes related to this potential outbreak, but it is fairly certain that China, most of Asia, India and potentially Africa could see extensive economic damage related to a contraction in consumer and industrial economic demand as a consequence of this outbreak.  Once the Chinese New Year ends, in about 10 to 15+ days, people will return back to their home cities and we’ll begin to understand the total scope of this problem.  If the problem continues to be isolated in China, Asia and within that general region, then we may see economic consequences isolated to these regions.  If not, then we could see a much bigger and broader global economic consequence setting up.

The 1855 Plague Pandemic lasted for nearly 100 years and wiped out 1.25% of the total global population.  This was at a time when there was limited transportation options and global economics was a much smaller component of the total global economy.  Everything is somewhat isolated at that time. In today’s world, a similar type of event could wipe our 1% to 5% of the total global population before we have any means to attempt to control it.

Bill Gates believes this outbreak could kill more than 30 million people within 6 months (Source: businessinsider.com)

It is time to get real about this and prepare for how the global markets will interpret this potential outbreak.

We’ve been warning that the market was “Rallying To A Peak” recently and believe this outbreak has changed the minds of traders.  This could the catalyst that breaks the bullish trend for quite a while.  Skilled traders will be trying to get ahead of this rotation in the markets and attempt to deleverage risk.  As retail traders, we should be doing the same thing – deleveraging risk, buying metals, trimming open long positions and hedging into inverted ETFs.

DAILY ES CHART

This Daily ES chart highlights a very real support level near 3050 that also aligns with the longer-term Moving Average.  A downside move like this would represent a -10 to -11% downside price reversion and take us back to December 2019 price levels.  It could happen very quickly.

TRANSPORTATION INDEX CHART

This Transportation Index chart highlights a potential downside price reversion of -11% to -12% – targeting the 9,750 level.  We’ve recently authored an article about the weakness in the Transportation Index and how we believe it could be setting up for a downward price move.  If a breakdown move like this happens in TRAN, it would suggest a massive contraction in the global economy is taking place.

DOW JONES (YM) DAILY CHART

This last YM chart highlights support near 28,000 which would be an immediate downside target if the Dow Jones Industrials revert lower.  And, again, this would put us back to December 2019 price levels.  If this 28,000 level is broken, then we start looking at levels closer to 26,000 (roughly -20%).

CONCLUDING THOUGHTS:

Right now, consider this situation as you are a captain of a ship sailing into a storm.  You can either prepare for it and navigate through it to the best of your ability or ignore the warnings and hope for the best.  It is far too early to panic at this point, but a certain degree of “preparation” is certainly in order.

We’ll know more in about 7+ days as we learn how far and how wide this problem has actually extended.  In the meantime, watch your investments.  Protect your assets.  Prepare for the storm.  Best case, you can always reposition your capital for clearer skies in a few weeks.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

Join my Wealth Building Newsletter if you want winning ETF swing trade alerts every month? Then ride my coattails as I make money while others will struggle and lose money as the markets correct and become more volatile.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site (www.thetechnicaltraders.com) to learn how to take advantage of our members-only research and trading signals.

Junior Gold Miners Setting Up For Another Rally

Our recent research suggests the US stock market may be entering a period of volatility that may include a broad market rotation/reversion event.  We believe this volatility event could begin to happen anytime over the next 10 to 30+ days.  The rally in the US stock market ending 2019 and carrying into 2020 appears to be setting up a “rally to a peak” type of price pattern. Please take a minute to review the following articles we’ve posted recently about this topic and how it relates to opportunities in Metals/Miners.

January 20, 2020: Q4 EARNINGS SETUP THE RALLY TO THE PEAK

January 15, 2020: SHIFTING UNDERCURRENTS IN THE US STOCK MARKET

The potential for a volatility spike resulting from a price peak formation (see the January 20, 2020 article above), could setup a moderately broad downside price reversion event that may prompt a 5% to 8%+ downside price correction.  If that happens, as we expect, over the next 5 to 10+ trading days, then precious metals and miners should explode to the upside as a “risk-on” trade moves capital into the metals market.

