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Must Watch Market Analysis Videos: Gold, Silver, S&P500, Oil

Here are a few of the best videos right now on where the financial markets are going next and how to trade them stress-free and with a trading plan.

This covers the S&P500, bonds, gold, silver, miners, natural gas, and crude oil

WHAT YOU NEED TO KNOW ABOUT THIS POTENTIAL MARKET TOP

KILLER MARKET ANALYSIS ON PREDICTING PRICE THIS WEEK

HOW TO TRADE THE MARKETS, AND WHEN DO METALS GO BALLISTIC?

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

The Next Big Breakout Trade: Large Cap Gold Stocks

This technical analysis video I put together has a lot of great trading opportunities in it while providing a lot of educational content to help you see the markets and trade in a way that will reduce your risk/exposure when needed.

I use my BAN trading strategy which is I focus on the Best Asset Now and only trade the sector, index, or commodity that has the least risk and most upside potential at the current moment.

I won’t lie, im super picky and conservative so trades are few and far between but as a swing trader, or any trader for that matter, the quality of a trade alert trumps quantity. Watch this video below and see what I provide my subscribers every morning before the opening bell. If you like it, then join us and become a technical trader today!

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Weakness Appears To Be Setting For This Week’s Economic Data

As the world reacts to the global economic slowdown because of the COVID-19 virus event and the massive stimulus programs and central bank efforts to support the global economy, investors still expect weakness in the US and foreign markets.  We believe this expected weakness will not subside until news of a proper resolution to this virus event is rooted in the minds of investors and global markets.

Hong Kong and China are currently concerned about experiencing a “third wave” of the COVID-19 virus within their society.  As the economies open back up to somewhat normal, people are very concerned that a renewed wave of new infections will suddenly appear and potentially result in another shut-down event or infectious cycle?  We believe all nations are watching what is happening in Hong Kong and China as they attempt to reopen their economies.

The rest of the world is still battling the rising infection rates and dealing with the economic shutdowns that have brought the global economy to its knees.  Europe, Japan, Canada, and the US are all experiencing vast disruptions to their economies and commodity prices and demand expectations are collapsing as a result.

Nearly a week ago, we issued a research article that suggested our proprietary Fibonacci Price Modeling tool’s key resistance levels may become a very valid ceiling for any price recovery.  It appears this is happening in the markets as the NQ Daily chart, below, shows.

Before you continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

DAILY NASDAQ (NQ) CHART

The NQ resistance level, near 7880, has acted as a soft ceiling in the NQ over the past 4+ trading days.  Today, the NQ briefly rallied above this level, then rotated downward below this level again to confirm this key resistance level.  We believe this critical Fibonacci resistance level may continue to act as a price ceiling over the next few trading days and push prices lower as economic news and expectations hit the news this week and next.

The next downside price target for the NQ is 6565 – new price lows.

If you have not seen this important technical analysis on the Nasdaq which I posted a couple of days ago, be sure to see these charts.

SP500 (ES) WEEKLY CHART

This ES Weekly chart illustrates another key resistance level near 2679.  Although the ES price has not rallied up to reach this critical Fibonacci resistance level, we still believe this level is acting as a price ceiling and that the ES will weaken as future expectations are confirmed by earnings data, economic data and other collateral damage to the global economy.

We are still very early in understanding the total scope of this virus event.  The US and other global central banks are attempting to front-run any weakened expectations as a result of this virus event.  We continue to believe the extended collateral damage to the consumer, business and other aspects of the economy are yet to come.  Most recently, consumer delinquencies have begun to skyrocket and the news is being printed about landlords and renters being unable to satisfy obligations on April 1st.

This is part of the reason why we believe further caution is warranted at this time in the markets. We issued an Important Trade and Investment Alert Yesterday.

Our research team believes a deeper price low will likely set up over the next 30+ days to establish a true price bottom.  As we’ve warned, we believe extended collateral damage to the US and global economy will soon become better understood and the extended shutdown of the US and other economies only manages to complicate any positive expectations for a bottom.

