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Commitment Of Traders (COT) Data Suggests Gold In Rally Mode

Many people believe the price of Gold will need to fall to support Institutional short positions.  We don’t believe this is the case.  The Commitment Of Traders (COT) Data suggests Commercial Hedgers have a large and growing shot position that is a very positive sign for a continued rally in Gold and Miners looking forward months from now.

Don’t think about COT data like everyone else with it comes to gold.

Over the past 20+ years, every time the COT Commercial Hedgers position in Gold falls, weakens substantially, or makes new multi-year lows the price of gold rallies.

WHY RECORD COMMERCIAL SHORT HEDGE POSITION IS BULLISH

It is my belief that the markets will move in favor of where the big money (commercial/institutions) want it to go in most cases. so if the commercial’s keep adding a short hedge position that means they are adding to heir long exposure and need to add more of a hedge to help protect their growing LONG position.

The weakening COT data from 2001 through 2012 is a perfect example.  As Commercial Hedgers moved away from Gold, the price of gold rallied to the all-time highs.

Additionally, after the major bottom in Gold in 2016, Commercial traders would have bought and accumulated gold driving the price higher.

Now, in late 2018 and throughout all of 2019, the Commercial Hedger COT position in Gold has fallen to the lowest level in the past 20+ years. This suggests the rally in Gold has really just begun to accelerate to the upside and there are more people buying gold than ever before who are buying protection (hedging)

The COT data I find very deceiving because it’s displayed and delayed in a way that makes traders and investors think the opposite.

Wall Street is in the business of making a market, and that means they play a game of deception so you do the opposite of what they are doing. Wall Street show As you watch gold moving with your new view on the COT data, you will notice gold will rally and post strong moves, then a couple of weeks later the COT data comes out.

With all that said, this is just my view and opinion of how I read the COT data for gold specifically. As with every chart and trader, there are many different ways things can be analyzed and viewed.

Since the price just had a strong advance, and you now see the commercials have added to their short position you naturally expect a pullback after a price rally especially when you see the big players adding to their short/hedge position. But what really just happened? the big players bought gold, and they had to hedge some of their new position. Very bullish in my opinion. While I do not use it for trading, it is a good confirming indicator of a trend.

Our research team, as well as our proprietary price modeling systems, suggested that Gold may rally to levels above $3700 before reaching an ultimate peak.  Currently, our predictive modeling systems are suggesting the next target is well above $1600 and we believe our original target from our October 2018 analysis, of $1700 to $1750, is still very valid.

We believe this current upside price rally in Gold will attempt to clear the previous high levels near $1924 – from September 2011.  We believe moderate resistance/rotation near $1700 to $1750 will be the last level of price resistance before a continued rally will push Gold prices above the $1924 peak – possibly stalling just below $2100.  Once price breaches the previous high level, we expect a short period of price rotation before another upside price acceleration takes Gold prices above $2400 to $2500.

Gold Miners are poised for an incredible upside price rally if our analysis of Gold is accurate.  GDXJ is currently trading near $42 – showing moderate weakness while Gold has seen some strength this week.  We believe Miners will do very well once Gold really breaks out above $1750 and begins to target the previous all-time high level.

Much like our expectations for Gold, we believe GDXJ will rally to levels near $60 once this current overbought condition wears off. Then we expect it to head towards $60 and rotate lower for a few weeks before attempting to rally further to levels above $70+.

Take a minute to review some of our recent Gold research posts to gain further insight

January 2, 2020: ADL GOLD PREDICTION CONFIRMS TARGETS

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

December 4, 2019: 7 YEAR CYCLES CAN BE POWERFUL AND GOLD JUST STARTED ONE

You won’t want to miss this incredible run in Precious Metals and Miners.  Follow our research.  Learn how we can help you find and execute better trades.  We’ve been warning all of our followers of this move for months – now it is about to get very real. In fact, we are giving away free silver and gold bullion bars to all new subscribers of our trading newsletter!

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

Is The Energy Sector Setting Up Another Great Entry?

Another wild week for oil traders with missiles flying and huge overnight price swings in crude. As we recently pointed out within our current Oil research article, Oil and the Energy sector may be setting up for another great trade.  We recently commented on how the supply/demand situation for oil has changed over the past 20+ years.

With US oil production near highs and a shift taking place toward electric and hybrid vehicles, the US and global demand for oil has fallen in recent years.  By our estimates, the two biggest factors keeping oil prices below $75 ppb are the shift by consumers across the globe to move towards more energy-efficient vehicles and the massive new supply capabilities within the US.

Our researchers believe the downside price rotation in Crude Oil early this week, after the US missile attack in Iraq, suggests that global traders are just not as fearful of a disruption in oil supply as a result of any new military actions in Iraq, Iraq or anywhere near the Middle East.  If there was any real concern, then the price of Crude Oil would have spiked recently.