We believe the Miners (both Gold and Silver) are setting up for an explosive upside price move over the next 60+ days.  The reality of the global markets is that it appears to be setting up in a very similar manner to what happened in the late 1990s.  The rally in Rhodium, Palladium and Platinum are similar to the rally that took place in the late 1990s – just before the real explosion in Gold and Silver began in 2003-04.  The rally in Gold and Silver took place after a collapse event in 2000-2001 and setup a massive upside price event for Precious Metals and Miners.  You can read more of our research below.

January 16, 2020: PLATINUM BREAKS $1000 ON BIG RALLY AND WHAT IS NEXT

December 30, 2019: METALS & MINERS PREPARE FOR AN EARLY 2020 LIFTOFF

GDXJ 10 MINUTE CHART (1 MONTH DATA VIEW)

If we start with the shortest time frame analysis of the gold miners you can see a lot of measured moves based on technical analysis that has taken place in the last month of trading and it’s not far from over based on this chart.

DAILY GDXJ CHART

The setup in GDXJ is that Junior Gold Miners should move 15% to 25% higher over the next 30+ days on a price reversion event in the US stock market.  We believe the upside target for GDXJ is $46 to $51 from the current levels near $41.50.  After a brief pause near $50, GDXJ should attempt another rally to levels above $65 to $70 sometime near June~August 2020.

WEEKLY GDXJ CHART

This Weekly GDXJ chart highlights what we believe will happen over the next 6+ months.  The opportunity for skilled traders at this level is incredible.  Support near $35.50 has recently been retested and held.  Any entry below the $40 level is an incredible opportunity to catch this upside price move.

CONCLUDING THOUGHTS:

We believe the US stock market will enter a period of volatility over the next 30~60+ days and that volatility will push metals and miners higher into this next wave of advancement.  Be prepared for Silver and Silver Miners to rally more than Gold/Gold Miners (potentially).  We’ve highlighted how Silver tends to rally a few months behind Gold when a Risk-On trade sets up.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

2020 is going to be full of incredible trading opportunities for skilled traders.  We’ve already set up a number of active trading triggers for our members to profit from the early moves in 2020.  This Gold Miners trade is an incredible opportunity for anyone skilled enough to take advantage of it. Visit Technical Traders Ltd. to learn how we can help you find and execute better trades in 2020.

Join my Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

Energy Continues Basing Setup – Breakout Expected Near January 24th

After watching Crude Oil fall from the $65 ppb level to the $58 ppb level (-10.7%) over the past few weeks, we still believe the energy sector is setting up for another great trade for skilled investors/traders.

We are all keenly aware that Winter is still here and that heating oil demands may continue to push certain energy prices higher.  Yet Winter is also a time when people don’t travel as much and, overall, energy prices tend to weaken throughout Winter.

Over the past 37 years, the historical monthly breakdown for Crude Oil is as follows:
December: Generally lower by -$0.33 to -$0.86.  Averages to the downside: -3.65 to +3.08
January: Generally lower by -$4.57 to -$6.72.  Averages to the downside: -2.68 to +2.27
February: Generally higher by +$8.41 to +13.73.  Averages to the upside +3.07 to -2.54
March: Generally higher by +7.33 to +$15.62.  Averages to the upside by +2.84 to -2.14

Over the past 25 years, the historical monthly breakdown for Natural Gas is as follows:
December: Generally lower by -$2.34 to -$5.26.  Averages to the downside: -0.81 to +0.69
January: Generally lower by -$5.14 to -$7.97.  Averages to the downside: -0.69 to +0.45
February: Generally lower by -$1.48 to -$3.62.  Averages to the downside -0.50 to +0.49
March: Generally higher by +0.63 to +$1.88.  Averages to the upside by +0.41 to -0.70