We believe a deeper price low will set up within the next 30+ days and we urge skilled traders to pay attention to the broader expectations of the markets.  Earnings data and other economic data will continue to stream into the news centers over the next 30+ days.  Don’t get too aggressive with trying to buy a bottom in the markets just yet.  Be patient and wait for the markets to show you when the bottom has really setup.

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 short-term swing traders.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts visit my Active ETF Trading Newsletter. If you are a long-term investor looking for signals when to own equities, bonds, or cash, be sure to look into my Long-Term Investing Signals.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategist
Founder of Technical Traders Ltd.

Important Trade and Investment Alert Was Issued

We just issued this trade alert to members of The Technical Investor newsletter which allows members to protect their wealth and assets while continuing to take advantage of opportunities generated by the US and global markets.  This is the first trade alert issued in 2020 of this kind.

If you are an active investor or traders, have a retirement account of any type or have assets in the stock market, then we urge you to take action and sign up to get this investment trade signal.

Our focus is to help traders and investors protect and grow their wealth. We use proprietary price modeling tools that can’t be found anywhere else.  Our combined 55+ years investing and active trading experience provides you with incredible insight and opportunity.

Passive investing is something for the “other guys”.  If you want to grow your wealth, protect your assets and learn to take advantage of the biggest price swings in the markets, then you need to follow our research and price modeling systems with us.

If you are concerned this may to be active for you, just know that we only buy the SP500 ETFs or move your money to cash where it is the most effective at times. If you can call your broker and tell them what to do with our alert instruction, or if you can place the trades yourself, then you can follow these investing signals.

Each year we have 2-3 trade opportunities to add new capital to the market, and some years we may have a new bull or bear market signal. Remember, bull market trades will last 5-12 years, bear market trades will last 1-3 years. No matter what, we can make money during both markets.

Since 2007, Passive Investing would have returned only 53.75% ROI – only 4.48% annually.  Active investing using our proprietary price modeling systems and deploying our proprietary position allocation modeling tools returned over 135% ROI – a 11.49% annually over the same time period.  That’s a whopping 230% more annual return than simply letting your investments ride out the market fluctuations.

Allow us to take a minute to explain just how powerful this advantage really is to you.

Imagine you started with a $100,000 account and compared the difference between a passive investment style and TheTechnicalInvestor.com trading style over a span of 10 to 15 years.  Most investors contribute to their retirement accounts over a 25+ year span of time – possibly longer.  The difference between the two styles of investing is dramatically different in terms of the final results:

At the 5 year mark, the difference between the two styles is almost $48,000 in extra profits (over +38% more growth for your assets).

At the 10 year mark, the difference between the two styles is almost $140,000 in extra profits (over +91% more growth for your assets).

At the 15 year mark, the difference between the two styles is almost $318,000 in extra profits (over +164% more growth for your assets).

After the 15 year example (assuming your passive investment style maintained a 4.48% annual ROI and our active investment style maintained a 11.49% annual ROI), the results are stunning.

With passive investing, you would have nearly DOUBLED your assets and wealth.

With TheTechnicalInvestor.com active investing, you would have more than TRIPLED your assets and wealth.

When you add our proprietary “re-entry” triggering system, the numbers explode to +40% annual ROI with 1x leverage; 3512% with 2x leverage; 9417% with 3x leverage.

The difference is that we help you navigate the bigger price swings/trends in the market and actively help you manage your allocation in the markets using our proprietary price and position sizing technology.

What’s the cost for TheTechnicalInvestor.com? $249 per year or $149 every 6 months.  Annually that breaks down to about $21 a month, which is $1 per trading day to know you are on the right side of the market.

Isn’t it time you took advantage of proprietary technology and services and started to create even more opportunities to grow your assets?  The market volatility recently has created an incredible opportunity for everyone that has a retirement/401k account.  Now is the time to focus on these big price swings because this is when opportunities are created to grow your wealth 3 to 5 times faster.

