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Important Japanese Candlestick Reversal Patterns
The Doji Star and Shooting Star Japanese Candlestick patterns are part of a unique group that identifies potential price reversals, support/resistance and can often build into other types of patterns. Our belief is these setups in the current chart will eventually create an Evening Star formation with a downside price move early next week. This type of pattern would confirm resistance near the body of the current Doji or Shooting Star candlestick and also confirm our analysis that a price breakdown should continue.SP500 – ES Daily Chart Highlights the Doji Reversal Pattern
This ES Daily chart highlights the Doji pattern created by the close of Friday trading near 2923.75. The fact that price narrowed on Friday into a Doji pattern forming below the previous highs suggests general weakness in price and a possibility that early next week we may see price breakdown to complete a Harami or Doji Star Reversal Pattern.Dow Jones – YM Daily Chart Highlights the Doji Star Reversal Pattern
This YM Daily chart shows a similar pattern – another Doji Star setup. The Doji pattern sets up right at a key resistance level, near 26,400, and aligns with other chart and patterns to warn that price may weaken into a strong Candlestick reversal pattern. All it would take is for the price to move below 26,000 and begin a new downside leg.Transportation – TRANS Daily Chart Highlights the Shooting Star Reversal Pattern
This TRAN chart shows a true Shooting Star pattern. The unique shape of the Inverted Hammer candlestick (part of the Umbrella Group) shows clearly. The gap between the last to candlestick bodies sets up the Shooting Star pattern. This is a classic Top Reversal setup. Found at this point in price action suggests price may be set up for a big breakdown. At the very least is shows clear resistance is at 10,130 and that we must be aware that price was rejected at this level.Financials – XLF Daily Chart Highlights the Doji Start Pattern
Lastly, this XLF Daily chart shows a true Doji Star pattern where a Doji candlestick sets up with a gap between the real bodies of the last two candlesticks. Again, this pattern sets up just below $27 which has continued to operate as strong resistance. Any breakdown in this sector early next week will confirm this pattern and set up a Three River Evening Star pattern – a Sell Signal.CONCLUDING THOUGHTS:
Every one of these patterns provides a clear definition of resistance and also show price weakness set up near the end of last week. At this point, we are just waiting to see what happens early next week after a long holiday weekend. Based on our past research, we believe the downside potential far outweighs the upside potential – unless some major news event pushes the price much higher – like the news of the new US/China trade talks. We would advise traders and investors to take advantage of these higher prices to pull profits out of open long positions and take some risk off the table at this juncture in price. We entered a new trade today and our portfolio is primed and ready for big moves going into next week. We believe our super-cycle research and other proprietary modeling systems are suggesting that price weakness will dominate the markets for the next few months. Ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis and recession. In short, you should be starting to get a feel of where commodities and asset class is headed for the next 8+ months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter.FREE GOLD OR SILVER WITH SUBSCRIPTION!
