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Metals & The US Dollar: How It All Relates – Part I

The recent movement in the precious metals markets, an incredible 33% upside price move since August 2018, has reflected an increased level of fear and greed throughout the global markets.  Particularly, throughout the foreign markets.  Precious metals, specifically Gold, has skyrocketed to some of the highest levels in recent times as foreign currencies devalue against the US Dollar.  Still, consumers, institutions and central governments/banks are buying as much as they can right now.

12 Month Capital Shift Seen in Currencies

As we have been suggesting over the past 12+ months, a capital shift continues to play out in the global markets where capital is actively seeking the best, most secure locations for investment and we believe that will result in strength in mature global economies.  Take a look at this chart of various foreign currencies to understand how this capital shift process is really playing out across the globe. Be sure to opt-in to our Free Trade Ideas Newsletter.
Japan, Canada, Switzerland are all experiencing moderate price weakness against the US Dollar – yet these mature economies are fairing better than many others.  The relationship between the EUR and the GPB appears to be relatively stable as both currencies have dramatically weakened over the past 16+ months – almost in perfect alignment.  Comparatively, the other currencies within this display have experienced dramatic price weakness over the past 4+ years in relationship to the US Dollar and their associated PAIR currencies.

Gold Price Comparison In Other Currencies

The recent upside price move in precious metals exasperates the issue of localized consumption/acquisition of Gold/Silver as pricing pressures continue to push local pricing higher and higher.  We are still very early in the bullish price cycle for precious metals.  As increased fear and greed enter the markets over the next 15+ months, we believe the scramble to acquire physical metals and market positions will continue to increase even further. These Gold Price Comparison charts, below, show just how dramatic the upward price move has been for foreign investors in local currencies.  In US Dollar terms, Gold has risen just over 33% (approx: $350 USD).  In Canadian Dollar terms, it has risen 30% over the past year (approx: $475 CAD).  In Australian Dollar terms, it has risen just over 34% (approx: $590 AUD).  In Chinese Yuan terms, it has risen just over 36% (approx: $$2,965 CNY).  In Indian Rupee terms, it has risen just over 29% (approx: $2,545 INR).  The reality is that precious metals have gotten very expensive for foreign investors in local currencies – and this is just starting to the metals rally.
The primary reason for this is the continued capital shift that has been taking place over the past 2 to 4+ years.  As the global markets entered a period where commodity prices started collapsing (2014 in Oil), the global markets started shifting away from emerging markets and risky assets/investments.  The hunt for more secure investment sources was on. When Oil bottomed in early 2016, a reprieve in investor sentiment settled into the markets where expansion into more risky assets took place.  All of this changed with the top formation in the US stock market in early 2018 and the downside price rotation in Oil in October 2018.  Now, as precious metals start to rally and clearly illustrate that fear and greed are entering the markets, the continued hunt for secure, mature economic environments continue at a record pace. In Part II of this research post, we’ll highlight why we believe the global markets are just starting a dramatic shift that will likely continue to unfold throughout the next 24+ months and why we believe it is important for all skilled technical traders to understand the risks that are present in the current global markets.  This is not your simple trending global market any longer (think pre-2014) – this is a BEAST. 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. I have had a series of great trades this month. In fact, over the past 20 months, my trading newsletter portfolio has generated over 100% return when compounded for members. And we locking in more profits on Tuesday with the Russell 2000 index. So, if you believe in technical analysis, then this is the newsletter and market condition for you to really shine. Be prepared for these 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. 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. I can tell you that huge moves are about to start unfolding not only in currencies, metals, or stocks but globally and some of these supercycles 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

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Chris Vermeulen – www.TheTechnicalTraders.com

Sector Rotation Giving Mixed Signals About The Future

It seemed the markets wanted to make a point to alert us that volatility may be here to stay very early in trading this week.  After a fairly flat overnight session with very little price volatility, the markets opened up to a moderately large price rotation (first downward, then back higher) before settling into a broader downside move in the early afternoon in New York.  The interesting facet of this move is that it seemed to be related to price valuations and expectations in certain sectors. Before we get into the details, be sure to opt-in to my Free Market Forecast and Trade Ideas Newsletter so stay on top of these market moves. As we’ve been suggesting for many weeks and months, we are not out of the woods quite yet.  The US markets may be subject to more price volatility than we have considered while the continued Capital Shift (foreign capital pouring into the US markets) may also be shifting.  One thing is certain, now is not the time to try to set up positional trades in the market expecting longer-term price trends to set up and run over the next few months.  This appears to be a traders market where skilled technical traders will shine by finding opportunities and executing very skilled and targeted trades for profits. Many months ago we authored an article about the US Presidential election cycle and how that event plays into market uncertainty and price activity.  We are currently entering the prime span of time where price rotation and volatility because of this election event should take place.  This “price malaise” typically happens about 16 months before the election date.  As we move closer to the elections, the markets typically become much more volatile and enter a period where the price tends to consolidate near recent lows or establish moderate new lows as attention shifts away from the economy and towards the election news. If you are serious about trading, this is when you want to pay very close attention to the various market sectors and understand that opportunities may be very short and sweet for profits.