Visit www.TheTechnicalInvestor.com to learn more.  Sign up today to learn what our newest trade alert action is all about and how you can start profiting from these huge price swings in the future.  $21 a month is nothing when you really think about it.  Join our other subscribers in learning to protect and grow your wealth with our technology today.

Chris Vermeulen
Chief Market Strategiest
Found of Technical Traders Ltd.

TLT Trade of the Year and What Is Next!

We just closed out our TLT position, which opened up 20.07% from our entry price, amazing. Who said bonds are dull and boring? haha

Only three times since 2008 have I seen bonds rally more than 20% from a new swing trade entry. Each time the move was short-lived, and the price collapsed after it within a few weeks. My goal is not to try and time tops and bottoms for the best entry and exit level. That is a gambler/losing strategy. Sure it pays big if you luck out and nail the timing, but they are few and far between, and the losses from trying will eat up any previous gain.

What I do is follow the price using my proven technical trading experience and tools, which I have acquired since 1997 and then apply position management to limit risk. I then use my trading systems for statistical analysis, so I know the odds for trade are favorable to win and also to pinpoint profit taking levels just like today’s TLT position closure.

Sure, TLT could pop and rally another 5-10%, but its highly unlikely, and it’s fear/volatility driven, so any spike higher from here is likely to drop straight back down shortly after. We got the low-risk easy money portion of the trade, and we are back in cash while everyone today is freaking out and losing money and piling into bonds because of fear, which is likely a top for the price of bonds for a while.

The bottom line, we avoided the stock market crash. We will not be trading inverse ETFs on the stock market until we enter a bear market. Until then, we avoid market corrections by moving to cash, then into bonds just like we have done with TLT. The SP500 is down 14% from the high a few weeks ago, and our TLT bond position is up 20% as of today.

We also made some good money on GDXJ for those who follow our trading strategy and position management. The last couple of weeks has been a tremendous learning experience, in my opinion. The recent price action amplifies how critical position management is (targets, stops) are for our long term trading success. No one knows where the price will ultimately move to or reverse, but through the use of technical analysis and our trading systems, we can consistently pull money out of the market each year.

Yes, we will have small losing trades from time to time like SSO, and UNG but when we do take a loss, they don’t cause much damage to our overall account because of our position sizing and stop levels. I was once told by my trading mentor in 2001 that you should be proud of yourself for taking a loss.

Taking a loss (closing a losing trade) means you are following rules, managing risk, and that you can accept your timing for the trade was wrong. That has stuck with me and pops into my head every time I have to bite the bullet and close out a losing trade.

The stock market is down 9.5% for the year as of today, our account is positive and making money, not many can say that right now. The Power of Technical Analysis!

Remember, successful trading is not about having a bunch of positions you have open, and thinking you always need to own something. It’s about limiting/avoided risk when the odds are unfavorable, and getting back into the market when they do become favorable. Cash is a position and sometimes its the best and only position to be in like right now.

Thanks, everyone, for the kind and uplifting emails, it really is amazing to navigate the market like this with all of you.

HAPPY MEMBERS MAKING MONEY!

Hi Chris, Many thanks for your sterling work. The beauty of your work is that you cover all asset classes to identify setups. One key lesson we learnt is to trust the bond market more than the equities market when the trend between the two asset classes diverges. 
Regards, Yusuf

Hi Chris,
I just wanted to send a quick note to tell you how impressed I am with your service and your trading system.  I’ve followed/subscribed to several folks over the past several years and have never seen anything like what you provide. Your timely and accurate technical analysis of the major markets is incredible and perfectly aligns with my preferred swing trading approach. My favorite part of the day is watching (and learning from) your morning videos. And to know that my account is steadily increasing in the face of utter market panic is invaluable.

Thanks so much for all you do!
Ryan M.