Chris Vermeulen – www.TheTechnicalTraders.comDaily IWM chart (Russell 2000 Small Cap Index)
This close up view of the Daily IWM chart highlights the Sandwich pattern over the most recent 5 trading days and how price enters this volatile period, rotates around within a range, then settles near the upper or lower end of the range before a price breakout occurs. Notice the earlier Sandwich pattern setup and how price settled near the bottom of the range before a downside price leg pushed the price much lower. It is our belief that the IWM could be setting up for a significant reversal or breakout based on this Sandwich pattern os be ready for an extended move.Longer-term View of the Daily IWM chart
Here is a longer-term Daily IWM chart that highlights previous Sandwich patterns for you to review. We go into more detail and a very interesting setup in the IWM and transportation index that took place in 2008, same set up we see now. See charts and report here. One thing to understand about the Sandwich pattern is that it is an early warning sign that price has reached an inflection point and will likely attempt to break out or reverse down from the ranges set up within the Sandwich pattern. Also, you can see from the examples, above, that these patterns can take many bars to form and are sometimes somewhat convoluted in structure. The most recent Sandwich pattern is unique because it is very defined over the past 5+ days. We believe an upside price pop to the upside could turn into a “washout high” price setup. Compare this price activity to the SPY chart and you’ll see that the IWM, Small Caps, are operating as a leading price indicator for the potential breakout/breakdown move that may happen in the immediate future. We see similar types of price rotation, but nothing as clear as we see on the IWM chart. The fed news is shaking things up and our analysis stats this month could be the market top. We expect Aug 19th-ish… but this month is the window we feel it may happen. Stay tuned to our research – this is going to be fun to trade.WARNING SIGNS ABOUT GOLD, SILVER, MINERS, AND S&P 500
In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here. I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused mainly on the SP 500 index and the gold miners index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here. On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis. More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.CONCLUDING THOUGHTS:
In short, you should be starting to get a feel of where each commodity and asset class is headed for the next 8+ months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter. Be prepared for these incredible price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our Wealth Building & Global Financial Reset Newsletter. You won’t want to miss this big move, folks. As you can see from our research, everything has been setting up for this move for many months. Join me with a 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. 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 starting to present themselves will be life-changing if handled properly.FREE GOLD OR SILVER WITH MEMBERSHIP!
Kill two birds with one stone and subscribe for two years to get your FREE PRECIOUS METAL and get enough trades to profit through the next metals bull market and financial crisis! Chris Vermeulen – www.TheTechnicalTraders.comBECOME A TECHNICAL TRADER TODAY AND TRADE WHAT MATTERS – PRICE ACTION! CLICK HERE
Chris VermeulenI have been pouring over the longer term charts as we’ve started to see Oil and Gold move in directions that would indicate increased fear throughout the global markets while a contraction in economic activity/oil prices appears to be setting up for another big move. The objective is to attempt to identify longer-term volatility expectations and price targets. To accomplish this task, we use our Adaptive Fibonacci predictive modeling utility on 3 Week charts because they provide a unique look at price activity and are a bit more reactive to shorter-term price activity than Monthly price bars.
We found some very interesting components by reviewing these charts of the ES, NQ, YM, and CL. We believe we are setting up a 2~4+ week sideways price rotation in the US stock market as price attempts to consolidate within this range before a broader breakout/breakdown move could happen. Just as we predicted many months ago, the July 2019 price peak we suggested could form appears to be setting up with a sideways pennant/flag formation as investors digest the economic and global trade war news data.
Eventually, the price will make a move in an attempt to break this sideways price channel and our predictive modeling solutions can help us to understand how these price setups will playing out. Let’s get into the charts and research.
As we start to pull apart the data from these charts, we urge you to pay attention to two things – the range of the current Bullish & Bearish Fibonacci Price Trigger levels and current price rotations of price peaks and troughs over the past 40 to 60 bars. It is very important to understand and attempt to use the “new price high” and “new price low” Fibonacci price theory that we keep talking about in our articles.
This first chart is the ES 3-Week chart highlighting the range between the Fibonacci Bullish and Bearish Price Trigger Levels (highlighted in light-CYAN). It is important to understand why the current bearish price trigger level is so far below current price levels. The Adaptive Fibonacci modeling system adjusts trigger levels based on recent price activity and price volatility to attempt to identify when the price is congesting in a sideways price trend or trending upward or downward. When price congests in a sideways form, the Adaptive Fibonacci modeling tool identifies this and determines that price would need to move to new levels in order to qualify for a new bullish or bearish price trigger. In this case, it is suggesting that price would need to fall below $2014 before this 3-Week chart would qualify the move as a “new bearish trend”.
That is a big move from current levels. It totals more than -750 points – a -27.5% price decline.
Currently, as long as the ES price stays above the $2633 level, the Fibonacci predictive modeling system is still suggesting the Bullish trend is intact and should continue.