Over the past 35 years, the historical monthly breakdown for Heating Oil is as follows:
December: Generally lower by -$0.16 to -$0.37.  Averages to the downside: -0.14 to +0.09
January: Generally lower by -$0.52 to -$0.96.  Averages to the downside: -0.09 to +0.10
February: Generally higher by +$0.48 to +$1.06.  Averages to the upside +0.11 to -0.08
March: Generally higher by +0.03 to +$0.11.  Averages to the upside by +0.09 to -0.10

This data suggests an extended Winter in the US may prompt further contraction in certain segments of the energy sector that may prompt an exaggerated downside price move in Crude Oil and Natural Gas.  Heating Oil may rise a bit if the cold weather continues well past March/April 2019.

Conversely, if an early spring sets up in the US, then Crude Oil may begin to base a bit as people begin to traveling more, but Heating Oil and Natural Gas may decline as cold weather demands abate.

Heating Oil has almost mirrored Crude Oil in price action recently.  Our modeling systems are suggesting that Crude Oil may attempt to move below $40 ppb.  This move would be a result of a number of factors – mostly slowing global demand and a shift to electric vehicles.  We authored this research post early in January 2020 – please review it.

January 8, 2020: IS THE ENERGY SECTOR SETTING UP ANOTHER GREAT ENTRY?

We believe any price level below $40 in ERY is setting up for a very strong basing level going forward.  We have identified two “pullback zones”.  The first is what we call the “Deep Pullback Zone”.  The second is what we call the “Deeper Pullback Zone”.  Any upside price move from below $40 to recent upside target levels (above $50) would represent a 25%+ price rotation.

Historically, February is a very strong month for ERY.  The data going back over the past 12 years suggests February produces substantially higher upside price gains (+1899.30 to -394.28) – translating into a 4.8:1 upside price ratio over 12 years.  Both January and March reflect overall price weakness in ERY over the past 12 years.  Thus, the real opportunity is the setup of the “February price advance”.

We believe any opportunity to take advantage of this historical technical price pattern is advantageous for skilled traders/investors.

This is a pure technical pattern based on price bar data mining.  This is something you may not have ever considered unless you had the tools to search for historical price anomalies and rotation patterns.  We have created a suite of tools and price modeling systems we use to help our members find incredible opportunities – this being one of them.

Get ready, February will likely prompt a very nice rally in ERY if historical price triggers confirm future price activity.  The price pattern in February suggests a large upside price move is likely in ERY and we believe these low price basing patterns are an excellent opportunity for skilled traders.

Join my Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site to learn how to take advantage of our members-only research and trading signals.

Shifting Undercurrents In The US Stock Market

Even as we write this post, the US Stock Market continues to push higher as global traders and investors pour capital into the continued US rally.  The strong US Dollar continued to attract capital from around the globe and with fresh earning about to hit from Q4 2019, investors are expecting another round of solid income and earnings growth.

Yet, underlying all of this is the undercurrent of shifting capital into safe-havens like precious metals, Cryptos, and under-valued foreign markets.  This shift started to happen late in Q4 2019 and accelerated early in 2019.

HYG – HIGH YIELD CORPORATE BONDS DAILY CHART

One of our favorite measures of extreme bullishness is the scope of capital/trend pouring into High Yield Corporate Bonds.  This chart below highlights the scale of the rallies that take place before a price reversion event.  You’ll notice that each rally in HYG is nearly identical in size – and that each rally is followed by a fairly deep price reversion event.

The likelihood of some surprise earnings collapse from Q4 2019 is somewhat muted.  Other than the retail sector reporting some missed earnings expectations related to Christmas 2019, generally most market sectors should report earnings and growth near an average 2% to 3% growth expectation annually.

Still, with Rhodium, Platinum and Palladium rallying extensively and Gold and Silver recently setting up an upside breakout pattern (see our recent Gold and Silver research), we believe undercurrents are already at play in the markets where skilled traders are preparing for a price reversion event – attempting to mitigate risk.