Mid Cap Stock Index 30 Minute Chart Pattern

This first chart is the MC (S&P 400 Midcap) which shows how price strength in this sector moved against the overall price trend of the ES, YM, and others.  From the start of trading, the MC appeared to have a stronger upside price bias than the other US major market sectors.  This may mean that traders are finding real value in the Midcap sector and are stepping back into this sector thinking it may have some real opportunity for growth.

Transportation Index – 30 Minute Chart

Additionally, the Transportation Index moved higher in a similar structure.  The Transportation Index typically leads the US stock market by 3 to 6 months as an indicator of future price expectations related to the need for trucks, rail, shipping, and other economic-related activities.  More need for shipping/transportation solutions means a more active economy.  A more active economy means more buying and selling of goods, services, and other items.  Thus, if the Transportation Index can break recent high levels and begin a new upside price move, it would be a very clear sign that the US economy is strengthening and that the US major indexes may begin a new upside price move soon.

VIX – Volatility Index 30 Minute Chart

The VIX, on the other hand, is still showing us that price volatility has not vanished quite yet.  The VIX started moving higher early in trading and continues to push a bit higher right now.  If the VIX moves back above 18 or 19 quickly, the we are likely going to see increased volatility in certain sectors of the market which could present real problems for traders.  As long as the VIX stays below 18, then the volatility may stay a bit muted going forward. Pay attention to the VIX and what happens to the major stock indexes over the next 2+ weeks.  Trade accordingly.  This is not your simple, safe trending market any longer.  This is larger volatility with increased risks.
If you are not a very skilled technical trader that understands risks and position sizing, then this market is probably not for you.  This is where you will likely chew through your account trying to run longer-term setups in a very choppy market environment. Volatility is key.  Until the VIX settles back down below 12, we are going to continue to experience bigger, more volatile price rotations.  Some may be as large as 2% or 3% as news hits.  This is why we must understand the risks that are at play here and how to protect our assets from losses.  Remember, you don’t have to be in a trade all the time in order to profit from the markets.  Watch for the proper setups and wait for the proper entry point before this market chews you up and spits you out. 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.com

Price Structure Still Suggests We Are Within Volatile Rotation

This shortened holiday week has been full of crazy price rotation, political intrigue, surprise news events and, we are certain, full of headaches for some traders.  Still, we managed to pull out four consistently profitable trades for our members by sticking to our proven trading systems and deploying effective position sizing techniques.  Not a bad week for us at all. Today, we are writing this research post to highlight that price is still not “out of the woods” in terms of price structure and/or price rotation.  Yes, there was quite a bit of external news that drove prices higher on Thursday and Friday (BREXIT, Earnings, and China decreasing the lending rates as well as decreasing bank asset levels in an effort to prompt more lending).  These news items continue to drive price action and rotation.  The VIX has settled at 15.00 as of Friday – the lowest level seen since early August 2019.  Our opinion is that this is just a brief pause before more chaos hits the markets. The BREXIT news was straight out of a suspense novel.  At the very last minute, a coalition of political interests changed direction in an effort to stop the NO-DEAL BREXIT that seemed to be almost a sure thing.  We don’t have any more information than what is printed in the news publications, but we believe the NO-DEAL BREXIT will happen this year. Earnings were mixed with some interesting surprises.  Jobs data came in relatively strong on Friday with higher earnings and higher working hours, yet job creation levels fell a bit from expected levels. China seems to be relaxing its bank restrictions in an effort to jump-start their local economy.  We read that current debt levels are 300% of GDP in China (and that only accounts for debt that is stated in official economic data).  If one were to include the shadow banking system and corporate debt/bonds, we believe it could be as high as $425% of GDP or higher. Then we have multiple countries in crisis (risk of bankruptcy) where the IMF is likely to try to develop some type of “bailout” solution.  The most recent is Argentina.  Additionally, the IMF has introduced new Cryptocurrency regulations that may stifle some emerging market ICO and existing Crypto operations as the IMF attempt to get a handle on these unregulated threats to traditional currency policies. And we are just scratching the surface so far…  What next – right? Well, here is a Weekly ES chart highlighting the Fibonacci price structure that appears to be, very much, in need of establishing fresh new highs in order to confirm this continued bullish trend.  Right now, very similar to what happened in 2018, we are nearing an October date, near all-time highs, with fresh signs of weakness appearing throughout the global economy.  Trade issues continue, people are talking about recessions and Gold and Silver have started an incredible upside move.  Will the US stock market continue to rally from this point or rollover into a price correction? It all depends on what happens over the next 2+ weeks and if the “capital shift” that we have continued to suggest is driving capital in the US stock market hasn’t broken rank yet.  If foreign capital is continuing to pour into the US stock market for safety, then we may very well see another attempt at new all-time highs.  If the recent weakness has spooked some investors out of the markets as Gold and Silver have caught their attention, then this capital shift may be much more muted at this time – meaning price volatility is much more of a concern.