This NQ 3-Week chart is setup in a similar manner to the ES chart. Although the Fibonacci volatility range on the NQ chart is much more narrow than the ES chart, the Fibonacci modeling system is still suggesting that the current trend is still Bullish and the key levels for the triggers are $6792 for the Bearish Trigger level and $6556 for the Bullish Trigger level.
Because of the narrow volatility range and because the Bearish trigger level is above the Bullish trigger level, we believe a price rotation where the price stays above $6800 is very likely over the next few weeks. Obviously, should price break below the Bearish Trigger level, then we would begin to become concerned that a broader downside trend is being established and start to look at the Fibonacci downside price targets (near $5815 & $3900). Until that happens, expect sideways price rotation with a 250 to 500 point range on average (about 2x the Fibonacci volatility range).
The YM is really the key to understanding just how the markets are going to play out over the next few weeks and months. The extremely large Fibonacci volatility range on the YM chart highlights the potential for the wild sideways price rotation that we are expecting over the next few weeks and months. Remember, our analysis from many months ago suggests a price peak will likely form in July/August 2019 and prompt a broader downside price move after this peak completes. Our expectation that a current sideways price channel is setting up leads us to believe the apex of this sideways price channel may result in a very brief price rally (pushing prices back towards recent highs) before rolling over and starting a new downside price move to coincide with our July/Aug 2019 predictions.
One way or another, it appears the DOW/YM will be leading the way in terms of price volatility and rotation. The wide range between the Bullish and Bearish Fibonacci Price Trigger Levels is suggesting that price volatility is increasing and that the YM would have to move to levels above $29,750 or to levels below $18,875 before establishing any new price trends. The past Fibonacci trigger levels help us to understand key price levels as this future move takes place.
Past Fibonacci Trigger Price levels are $26,025 for a Bearish Price Trigger level and $24,770 for a Bullish Price Trigger Level. This means if the price is below $26,025 – we should expect a bearish price trend to continue and if the price is above $24,770 – we should expect a bullish price trend to continue. Yet, price is current BETWEEN both of these levels, so what should we expect right now? When the price is in between these levels, like now, we typically look for the last price rotation (peak or valley) and for the last level that was crossed (in this case the $26,025 Bearish level) and would conclude:
The trend is currently Bearish and the $26,025 level is key to maintaining this bearish price direction. Should price move back above this level and close above this Bearish Price Trigger Level, then we would consider the trend “moderately bullish” while we wait for a new Price Trigger Level Breach to setup.
Lastly, Crude Oil. We’ve been writing to all of our followers that we felt Oil was setting up for a price rotation many weeks ago. We warned that the $65 price level may be the end of the move and that the $55 to $50 levels are the likely downside targets. The volatility range is somewhat narrow and the last Trigger Level that was breached was the Bearish Trigger Level near $68.75. Therefore, we believe the recent downside price move, below the $60 Bullish Trigger level, results in a new Bearish price trend with immediate targets near or below $50. Ultimately, the $42.40 level may be the longer term downside price target – which would coincide with a broader commodities slowdown and global economic activity contraction.
So here is what you need to know to go into this weekend and for the next 4+ weeks.
Expect the US stock market to trade in a moderately volatile sideways price channel for the next 4+ weeks.
Expect the end of this price channel to result in a “false rally” move that may push prices towards recent highs before faltering and rotating back to the downside.
Expect this END of the sideways price channel to happen sometime near mid-July or early August 2019.
Expect Gold and Oil to continue to react as “fear measures” over the next few weeks/months as global traders reposition their assets throughout this rotation.
Expect a bigger price move near late July through September~October 2019 as this volatility move really begins to take root with equities.
Follow our research and learn how we can help you stay well ahead of these price moves. We’ve just highlighted what is likely to happen over the next 30 to 60 days in this research post. Want to know how we are going to trade these moves? Join our other members to see how we create success and keep our members ahead of these big moves. Also, if you wanted me to ship you free silver rounds with a subscription to this Wealth Trading Newsletter you better join today as this offer expires June 1st.