Over the past 20 years, the DOW JONES INDUSTRIAL has been positive in January by a ratio of 1.2:1.  In other words, the odds of a positive January for the DOW is near 60%.  The average upside price advance in January for the DOW is a little over 600 points.  As of right now, the DOW has advanced a bit over 525 points since the end of 2019.  We believe the undercurrent trends may result in a moderate price reversion event if our analysis is correct.

We’ll wait to see what happens with earnings data and other news, yet our proprietary technical price modeling systems are suggesting a reversion/rotation event should happen fairly early in 2020.

Join my Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site (www.thetechnicaltraders.com) to learn how to take advantage of our members-only research and trading signals.

Silver Traders Big Trend Analysis – Part 2

This, the second part of our Silver research article suggesting Silver may be forming a massive price base in preparation for an explosive upside move, will continue from Part I of this research series.

Our research team believes Silver is setting up in a price pattern that may already be “ripe” for an explosive upside move.  Our researchers have poured over the data and believe the disparity between Gold and Silver is already at excessive levels.

Historically, anytime the disparity between Gold prices and Silver prices (rationalized into comparative Gold price levels) breaches 30% to 60% and Gold begins an upside price advance, Silver typically begins to move higher with 4 to 8+ months.  This setup pushes the Gold to Silver ratio back below 50 or 60 as Silver rallies substantially higher, and faster than the price of Gold.

Comparatively, Silver continues to trade within a sideways price range after basing in early 2016.  This price range has been fairly consistent between $14.50 and $21.0.  With Gold recently starting to move higher because of the US/Iran military conflict, this raises an early warning flag for our research team because Silver has continued to trade below $18 – and well below recent highs near $20.

The price disparity between Gold and Silver is currently greater than 200% based on our proprietary modeling system.  Remember, anytime this disparity level is greater than 30% to 60% and Gold breaks out in a rally, Silver will break to the upside within just a few months.

The second stage rally in Silver, the real money-maker, will come when investors pile into Silver and Silver Miners as the breakout in Silver becomes explosive.  The time to get into this trade is/was now or 4 months ago.  Still, there is plenty of opportunity for skilled traders right now because the breakout move in Silver and Silver Miners has not really begun yet.

The first big upside move in Silver and Miners will be to attempt to move higher and target recent resistance.  Resistance in Silver is currently near $19.70 and $21.00.  This means any move above $19.75 (or higher) where the price of Silver fails to move above $22 or $23 would constitute a “Stage 1 Base Advancement”.

After this move is complete, a “Breakout Stage” price move will take place.  This may be where Silver prices advance from the $21 to $23 level up towards the $28 to $32 price level.  This upside price advance breaches the Stage 1 resistance and attempts to establish new support for a continued Stage 2 advance.

Remember, the current disparity level is just over 200% between Gold and Silver.  If Gold continues to rally higher and Silver attempts to break higher, attempting to narrow the disparity level, then Silver will (at some point) enter a near parabolic upside price move above $36 to $40.  Our researchers believe this may happen before June or July 2020.

This incredible opportunity is currently setting up for skilled traders.  Believe it or not, while Silver continues to trade below $18 per ounce and global investors are focusing on US stocks, Emerging Markets, and Gold, Palladium and others, this setup in Silver may become the biggest investment opportunity of 2020.  Sure, Gold may rally 80% to 140% over the next 12 to 24 months.  Palladium may rally even higher.  If Silver does what we expect it to do once this setup/trigger really breaks open, Silver could rally 500%+ over 12 to 24+ months on an incredible upside disparity reversion move.