SP500 Stock Index – Weekly Chart

The ES price will attempt to either move to new all-time highs or roll lower and take out the 2728 level.  We believe the key to this future direction lies in which news items play out over the next 2+ weeks and if the price is able to return back to a “true price exploration” mode (without the news events).

Weekly Transportation Sector Index Chart

This weekly TRAN, Transportation Index, highlights a broader picture of why our researchers are still concerned about a market correction.  The fact that the price peaks have continued to move lower as a series of lower high price peaks is very concerning. This is indicative of a downward price trend or a trend that is consolidating lower.  The strength of support near 9695 is the only real strength we see in this TRAN chart in terms of “support for an upside move”.  The TRAN chart price must break this downward series of lower price peaks in order for the US markets to really enter a new bullish price trend.  Until that happens, we continue to stay worried that the foundation of the US markets may be crumbling below our feet while the party rages on in the US major indexes.

CONCLUDING THOUGHTS:

Our August 19th prediction of a breakdown event has obviously been invalidated by this recent upside price move.  Depending on which way price breaks out of pattern will either validate or invalidate our expected forecast. As of right now, it looks like our August 19th prediction has been invalidated and we were wrong thinking it would break down. With that said, we had three winning trades we closed out last week for solid profits and a new high water-mark for our trading portfolio. Although, until the US stock market rotates higher to establish new all-time highs, we are not out of the woods yet.  This recent upside price move has not completely invalidated the chance of a breakdown because we have not already validated “new price highs” which are required in Fibonacci price theory.  Right now, we are in the midst of volatile price rotation and we are loving every minute of it. This is the type of price action that is perfect for skilled technical traders.  Trade setups continue to pour into our systems.  As we stated near the top of this article, we had a series of great trades this week resulting in nearly +15% total profits for our members.  If you are a skilled technical trader, then this is the market for you to really shine. Be prepared for these 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. 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. Join Now and Get a 1oz Silver Round or Gold Bar Shipped To You Free. I can tell you that huge moves are about to start unfolding not only in currencies, metals, or stocks but globally and some of these supercycles 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.

FREE GOLD OR SILVER WITH SUBSCRIPTION!