We talk more about what we expect with oil both the bullish and bearish outlooks in this recently recorded conversation with HoweStreet.

INVERSE ENERGY ETF ERY DAILY CHART

This leads us to believe the inverse Energy ETF, ERY, maybe setting up a very nice bottom in price below $40.  Ultimately, we believe a deeper price bottom may set up in the next 10 days where ERY may trade below the $36~37 range, but time will tell if we are correct about this or not.

Historically, price levels below $40 have resulted in some very nice long trade setups in ERY.  This ERY Daily chart highlights the Support Channel we believe exists in ERY and why we believe any entry-level below $36 is an outstanding entry point for any future upside price move.

WEEKLY ERY CHART

This Weekly ERY chart highlights the past rallies that have originated from within the Support Channel.  Pay special attention to the size and scope of these moves.  The October 2018 rally resulted in a 183% price rally.  The April 2019 rally resulted in a 57% price rally.  The July 2019 rally resulted in a 50% price rally and the last move in September 2019 resulted in a 41% price rally.

Could this next setup in ERY be preparing for another 40% to 60%+ upside price rally?

We believe the setup in ERY is very close to generating an entry trigger.  We have not issued any new trade triggers for our members-only service as we are waiting for confirmation of a potentially deeper price move in ERY.  Right now, get ready for what may become a very good setup in ERY over the next few weeks.

Watch what happens in the energy sector over the next 30 to 60 days.  We may be setting up for a fairly large price rotation as the tensions spill over into the global markets and precious metals.  We may find that Oil is the big loser over the next 60+ days.

Profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts. Visit our website to learn how you can see what this research is telling us.

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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.

The Battle Between Safe Havens And Risk On Continues

With all the fear around the world, it is fascinating to watch the battle that is underway between risk-on and risk-off assets. Chris Vermeulen joins Cory Fleck to share the way he is trading these markets and what he thinks will cause a breakout in either risk-on or risk-off.

Profit during times when most others can’t which is why you should join my Wealth Trading Newsletter for index, metals, and energy trade alerts. Visit our website to learn how you can see what this research is telling us.

I am going to give away and ship out silver and gold rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. You can upgrade to this longer-term subscription or if you are new, join one of these two plans listed below, and you will receive:

1oz Silver Round FREE 1-Year Subscription 
1/2 Gram Gold Bar FREE 2-Year Subscription

SUBSCRIBE TO MY TRADE ALERTS AND 
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Chris Vermeulen
www.TheTechnicalTraders.com

Who Said Traders and Investor are Emotional Right Now?

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

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

Before you continue, take a couple of seconds and join our free trend signals email list here.

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

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

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

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

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

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

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

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

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

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

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

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

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

Trader Predicts Assets Direction With This Forward-Looking Indicator

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

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

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

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

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

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

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

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

V10 TREND TRADING STRATEGY – AVERAGE TRADE 45 DAYS

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

NATURAL GAS V10 CHART ANALYSIS

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

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

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

THE POWER OF CYCLES WITHIN PRICE ACTION

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

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

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

EXAMPLE SP500 PREDICTED PRICE MOVE

HOW I PREDICT FUTURE PRICE MOVEMENT

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

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

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

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

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

CONCLUDING THOUGHTS:

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

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

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

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

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

Chris Vermeulen
Found of Technical Traders Ltd.

7 Year Cycles Can Be Powerful And Gold Just Started One

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

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

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

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

Before finding out what is next quickly join our free trend signals email list.

MONTHLY PRICE OF GOLD CHART – BULL AND BEAR MARKET TRENDS

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

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

US DOLLAR WILL START TO SUPPORT HIGHER GOLD PRICES

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

GOLD MINING STOCKS – MONTHLY CHART

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

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

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

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

CONCLUDING THOUGHTS:

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

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

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

About To Relive The 2007 Real Estate Crash Again?

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

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

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

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

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

2007 VS 2019 REAL ESTATE MARKET TOPPING FORMATIONS

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

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

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

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

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

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

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

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

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

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

2007 REAL ESTATE HOUSING SELLOFF

REAL ESTATE PRICES/VALUATION TESTING 2007 EXTREME HIGHS

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

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

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

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

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

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

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

Chris Vermeulen
Founder of Technical Traders Ltd.

Is The Current Rally A True Valuation Rally or Euphoria?

Our research team has been warning that the US stock market price rally over the past few months has been more of a zombie-land price rally than a true valuation rally.  Our researchers believe the continued push higher has been more about capital seeking safety away from foreign risk and into US Dollar based assets than it has been about anything fundamental or valuation based.  Over the past few days, our researchers identified another rally like this that happened recently and wanted to highlight the eventual outcome of this type of Zombie-Rally. Before you continue, take a couple of seconds and join our free trend signals email list.