This last chart highlights why we believe this setup in Silver should not be ignored.  In 2005, the rally in Silver as a result of this Disparity trigger resulted in Silver reaching a 38% higher peak than Gold.  In 2009, the same Disparity trigger prompted Silver to rally to levels nearly 300% higher than the peak in Gold prices.  If Gold rallies to levels above $2800 to $3100, which is our expectation, and this Disparity trigger prompts an upside move in Silver, we believe Silver could rally to levels 200% to 400% (or more) higher than Gold prices.  By our estimates, that would put Silver prices above $90 to $95 per ounce – possibly much higher.

Take advantage of any opportunity you have to position your portfolio for this setup and be patient.  The upside breakout in Silver happens like a train leaving the station.  Slow and steady at first, then building momentum, then finally running at top speed.  Each time this Disparity trigger sets up and executes, Silver starts a moderate move higher at first, then explodes to the upside as Gold continues to rally higher.  That last explosive move is why Silver reaches peaks that are substantially higher (in percentage terms) than the peaks in Gold.

Please pay attention to our research team’s efforts to help you create greater success and find great trades.  Take a minute to visit Technical Traders Ltd. to learn how we can assist you in 2020 and help you build wealth, attain greater success and stay ahead of these bigger market moves.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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.

Join my Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation, or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site (www.thetechnicaltraders.com) to learn how to take advantage of our members-only research and trading signals.

My Big Trend Analysis For Silver Investor – Part 1

Everyone seems to be focused on Gold recently and seems to be ignoring the real upside potential in Silver.  With all the global economic issues, military tensions, geopolitical issues, and other items continually pushed into the news cycles, it is easy to understand why traders and investors may be ignoring Silver.

Silver has really not started to move like the other precious metals.  Gold is up over 45% since 2016.  Palladium is up over 350% since 2016.  Silver is up only 29% since 2016.  The Gold to Silver ratio is currently at 86.7 – very near to the highest level on record going back over 25 years.

Historically, Silver rallies 6 to 12+ months after Gold begins a price rally.  The big break in the Gold to Silver ratio comes at a time when Gold rallies by more than 30% to 60% faster than the price of Silver.  In other words, when a major disparity sets up in the price of Gold compared to the price of Silver, then Silver explodes higher – which results in a drop in the Gold to Silver ratio.

Currently, the relative price of Gold to Silver is over 200%.  Considering this fact and considering the under-performance of Silver recently, our researchers believe Silver is setting up a massive basing pattern in preparation for an explosive upside move.

Our research team put together this chart to help illustrate the real upside potential in Silver.  This Monthly chart highlights the Gold to the Silver ratio (Darker BLUE), the price of Gold (Gold) and the price of Silver (light BLUE) over the past 20 years.

Every time Gold broke a sideways Flag formation and began to rally substantially higher, Silver followed Gold higher 5 to 12 months after with an incredible upside price rally.  In 2005, Silver rallied over 100%.  In 2009, Silver rallied almost 400%.  Now, in 2020, could Silver rally 100%, 200%, 300% or more?

In the recent past, we’ve authored numerous articles about Gold, Silver and precious metals highlighting our expectations going forward.  Our incredible research from October 8, 2018, floored many institutional traders and researchers because we were able to accurately predict the future price moves in Gold 9+ months into the future.  Take a little time to read some of our earlier research posts

Metals & Miners Prepare for 2020 Liftoff – https://www.thetechnicaltraders.com/metals-miners-prepare-for-an-early-2020-liftoff/

ADL Trading System Confirms Gold Targets – https://www.thetechnicaltraders.com/adl-gold-prediction-confirms-targets/

VIX Is Set to Spike And What It Means for Gold – https://www.thetechnicaltraders.com/metals-vix-are-set-to-launch-dramatically-higher/

We believe the current setup in Gold and Silver is almost identical to previous setups where Gold rallied on economic or global concerns, prompting a massive disparity ratio between Gold and Silver.  We believe Silver is setting up in a massive basing pattern that may be an incredible opportunity for skilled traders.

In Part II of this research post, we’ll highlight why we believe all skilled traders and investors should be paying very close attention to the metals markets, Miners and, in particular, Silver.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, 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 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 and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com