If you want to become part of an exquisite trading newsletter where you can learn to reach the charts, spot trades, profit targets, stops, and be force-fed winning trades like this TLT trade, and our GDXJ trade then join my Wealth Building Trading Newsletter Today!

Click Here: https://www.thetechnicaltraders.com/#pricing  

Chris Vermeulen
Chief Market Strategist
Technical Traders Ltd.

Is The Coronavirus Bullish For Stocks?

Earnings volatility has certainly been big.  Tesla pushed the markets much higher early this week and the US stock markets have continued the upward momentum after the State Of The Union address and the acquittal of President Trump on Wednesday.  Still, we continue to believe this rally may be a “fake-out” rally with respect to the fallout from the Wuhan virus.  Certainly, foreign investors are continuing to pour capital into the US stock market as the strength of the US Dollar and the strong US economy is drawing investment from all areas of the globe.

We believe the scope of this parabolic rally in the US stock market should actually concern skilled traders.  Markets just don’t go straight up for very long.  The last time this happened was in the 1970s and 1980s.  Very minor volatility during that time prompted a big move higher in the US stock market that set up the eventual DOT COM collapse.

Oil, Shipping, Transportation, Consumer, Manufacturing, and Retail will all take a hit because of the Wuhan virus.  We’ve, personally, received notices from certain suppliers that factory closures in China will greatly delay the fulfillment of orders.  Our opinion is that nations may have to close all or a majority of their cities, ports, and activities in Asia for at least 90+ days in order to allow this virus event to peak and subside.  We don’t see any other way to contain this other than to shut down entire cities and nations.

The US Fed and Central Banks are doing everything possible to continue the economic growth and stability of global economics.  Yet, the reality may suddenly set in that without risking a global virus contagion, nations may be forced to actually shut down all non-essential activities for well over 90+ days (possibly even longer).  If you could stop and consider what it would be like for half of the world, and many of the major manufacturing and supply hubs, to shut down for more than 3 to 6 months while a deadly virus is spreading.

Repo lending continues to show that liquidity is a problem.  We believe this problem could get much worse.  Skilled traders need to be prepared for a sudden and potentially violent change in the direction of the global stock markets.

$TNX – 10 YEAR US TREASURE YIELD DAILY CHART

30 YEAR TREASURY BOND PRICE – DAILY CHART

There is now a solid wall of inversions in all the treasury notes and bills.  The 10-year yield is inverted with 6-month and shorter durations.  The 30-year long bond dipped below 2.0% for the third time and is just 6 basis points from a record low.

Prepare to capitalize on this “crowd behavior” in the near future.  Right now, the US stock market is pushing higher as Q4 earnings drive future expectations.  Yet, be prepared for the reality of the situation going forward.

This Wuhan virus may present a very real “black swan” event.  At the moment, the US stock market appears to want to rally as earnings and economic data continues to impress investors.  Overall, the real risk to the markets is a broader global economic contagion related to the Wuhan virus and the potential it may have on foreign and regional economies.

Next week is going to be critical for many things I feel. Virus contagion growth, factory closures, Oil breakdown follow through, equities breakout follow through, and the precious metals pending move.

We locked more gains this week with one of our positions as we rebalance our portfolio holdings for these new big trends to emerge. If you want to know where the markets are moving each day and follow my trades then join my ETF Trading Newsletter.

Chris Vermeulen
www.TheTechnicalTraders.com

Broad Market Sector Rotation Starts In 60+ Days – Part I

We have been writing about the strong potential for a deeper market rotation in the US and global markets for well over 60+ days.  In fact, our researchers predicted an August 2019 breakdown date based on Super-Cycle patterns that, eventually, pushed into 2020 as the US/China trade negotiations and other global news kept global markets in a low volatility bullish trend throughout the end of 2019.

We’ve highlighted some of our research posts over the past 30+ days to help illustrate the technical and price patterns that our research team has identified and shared.

December 20, 2019: WHO SAID TRADERS AND INVESTOR ARE EMOTIONAL RIGHT NOW?