Chris Vermeulen – www.TheTechnicalTraders.com

US Stock Market Hasn’t Cleared The Storm Yet

As much as we would like to report that the US Stock market has recently cleared the future concerns of a global economic recession as well as expanded into a new growth phase, we simply can’t make that claim give the data we are seeing from our proprietary price modeling systems.  Overall, this final quarter of 2019, and early into 2020, may shape up to be a very volatile period in the global markets. Before we get into the details, be sure to opt-in to my Free Market Forecast and Trade Ideas Newsletter so stay on top of these market moves. Recently, we posted a research post highlighting the price structure of the ES and TRAN charts that continue to suggest price weakness is still driving overall price rotation.  The TRAN chart is very telling currently as it shows much more substantial price weakness in comparison to the ES, NQ, and YM charts.  We believe the continued price strength is seen in the ES, NQ, and YM charts is related to the continued “Capital Shift” where foreign investors are still pouring capital into the US markets believing they are the safest and most secure investments for the future.
The divergence between our custom indicators and market analysis tools in relation to the support in the US major markets (the ES, NQ, and YM) continues to present a very interesting dynamic regarding the future expectations of true price value.  Either the US major markets are overvalued in relation to price weakness shown by other factors (our custom indicators and modeling systems) or our custom indicators are undervaluing the strengths of the “capital shift” process that is taking place throughout the globe. In our opinion, the single most important aspect of true technical analysis and price structure is that price MUST confirm a renewed upward price trend/bias before we can consider the risks of a price correction invalid.  At this time, we don’t believe we are “Out Of The Woods” yet in terms of identifying this type of upside price validation – let’s take a look at some charts. This Custom Smart Cash Index Weekly chart highlights the recent upside price swing related to the multiple news events from last week (BREXIT, China & Earnings).  We can see how price briefly broke through the lower channel of historical price trends and appeared to be setting up a potential breakdown event.  Yet, the news items last week resulted in a “reprieve” upside price move that pushed our Custom Smart Cash Index back into the lower channel range. Obviously, this move does not constitute a new Bullish price trend based on the data from this chart.  We have yet to break the downward price cycle, highlighted by the BLACK trend line, as well as the Price Weakness Zone, highlighted by the RED SHADED area.  Ultimately, if the global markets were to break this downward price channel to the upside, then we would have some technical confirmation that a new bullish rally is really taking place.  As of right now, we don’t have that type of confirmation.
This Custom Price Volatility Channel Index Weekly chart highlights another concern we have related to the future capabilities of any real upside price move.  Remember to keep in mind the data from the Smart Cash Index chart as we move forward through this analysis. The Custom Price Volatility Channel Index chart is showing that price has “recovered” back into the normal price range zone (the center green zone).  In fact, the upside move last week put this Custom Volatility Index value into the upper “normal” price zone and into a “Weakness Channel” which is where early price “topping” formations typically occur.  The Extreme Peaks level is where the ultimate high price top happens.  The Weakness Channel is where price initially runs into the first levels of resistance and begins to become more volatile – at least recently. We’ve highlighted a number of deeper price rotations in MAGENTA that shows what we believe may be setting up in the US/Global markets right now.  In the past, we’ve witnessed these types of “brief recoveries” in the Volatility Channel Index a number of times just before a deeper price move breaks out pushing the price towards an ultimate low price rotation. You can see the first example of this in February 2018, where a very deep low price level was reached, followed by a reprieve, then another attempt to reach new lows in April 2018 (the ultimate bottom).  And again in October 2019 as the price began the downside move that ended near Christmas 2019.  The initial downside move pushed the Volatility Index very near to the lower price channel levels, then a brief reprieve happened, then another deeper price move toward the ultimate low/bottom.  This pattern continues even with the minor price rotation in April 2019.  The initial downside move reached into the lower volatility zone pauses then rotates back into the lower zone to set up the “ultimate bottom” in early June 2019. What will this current rotation look like if it follows the same pattern?  From these current levels, it would have to collapse back into the lower price channel (possibly below it) and would attempt to setup an “ultimate price bottom” at some point in the future? This begs the question – are we just starting a bigger breakdown event?
The VIX, S&P Volatility Index, Weekly chart continues to tighten below 20 – which is an extremely high level historically for the VIX.  In the old days, just a few months back, we would consider a tight VIX somewhere below 11 or so.  Now, it is below 15~20.  Volatility is certainly increasing as price range and rotation have increased. Still, our proprietary Fibonacci Price Amplitude Arcs suggest a major inflection point is set up to happen near the end of September (the week of September 30).  These price amplitude arcs are based on a combination of Fibonacci price theory and a Nikola Tesla theory called “Mechanical Resonance”. Tesla’s theory was that all things operate as energy and because of that – all things have a natural resonant frequency and amplitude level.  If we are able to tune into that frequency and amplitude level, then we will be able to harness the power of that item and the associated items around it.  This is because all things are related to the energy produced by surrounding items.  It may be tough to understand right now – but try to think of it as the “hidden resonant frequency and amplitude of price action”.  Look at the arcs on this chart and try to see how the peaks, trends, and troughs align very closely with these arc levels. What this means is that September 30 is setting up to become a potentially big inflection point for the VIX/major markets.  Prior to that time, we would expect the VIX to prepare for this inflection point by attempting to “base” near true levels.
Lastly, our Custom Metals Index Weekly chart.  A number of technical conditions are setting up in this chart – first, the resistance near 68 has set up a double-top pattern.  Thus, if metals continue to push higher, once this chart breaks the 68 level, we could see a very big move to the upside.  Second, the Fibonacci Price Amplitude Arcs are continuing to align with the September 30 inflection point.  Therefore, we have further evidence that the end of September could become a very interesting opportunity for skilled technical traders.  Lastly, we believe the upward slope highlighted by the GREEN trend line is the key support level for this Custom Metals Index.  Therefore, looking for opportunities to find new Long Entries near or below this level would be ideal. If our analysis is correct, precious metals will continue to rally well into the end of 2019 and into 2020.  Timing these trades are critical.  The volatility of the metals markets has increased by nearly 100% from earlier this year.  This means bigger risks and bigger profits as the price range has nearly doubled in the average range.  Pay attention to these opportunities as they set up and please be cautious of “loading up” because of any one trigger.  This is a market where skills, risk management, position sizing and timing your trades are going to make a big difference for you.