Chris Vermeulen
www.TheTechnicalTraders.com
Our research team, at www.TheTechnicalTraders.com, have been pouring over the charts and data to identify what is likely to happen over the next 60+ days in terms of global stock market volatility vs. the US stock market expectations. Recently, we posted a research article highlighting our Adaptive Dynamic Learning (ADL) predictive modeling system on the Transportation Index (https://www.thetechnicaltraders.com/markets-rally-hard-is-the-volatility-move-over/). This research suggests we are still going to experience increased price volatility over the next 30 to 60+ days and that price rotation may become somewhat of a normal expectation throughout the rest of 2019.
We believe the key to understanding price volatility over the next 30+ days lies in understanding the potential causes of uncertainty and capital shifts that are taking place around the globe.
Next week, On May 23~26, 2019, the European Elections take place (https://www.telegraph.co.uk/politics/0/european-elections-2019-uk-vote-date-results/). This voting encompasses all 26 EU nations where all 753 European Parliament seats may come into question. The biggest issues are BREXIT and continue EU leadership and economic opportunities for members. The contentious pre and post-election rancor could drive wild price swings in the global markets over the next 10+ days.
A tough stance between both nations, the United States and China, have left trade talks completely unresolved (https://www.reuters.com/article/us-usa-trade-china/chinas-tough-trade-rhetoric-leaves-talks-with-u-s-in-limbo-idUSKCN1SN207). At this point, the currency market is attempting to absorb much of the future expectations while the US/China stock markets react to immediate news events and perceived future economic outcomes. Overall, until this issue is resolved for both nations, the news cycles will likely drive increased price volatility across the global markets.
The US 2020 Presidential Elections are ramping up with over 24 Democratic potentials attempting to unseat President Trump. The current new from DC regarding the continued DOJ investigations and political posturing regarding Barr, Nadler and a host of other DC actors is setting up for a “cliff hanger” outcome over the next 12+ months. This will likely become one of the most hotly contested US Presidential election events in decades. The news of investigations, political corruption, and a potential US political “coup” attempt is certain to keep everyone guessing over the next 2+ years.
The markets are reacting to this volatility by attempting to adjust valuations expectations and future economic outcomes in multiple forms; currency price valuations (attempting to adjust to a shifting future economic landscape as well as to attempt to mitigate risk/capital/credit issues), Stock Market price valuations (attempting to further mitigate risk/capital and credit issues, and debt rates (attempting to effectively price risk and output expectations for the future).
Here is a map of the Currency Market over the past 12 months. We can see the dramatic shift that has taken place since the price peak in February 2018.
Overall, the US Dollar has continued to strengthen over the past 12+ months and is regaining the “King Dollar” status as the global uncertainty continue to plague foreign and EU markets. We don’t expect this to change in the near future.
Our continued research into the current price rotation in the US and global markets suggest that we are going to continue to experience moderately high price volatility across all markets over the next 30 to 60+ days – possibly well into the end of 2019. As we suggested, above, the uncertainty relating to the multiple election events and global trade/geopolitical events do not present a foundation of calm and collected future guidance. The only thing we can suggest regarding these future expectations is that the US and more mature global markets should be able to navigate these uncertain times much more effectively than emerging or “at risk” foreign markets.
Below, you will see a global Heat-Map spanning one week. Traders should take special notice that certain EU countries are surviving the recent global price rotation quite well (France, Netherlands, Switzerland, Ireland, Germany, and others). We believe this is the result of the fact that these economies are rather mature and consistent in their output and expectations. Pay attention to the South American, Asian and Caribbean nations. It would appear that a fairly strong price contraction is taking place throughout much of these nations as the focus shifts towards the more mature markets.