December 16, 2019: CURRENT EQUITIES RALLY SIMILARITIES TO 1999

December 2, 2019: NEW PREDICTED TRENDS FOR SPX, GOLD, OIL NAT GAS

Technical Analysis is based on the premise that price reflects all news and expectations the instant that news or data is known.  A common term in Technical Analysis is “Bias”.  This is when the price trend is substantially more Bullish or Bearish by nature or expectation.  Bias occurs when investing conditions mostly eliminate risk (for the Bullish side) and opportunity (for the Bearish side).  When traders feel they can enter trades without any real risks (trading Long) or when they feel there is no opportunity for the markets to rally (trading Short), then a BIAS exists in the markets.

When the global markets rotate and volatility extends to much higher levels, the markets change from a “Biased Trend” to what Technical Analysts call “True Price Exploration”.  When this happens, price begins to operate under the price principles of Gann, Fibonacci and Elliot Wave theories where price attempts to rotate to new lows or highs in an attempt to “seek out” clear support and resistance levels before establishing a new longer-term “Biased trend”.

We believe the global markets are about to enter a very volatile period of sector rotation.  Certain sectors may see a much deeper price exploration than others.  For example, consumer product manufacturers focused on US and European markets may see very limited risks compared to the Industrial Supply sector where a global economic slowdown could really hurt their future expectations.

These two Market Sector Maps (source www.Finviz.com) highlight the change in the direction and scope of these changes over the past week and the past 30 days.

THIS FIRST SECTOR MAP IS A 1 WEEK SECTOR MAP

THIS SECOND SECTOR MAP IS A 1 MONTH SECTOR MAP

Pay very close attention to the sectors that were moderately or strongly weak in the 1-month chart and continue to weaken in the 1-week chart (Financial, Property, Telecommunications, Telecom Services, Healthcare, Biotech, Basic Materials, Industrial Goods, Lodging, Resorts, Travel, Hospitality, Food, Packaging, Textile.  The list is rather impressive and it suggests this Coronavirus has somewhat panicked the markets and consumers.  Yes, many of these consumers will continue to go out for food, entertainment, and other essentials – but what if 15% to 25% of them cut back on these activities and decide to stay home more often and watch movies or play games?

I remember in 1990 when Desert Storm started.  Just before this war started, the US economy was clicking right along.  I remember that within 10 days of the war starting, things started to change on the roadways and markets.  I also noticed a change in consumer spending with a friend’s computer gaming distribution company.  All of a sudden, consumers slowed their external purchasing activities and focused more on protectionist activities.  We believe this same type of event is going to quickly unfold within the US and other nations as this Corona Virus extends over the next 30+ days.

This is why I believe the volatility of price and market sector rotation will continue for at least 60+ days as the globe attempts to contain and eliminate the risks associated with this virus.  We understand the risks in the US and Canada are very small at the moment, but that has not stopped shoppers from emptying the shelves at the local hardware and pharmacy stores for “surgical masks” and supplies.  Trust us, people are already well into the protectionist-mode and are preparing for what may happen over the next 30+ days.

This creates an opportunity for technical investors and traders.  This potential for deeper price rotations and extended opportunities resulting from an end of bias volatile price exploration allows us to target very quick and exciting trades.

In part II of this research post, we’ll highlight three specific sectors we believe are poised for great trade setups as a result of the volatility and rotation in the global markets.  Join us in our quest to create incredible profits from these bigger trends – visit www.TheTechnicalTraders.com today.

Chris Vermeulen

Corona Virus and Manufacturing Shutdowns Will Affect Companies

A technical trader talks about this week’s large price swings, Coronavirus, and how to trade this volatility.

Get Chris Trade Alerts and Stay Ahead Of This Market – JOIN HERE

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.