CONCLUDING THOUGHTS:

In closing, we believe we are not out of the woods just yet.  We believe the price movement near or after September 30 will be key to understanding what will happen throughout the remainder of 2019 and into 2020.  If our analysis is correct, we believe the price trend set up on or after the September 30 inflection point will prompt a very big price move in the global markets. Play it safe right now.  Don’t get over-confident in your trades and learn to manage your risks accordingly.  It is very likely that we are going to see a bit of price consolidation, possibly into a Pennant/Flag formation, over the next 15+ trading days as we near the September 30 inflection point.  At this point, we have to wait and watch what happens next and watch for any early warning signs across the markets (like the Transportation Index). 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. 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. Join Now and Get a 1oz Silver Round or Gold Bar Shipped To You Free. Before we get into the details, be sure to opt-in to my Free Market Forecast and Trade Ideas Newsletter so stay on top of these market moves. I can tell you that huge moves are about to start unfolding not only in currencies, metals, or stocks but globally and some of these supercycles 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. 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.  If you want detailed trade signals complete with entry, targets and stop, join our trading newsletter today.

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Chris Vermeulen – www.TheTechnicalTraders.com

Can Oil Stay Above $50 To Support Producers Expectations?

Recent news suggests that oil producers are attempting to increase production levels after failing to attempt to push prices higher by cutting production levels.  Globally, oil producers want to see oil prices rise above $65 ppb in an effort to support profit and production cost expectations.  The real issue for the nation/states that rely on oil production/sales is that the global economy may not cooperate with their expectations over the next 24+ months. Before we get into the details, be sure to opt-in to my Free Market Forecast and Trade Ideas Newsletter so stay on top of these market moves. On August 6th, 2019, we posted this article suggesting that Natural Gas and Crude Oil were setting up diverging trades. August 6th, 2019: NATURAL GAS AND CRUDE OIL – DIVERGING SETUPS FOR TECHNICAL TRADERS At that time, we wrote that we expected Crude oil to break lower from the $62 ppb level and target $55, then $49 based on our original Crude Oil research from May 21, 2019. Additionally, on July 29, 2019, we authored and posted this article suggesting that Crude Oil would begin a downside move from $55 to levels near $50 : All of this research was related to our Adaptive Dynamic Learning (ADL) research post from July 10, 2019: https://www.thetechnicaltraders.com/predictive-modeling-suggest-oil-headed-much-lower-by-early-2020/ This incredible predictive modeling research suggested that Oil would move dramatically lower towards the $50 level, then stall near $50 to $55+ through September and October.  Ultimately breaking lower in late October/November to levels near or below $40.

Crude Oil Daily Chart Analysis

Our researchers believe Crude Oil could become very volatile as price nears the apex of the Pennant/Flag formation that is setting up.  This Daily chart highlights the attempted “scouting party” price rotation above the price resistance channel.  The news over the past holiday weekend suggests the global economy may not see any real bump in activity over the next 12+ months and we believe this aligns with our longer-term research that Oil should target the sub $40 price level before the end of 2019 and potentially fall to levels below $30 in early 2020.

Crude Oil Weekly Chart Analysis

We believe the key to all of this price rotation is the $50.50 level and what price does over the next 30 to 60+ days.  There is a potential that price may attempt a brief upside move over this span of time, but the true intent of price is to move lower based on our ADL price modeling system.  Therefore, we believe the downside potential is the most opportunistic for traders.  The next price target based on our Fibonacci bearish price trigger level is the $45 price range.

CONCLUDING THOUGHTS:

This move could take place quickly, over the next 2 to 3 weeks on a breakdown move, or over many months.  Watch the $50.50 level as that is the key.  If the price falls to any level below $50.50, then we could be moving towards the $45 level or even the $40 on a big move related to global economic expectations.  Otherwise, expect the price to move towards the $50.50 level over the next few weeks as this support level is key to all future moves. As we wait for the next leg to start to move prices lower, pay attention to any upside price activity as that may present a very clear entry point for skilled technical traders. 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.com

Surprise decision in the UK to thwart a No-Deal Brexit changed the dynamics of the markets.