Zombie-Rallies happen in the market when there are really no other alternatives but to “keep doing what seems to have been successful over the past few months or years”.  A good example of this is the DOT COM rally that continued to push higher and higher even though investors and traders could clearly see the wheels were coming off the train and companies were not able to achieve profits to measure up to proper valuations.  This is a measure of GREED becoming a driving force behind investor sentiment.  Who’s going to go against the markets when the trend bias is continuing to push higher and the risks of shorting far outweigh the risks associated with following the herd.

Our researchers use our Custom Market Cap index to help us understand where peaks and valleys are likely to form in the markets and, generally, this utility is quite accurate.  It measures the ability of the US stock market to rally, sell-off and rotate very clearly and can be used to measure when the price has reached near extreme levels.  Recently, we authored an article suggesting liquidity and volume would begin to fall over the next few weeks and months that would result in increased volatility headed into the end of 2019.

December 1, 2019: LIQUIDITY & VOLUME DIMINISH – WHAT NEXT?

CUSTOM MARKET CAP INDEX CHART IS CLEARLY IDENTIFYING A MARKET PEAK

Our Custom Market Cap Index chart is clearly identifying a market peak has formed as of the end of

November 2019.  The extreme high peak on this chart on the Thanksgiving holiday week is well above traditional high peak levels and should be considered an extremely high price exuberance peak in the US stock market.  Our expectations were that an immediate price rotation would setup pushing prices much lower over the next few days and weeks.

Historically, once the price reaches these extreme levels, the price typically rotates lower and attempts to target the lower/middle price boundaries drawn by our channel lines.  This would suggest that an 8 to 12% downside price rotation is in our future should this price peak follow previous examples.

Yet, what other evidence could we present to support our expectation that this recent price rally is truly a “zombie-rally”?

TRUE STOCK MARKET VALUATION APPRECIATION INDEX

Our researcher team put together this chart to highlight the true valuation appreciation at various times within the past 6+ years.  When this chart is climbing, valuation levels in the global stock markets are rising in comparison to traditional safe-haven instruments.  When this chart is falling, then valuations are decreasing in comparison to safe-havens and total overall valuation appreciation.  Think of it as a measure of how much conviction is behind the market price activity.  The more traders believe the future appreciation is valid, the more valuations will appreciate and investors will move away from safe-haven investments.  The more concerned traders become about price valuation levels, the more likely they are to begin to hedge into protective, safe-haven, investments and the less confidence they have in the ability of price to appreciate in the future.

This chart highlights a number of key factors…

_First, the true market peak occurred in September/October 2018.  That was the high point on this Global Valuation chart and that was the peak of positive investor sentiment before the US Fed initiated a very deep price rotation.

_Second, the rally from the November 2016 Presidential elections till the January 2018 peak was a true broad-participation rally where global investors really believed in the future price appreciation of the global stock markets.  Thus, we see this Global Market Valuation chart rally much higher after the November 2016 elections.

_ Third, since the peak in October 2018, the global market participants have been much more fearful of the capability of future price advances.  There has been no real price appreciation advance on this chart since the peak in October 2018 and we believe this highlights a very weak foundation in the global markets for this current “zombie” price rally.

If our researcher team is correct, there is a very real potential that a broad market price rotation could test the lower boundaries of this market valuation chart and possibly attempt to push true global market valuations below the February 2018 lows.  This would represent a complete collapse of the global stock market resulting in a -10 to -15% price correction over the next few weeks/months.

Every rotation on the Global Valuation Chart over the past 3+ years can be clearly seen on this SP500 chart.  The January 2018 peak followed by the downward price collapse.  The October 2018 peak followed by the downward price collapse.  Even the June and August 2019 price rotations are clearly evident in the Global Market Valuation chart as downward valuation corrections.

CURRENT US STOCK MARKET PEAK IS NOT SUPPORTED AS A TRUE VALUATION

The current US stock market peak is not supported as a true valuation advance by this data.  Yes, the stock market level is much higher than the peak level in October 2018, but the underlying global market true valuation level is suggesting this is a zombie-land for investors.

The only other time something like this happened was near the end of 2017 when the US stock market continued to climb much higher even though the valuation levels were already weakening.  Although this was a brief period of time, the span from November 2017 till the end of January 2018 resulted in a very similar type of price rally.  Take a look at the “2018” markers on these charts.  You’ll clearly see the Global Valuation chart is showing the valuation level was DECLINING just before the start of 2018 whereas the SP500 chart shows the market price was rallying upward consistently…  Welcome to Zombie-land.