Transportation Sector Crashed Hard and What it Means

The Transportation Index, a common measure of economic optimism or pessimism, collapsed very early in trading after the Martin Luther King holiday (January 20, 22020).  We found this very informative because a rotation like this suggests optimism may be waning by global investors and future expectations of growing economic activity may be reverting to more realistic expectations headed into a US election year on top of the US political circus.

When we take a look at these TRAN charts, below, pay very special attention to the historical upper range of price activity over the past 20+ months and you’ll see why we believe a top formation/setup near these current levels in the TRAN could be a very strong topping pattern for the US and Global markets.

DAILY TRANSPORTATION CHART

This Daily Transportation chart highlights the immediate rotation that is setting up a sideways price channel.  The range between 11,250 and 10,450 has established a moderately strong sideways price channel going back well over 3+ months in the Transportation Index.  The broader price channel, between 11,250 and 9,700, extends well over 8+ months.  Beyond that, we have a rotation going all the way back into 2018, between 11,600 and 8,650, that establishes a very broad sideways price channel.

The Transportation Index has been trading within this sideways price channel over the past 20+ months as global investors attempt to determine the future expectations for the US and global economies.  If global investors believe the economy will accelerate as consumers become more active, then the Transportation Index will rise above the 11,800 level on an upside breakout move.  If global investors believe the US and global economies will contract before experiencing any further advance, then the Transportation Index will likely fall to levels below 10,400 – possibly lower.

The recent downside rotation in the TRAN suggests global investors and skilled traders are not expecting the economy to continue as it has over the past 6 to 12+ months – as the US stock market.  The melt-up in the US stock market was a result of global capital attempting to take advantage of a stronger US Dollar and continued price appreciation in the NASDAQ and various US stock sectors.  Even though the underlying economic data and fundamentals may not have changed, it was still advantageous for global investors/traders to play the “melt-up” because it provided the opportunity to gain on two fronts – US Dollar gains and US share price gains.

If this massive “capital shift” trade is unwinding, in part or in full, then we will start to see weakness in the Transportation Index and likely the Mid-Caps as global investors try to pull away from risks in the US stock market.  If the Transportation Index falls below 10,450, then we need to get ready for a potentially bigger downside price move across the global markets.

WEEKLY TRANSPORTATION CHART

This Weekly TRAN chart highlights our Adaptive Fibonacci price modeling system which has drawn the GREEN and RED “trigger levels” above and below the current price action.  It is doing this because the TRAN price action has not defined any real price trends recently – staying within the sideways price channel.  The price must either rally above 11,450 to begin a new bullish price trend or fall below 8,990 to initiate a new bearish price trend.  That means a downside price rotation may support a -2000 point decline from current levels before initiating a continued downside Bearish global market trend.

It is time to really start paying attention to what happens with the Transportation Index.  First, we have to watch the 10,400 level.  Then we have to watch the 9,700 level.  If both of those fail, then we have to watch the 8,990 level as the final “trigger level” for a new global market bearish trend. We are a long way away from that moment right now, but it appears the Transportation Index has started to revert back to the downside and we are alerting our friends and followers to be aware this rotation may be a very timely warning of a new global market top in the making.

UTILITY SECTOR WARNS OF BIG MONEY
IS EXITING THE MARKET

Utility stocks have been on fire ripping to the upside and they tend to lead precious metals and then bonds so I am starting to get excited for our portfolio.

We locked in 10% the 3rd quarter of our SSO position today, we still have 25% of that initial position left but our exposure to equities is now very small. All the other asset classes like high yield bonds, gold, and utilities are pointing to a correction in the stock market.

You can see which markets do well at various stages of risk in the market using our custom market gauge we have been developing. This is one of the new trading tools have been working on.

This gauge will automatically update live with the markets using all of our analyses. Its a really exciting new tool we plan to make available in the next 30 days for our subscribers.

BIG MONEY FLOW GAUGE
20-40 DAY MARKET PRICE CYCLE

TheTechnicalTraders.com Market Gauge

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Chris Vermeulen
www.TheTechnicalTraders.com