Our August 19th prediction of a market breakdown, as well as our continued research suggesting a breakdown in price was the most likely outcome, is a combination of technical analysis, predictive modeling and our understanding of the market dynamics at play throughout the world.  But, when news like this hits (global economic news, surprise news announcements or any type of positive or negative massive news event) the dynamics of the global markets can shift quite suddenly which we want to explain here. Before we get into the details, be sure to opt-in to my Free Market Forecast and Trade Ideas Newsletter so stay on top of these market moves. Just a few days ago, it appeared that the US/China trade deal was still 30+ days away from any type of continued discussion and the UK Brexit was likely to take place this week and next.  With US earnings season setting up in September, headed into the holiday season throughout the globe, we believed the downside price move probability was far greater than the upside.  Then, out of almost nowhere, the No-Deal Brexit deal is sidetracked and the British Pound rallies dramatically on the news. This Three-Hour British Pound Chart highlights the dramatic price reversal that took place late yesterday (after markets) and resulted in a news-driven price move that was unexpected.  The way these types of new events can come out of nowhere to dramatically alter price direction and trend is something that all traders have to deal with.  For a technical trader, these events, thankfully, don’t happen all that often.  But when they do happen, we have to readjust our understanding of the markets and dynamics that are taking place throughout the global financial environment and follow the money and potentially new trends against our current analysis.
With the news that the BREXIT is on hold right now and is being blocked by a certain segment in the UK Parliament, how will that result in new dynamics and opportunities for us to take advantage of and profit from? Obviously, currencies will continue to move until price levels settle near proper expectations – same thing with the global stock markets.  It is very likely that the US Indexes (ES, NQ, YM, and others) may attempt to move back towards recent highs if the fear and uncertainty of the BREXIT deal warranted that much pricing pressures in the markets? Overall, when events like this happen, it is often the best decision not to try to chase them right away.  These are reactionary price moves related to news events – almost like a shock-wave which I explain this breakout on the chart is this video analysis.  They are here now, they move the market and they appear dramatic, but they are typically over as fast as they started. This US Dollar chart highlights the downward price rotation that was likely prompted by the BREXIT news last night and may continue as the markets revalue “fear and uncertainty” over the next few days.  It is very likely that true price levels will be established over the next 7 to 10 days as the continued repositioning of assets results because of the change in BREXIT expectations from within the UK.
We need to stay dynamic in how we address these types of market moves and the risks that are persistent.  We can’t know what is going to happen in the governments and governing bodies of the world.  As technical traders, our job is to use our tools and resources to find the best opportunities and to take advantage of them when risks are manageable. We flip directions as the markets flip directions.  All we want the markets to move up or down because this provides opportunities for us to profit. This Dow Jones Industrial Daily Chart highlights just how dramatic the upside move is today and how price is still below the recent highs set near 27,400.  Our August 19th Breakdown prediction is currently invalid based on this upside price move.  We did see a big move lower in early August, but we never saw the continued downside move that we expected.  The cycles were predicting this move would happen, but the global market dynamics (news and other items) have altered the current market perspective.  Must like QE events and other major global events, just because technical analysis or cycles suggest one thing will happen, if there is enough pressure from outside forces to move the markets one direction, then markets will typically relent to that pressure and move into the “path of least resistance”.  Right now, that path is upward.

CONCLUDING THOUGHTS:

We took a series of great profitable trades over the past 4+ weeks while the stock market traded sideways. This week we closed out three winning trades 3%, 6.5%, and 9.88% while most others lost money. As technical traders, our only objective is to protect our assets, find great trades, generate profits and avoid unwanted risks.  We are doing exactly that by managing our position sizes, executing smart trades, creating profits for our members and continuing to seek out the best opportunities in the future. Let this news event play out over the next few days.  Let the markets figure out where price wants to go after all the dust settles.  There will be lots of opportunities for more great trades in the future. 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 – *

BIG PICTURE LOOK AT WHAT IS DRIVING GOLD

Chris Vermeulen, Founder of The Technical Traders joins me to take a look at the precious metals market and assess the other markets that need to be noted. We start with the USD and the recent relationship between the two. Next is the action in silver and platinum as they are playing catch up. Finally, we look at the US markets and the potential of a breakout higher or breakdown and how each of these would impact the PMs. Be sure to opt-in to my Free Market Forecast and Trade Ideas Newsletter

CONCLUDING THOUGHTS:

I 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.com

Rising US Dollar Mutes Metals Moves and Puts Pressures on Global Markets

The Rising US Dollar continues to shift the investing landscape as a stronger US Dollar mutes the price acceleration in precious metals and continue to put pricing pressures on the global economy.  The current levels of the US Dollar Index, above 99, clearly illustrates how the shifting landscape of the global economies has changed.  Prior to 2014/2015, when a minor currency/market crisis hit China and capital controls were installed in China to help reduce capital outflows, the US Dollar Index average price range was between 73 and 90.  Of course, the US Dollar Index weakened in 2008-09 and rotated within this range after 2010 – settling near 80 near the beginning of 2014. Before we get into the details, be sure to opt-in to my Free Market Forecast and Trade Ideas Newsletter So, this impressive rally in the US Dollar throughout the 2015-2016 US Presidential election cycle, as well as the continued rally since the lows near December 2018, is not something that we can simply chalk up to normal price rotation.  Something dramatic has shifted in the global markets since 2015/2016 and the new trend is US Dollar strength. We believe the recent rallies in Gold and Silver related to this US Dollar strength are something every trader should consider relative to the real perspective of the global markets.  Gold and Silver have become extremely expensive in certain foreign markets because of currency price levels and the stronger US Dollar typically mutes price rallies in precious metals.  Therefore, the combination of a strong US Dollar and a rising metals price suggests “this time is different”. We are starting to see news posts of how unique this setup really is in relation to traditional market dynamics. https://finance.yahoo.com/news/gold-breaks-away-emerging-market-103653513.html https://www.msn.com/en-in/money/personalfinance/why-is-gold-suddenly-so-expensive/ar-AAGqZKE?li=AAggbRN https://www.bloomberg.com/news/articles/2019-08-28/gold-gains-set-off-silver-scramble-as-investors-play-catch-up https://timesofindia.indiatimes.com/business/india-business/gold-crosses-record-rs-40000-mark-as-recession-fears-seep-in/articleshow/70892512.cms The reality is that no matter what happens in the US Dollar or other foreign currencies, Gold and Silver are in very high demand as investors continue to pour assets into precious metals – which have quickly become one of the best-performing assets for 2019 and very likely for 2020 and beyond. This Daily US Dollar Index chart highlights the strength of the US Dollar over the past 6+ months.  The ability of the US Dollar to continue to trade above 96~97 and push higher towards the 99 ~ 100 level shows the very high demand for US Dollars throughout the globe and the strength of the US Dollar in comparison to much weaker foreign currencies.  With the expectation of a weakening global economy, trade issues, negative interest rates, and bankrupt nations watching their futures spiral completely out of control, investors are naturally seeking out the strongest, safest assets – and are not seeking the highest potential returns.  This is a shift to safety.
We believe that gold is about to launch into a new upside leg once it breaches our Fibonacci Price Amplitude Arc resistance level near 1550.  The new upside target is $1625 or higher – where $1700+ could be the real upside objective for Gold.  If the US dollar rotated a bit lower after setting the new highs near 99, Gold could explode to the upside on moderate US Dollar weakness.
This Weekly chart of the Gold to Silver ratio highlights what we believe will be the next upside price leg for Gold over the next 6+ months.  We believe the true upside for Gold is 25 to 30% from current levels.  That puts our upside target near $2000 to $2100 near the end of 2019.  If that is the case, and silver continues to rally faster than Gold, then Silver could easily rally 30 to 50% from current levels.
If gold does what we believe is possible over the next 6+ months, then Silver will likely target the $26 price level fairly quickly, then push even higher and attempt to reach levels above $31 to $40 before the end of 2019.  We believe the strength of the US Dollar will continue and the rally in metals will continue as the shifting environment of the global markets continues to drive investors into safety.

CONCLUDING THOUGHTS:

This could be the “once in a lifetime” trade fore those of you that followed our research.  We’ve been warning about this move for many years and have clearly illustrated the breakout opportunities in both Gold and Silver related to the US Dollar and foreign currencies over the past 12+ months. You still have time to get into both the Gold and Silver trade if you believe our analysis is correct.  This move will likely continue for many months into the future – well into and past the 2020 US presidential election event.  The markets wait for no man or woman.  This shift in the global markets is different than 2008-09.  The reason it is different should be clearly evident in the strength of the US Dollar and the early shift in the precious metals markets that didn’t happen in 2008-09.  Something is spooking global investors into metals and we believe we know what it is – the mature credit cycle rooted in foreign market credit/debt exposure/liability. It is our opinion that the falling foreign currencies and lower economic expectations are related to the fact that global foreign markets took advantage of the cheap US Dollar between 2010 and 2014, borrowed like fools and leveraged their economies to the max while never expecting the economic shift to happen quite like this.  Now, with credit and debt piled up in the expensive US Dollar, weak economic and trade data and outlooks and further concern originating from the “grey/shadow banking sector” – we believe the dance has already begun and investors know the tune.  Run into safety – run into Gold/Silver and the US Dollar. 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.com

Understanding Trading Risks Is Crucial For Your Success

This article will most likely open your eyes and see a side of trading you usually don’t think about or possibly don’t understand, even though it is critical for your long term success as a trader and investor. Not many people talk about trading risks and for a good reason. It’s not that exciting to most, and its a real sobering topic because its the reality of trading: trading is risky, and that you need to know how to manage risk appropriately and we don’t know how to do this. Most of us are generally too lazy to want to learn dry/boring subjects, especially when we don’t know much about them in the first place, and I’m guilty of this as well. I urge you to take 4 minutes and read this trading risks explained in laymen terms below. At worst is a good refresher and will make you look at your current positions and see all your capital carries the same risk and if you are positioned for steady growth or potential account implosion if the asset class moves against you.