The following One Month global Heat-Map highlights a slightly different economic picture for some nations, yet confirms the shorter-term (weekly) trends for many others. Bermuda, Cayman, Germany, and Switzerland appear to be the Bullish Leaders over the past 30 days while the rest of the globe appears to be slipping into Bearish price trends. Canada and the UK appear moderately mixed with some green showing on the heat-map – which would be expected as both of these nations are considered mature global economies with strong economic ties to the US.
We believe the next 10~30+ days are going to be filled with moderate price volatility and we expect a setup in the global markets, near the end of June 2019, where a massive price volatility explosion may take place. This could be correlated with some trade issue, some fallout of the EU elections or some breakdown in credit/debt risks taking place between now and September 2019. We’ll go into more detail in Part II of this research post.
This is proving to be an incredible trading year for traders who follow our trade alerts newsletter.
For active swing traders, you are going to love our daily trading analysis. On May 1st we talked about the old saying goes, “Sell in May and Go Away!” and that is exactly what is happening now right on queue. In fact, we closed out our SDS position on Thursday for a quick 3.9% profit and our other new trade started Thursday is up 18% already.
Second, my birthday is only three days away and I think its time I open the doors for a once a year opportunity for everyone to get a gift that could have some considerable value in the future.
Right now I am going to give away and shipping out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. I only have a few more left as they are going fast so be sure to upgrade your membership to a longer-term subscription or if you are new, join one of these two plans, and you will receive:
1-Year Subscription Gets One 1oz Silver Round FREE
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2-Year Subscription Gets TWO 1oz Silver Rounds FREE
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I only have a few more silver rounds I’m giving away
so upgrade or join now before its too late!
SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!
Happy May Everyone!
Chris Vermeulen
Last year just days before the big Bitcoin breakdown we notified everyone publicly to get ready for a swift drop from $6000 to $4000 which played out perfectly within a few days. Our cycle system and technical analysis skills combined can pack a powerful punch and this one of those incredible moves where the stars aligned for us as traders.
October 12, 2018 – Post and Chart Here
We then further updated our followers in March of this year that a breakout was about to take place and a run to $6000 should take place. After that upside breakout move on April 8th, we posted this video further confirming $5800-$6000 was still the target.
Today/May Bitcoin appears to be setting up a broader top formation that suggests another move lower is about to unfold.
This first Daily chart highlights both support and resistance in Bitcoin. The Resistance goes all the way back to July 2018 where a Three River Morning Star pattern set up a gap with a Doji Star formation. This created the support level that was ultimately broken in November 2018. Support formed near $4000 in early 2019 with similar types of gap formations. This support level was ultimately broken in April 2019 with a move back up to resistance near $6000.
We believe the setup of the most recent price activity is setting up a classic three mountains top formation. A weak price rotation prompting a downside price move right now could be a short term ultimately top with next support near $5000. We believe a fairly quick downside price move toward the $4400 level (or lower) – near support.
Once price move to near the $4400 price level, or lower, if the support level is broken, we could see the price of Bitcoin fall all the way towards the $3500 level or lower. Fibonacci price theory suggests the failed high price move, near $7500, would represent a major failed high. This failure suggests a move lower attempting to establish a new price low. For this to happen, the price of Bitcoin would have to fall below $3000 which may sound crazy, but so was $20,000 bitcoin!
Watch for a reversal to unfold in the coming days, could be another opportunity to profit from another cryptocurrency collapse. Any failure of this breakdown/reversal move would suggest Bitcoin is setting up a new Pennant/Flag formation where the price will trade sideways before prompting a bigger breakout move. We believe a price breakdown is about to unfold and we expect prices to fall below $4400 within 14 to 28 days.
If you want to become a technical trader and pull money from the markets during times when most others cannot be sure to join the Wealth Trading Newsletter today. Plus, for a few days only I’m giving away and shipping Free Silver Rounds to subscribers who join our select membership levels.
Chris Vermeulen
www.TheTechnicalTraders.com