CONCLUDING THOUGHTS:

If our researchers are correct, this current rally will likely end as we near the end of this year when volume and liquidity diminish.  The rotation lower, on Monday, December 2, was very clearly a downward price rotation away from these extreme peak levels and, potentially, an end to the zombie-land price rally of the past few months.

The end of 2019 and early 2020 could be full of very violent and dramatic price rotations as the true global market valuation levels have yet to rally to meet the US stock market peaks.  This underlying fact suggests that price must fall in order to realign with true valuation levels or the valuation levels must immediately start to rise to meet current price levels.  Our research team believes that price levels will collapse to meet true valuation levels.  There is no indication that any true investor valuation appreciation is taking place at the moment, thus price must fall to fair values based on true investor valuation estimates.

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

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these super cycles are going to last years. A gentleman by the name of 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. 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.

Chris Vermeulen
Founder of Technical Traders Ltd.

The Bond Market Is Telling Us Some Weakness Could Be Entering The US Markets

Chris Vermeulen joins me to look at the charts for US markets, bonds, gold, and natural gas. He points out that bonds have rebounded and are showing that some of the smart big money is taking a more defensive position. However gold is lagging the moves in bonds. Also considering where the VIX had dropped to we could finally see a US market correction that could bring some fear back into investors’ minds.

I want to wish everyone a Happy Thanksgiving and if you find this type of analysis interesting be sure to visit my website and sign up to get both my swing trade and investing ETF trade signals at 41% discount, plus a free bar of silver or gold with my Black Friday Offer Today!  Visit: www.TheTechnicalTraders.com

Chris Vermeulen
Technical Traders Ltd.

Welcome To The Zombie-Land Of Investing – Part 1

This current market environment is very reminiscent of the 2006-08 market environment where price rotated into weakness on technicals and continued to establish new all-time price highs in the process – creating what we are calling a “zombie-land melt-up”.  This very dangerous price action is indicative of money chasing a falling trend.  Where technicals and fundamentals are suggesting that price is actually weakening quite substantial, yet the process of price exploration is continually biased towards the upside as investors continue to pile onto the back of the beast expecting a further melt-up.

Let’s take a look at what happened to the ES and Gold in 2006 and 2007. But, wait before you continue reading make sure to opt-in to our free market trend signals newsletter.

SP500 WEEKLY INDEX CHART IN 2006-2007

First, we’ll start with the ES (S&P 500 E-mini futures contract).  Pay attention to the MAGENTA arcs we’ve drawn on this chart that highlight the continued new highs reached throughout 2006 and 2007.  Pay attention to the price rotation and volatility that started to happen near the absolute peak in July and October 2007 – just before the massive price collapse began.  Notice how the technical indicators had been suggesting that price was weakening quite extensively since the beginning of 2007 and more aggressively after July 2007.  Pay very close attention to the last peak on this chart and how a very deep price correction setup a new price high in a very tight FLAG formation just before the breakdown event.

PRICE OF GOLD WEEKLY CHART IN 2006-2007

This Gold chart from the same time period highlights how Gold anticipated the market weakness by rallying up to a level near $750 in May 2016 – then retraced nearly $200 before forming a lengthy price bottom/base.  Gold, acting as a safe-haven for investors, rallied almost 94% in the 24 months prior to this peak in 2006.  It rallied another 256% (at the ultimate peak) from the low point established in June 2006.  The process of this rally was an extended base/bottom in Gold between the base/bottom in 2006 and the renewed uptrend that started just before the end of 2007 (just before the markets started crashing).

COMPARE SP500 INDEX 2006-07 TO 2018-19

We believe the current uptrend in the US stock market is acting in a very similar price formation to what we’ve highlighted in the 2006-07 market “zombie-land melt-up”.  We believe that investors are piling into the US stock market when price weakness is clearly being illustrated by the technical and fundamental data.  We believe a capital shift has continued to pile money into the US stock market as foreign investors pile onto the backs of other investors seeking safety and security within a stronger US economy.

CONCLUDING THOUGHTS:

We believe the current Zombie-land market is anticipating a price roll-over event (reversion) and that technical and fundamental data supports this analysis.  We believe the credit/debt expansion of the past 8+ years has fueled a massive bubble that may result in a deep price correction if given the right circumstances and events.  We believe this upside price move in the US markets, which are setting up near the exact same time-frame as the 2008 price collapse, maybe a very stern warning for traders and investors – BE PREPARED.

In Part II of this research post, we’ll highlight the similarities setting up in the current market “Zombie-land” and what happened in 2006~2008.  The expansion of the credit market over the past 8+ years has been extensive throughout the globe.  The biggest difference this time is that risk may come from foreign markets vs. from within the US.

Keep reading our research because our proprietary tools have been nailing all of these price targets and move many months in advance.

I urge you visit my ETF Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Bar!

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

Chris Vermeulen
www.TheTechnicalTraders.com