Understanding Trading and Investing Risk Types

RISK noun ·        1.a situation involving exposure to danger: “flouting the law was too much of a risk” synonyms: possibility, chance, probability, likelihood, danger, … more antonyms: impossibility verb ·        1.expose (someone or something valued) to danger, harm, or loss: There are many ways to define risk and different, disparate types of risk depending on investing in a home, doing business with a bank or investing in stocks, bonds, ETF’s, mutual funds, etc. We know inherently, given my last week’s piece on the increasing amount of foreclosures occurring in the largest cities in the US, where housing has been robust, cities like San Jose, CA, San Francisco, Phoenix, Chicago, etc, that there is currently increasing risk in purchasing real estate at lofty prices and hoping that the market stays hot; that if you had to resell the real estate in the next few years one could get out at a similar price to the purchase price or even higher. Given that we are towards the end of a boom housing cycle, this is probably not a reasonable risk to take, unless of course, one would be in it for the long haul. We call this liquidity risk or also buying an asset at a very high price as compared to its historical prices in a given market. Another risk is if an investor, flush with cash, sat in cash and inflation were to take off or the price of goods and services continue to increase even without rampant inflation. This risk would be defined as purchasing power risk and puts the investor (or holder of cash) in an undesirable position of having their money NOT grow while the cost of goods and services around them grows. This can and does occur even if we are told that inflation is flat. How does purchasing power risk show up? Look at the cost of food in the past few years. How much does it cost to feed a family today? When one has investable cash and does not keep it up with the increasing costs of “living,” this is the real definition of purchasing power risk. If on the other hand, an investor decides to enter into the bond and stock market and invests in the wrong asset class, this is the best-known risk defined as asset class risk. One invests in the fixed income markets, and rates go up and while the coupon may stay the same the principal amount of the investment goes down. Likewise, someone decides to invest in technology stocks, and they go through a correction or decline, then that sector goes down, and one’s investment is negatively impacted. This is a sector or industry-specific concentration risk. Another potential risk asset class or even sector-specific risk is if someone decides to invest only in small-cap stocks because they like the growth rates, and this area of concentration is enticing. However, there is an inherent risk: a) interest rates go up which puts pressure on smaller companies; b) the economy goes into a downturn and these stocks lose value and c) most importantly, they want to get out of these stocks at some point (perhaps due to a and b above) and they cannot get out at a fair price because too many people are selling and there is not enough volume in the stock. Then the problem for the small-cap investor may be getting out of these thinly traded stocks when the correction ensues. This is known as liquidity risk and can have a detrimental effect on the original portfolio value. Perhaps one decides to invest in stocks and decides to appropriately diversify their investment into a longer-term buy and hold strategy and does so with high quality, dividend-paying stocks. This seems like a reasonable investment thesis and one that both institutions and individuals participate in every day. However, what happens when we go through normal corrections or even enter a bear market and have a steady trending downward market. What does one do? Buy more as the stocks are going down? Wait until they seemingly bottom and then put more $ to work? We call this market and price risk, and it is from having $ invested in a down-trending market with no clear plan of getting out and not being sure of what the targets are that one should exercise to get out. Then, as an investor playing in a professional market, you always have knowledge risk and unforeseen surprise risk. Knowledge risk is not knowing the “full” story and investing in a company that you may know little about and what the forward earnings projections are. Some that come to mind in recent time is GE, XOM, BBY, JCP and many others that seemed like very good, quality companies only to announce reorganizations, problems with their business or worse, potential bankruptcy. The unforeseen surprise element, while similar, includes accounting errors (WorldCom), corruption (ENRON), and other factors that an investor may have little to no knowledge of. Other investors like to trade and invest where they have little or no knowledge in emerging markets like Russia, China or Brazil only to surprised when political upheaval, slowing economies, currency risk or other factors can and will hit these markets hard and decimate speculative investor capital. Investing in individual issues or sectors like marijuana stocks, biotech stocks, and country ETF’s can be treacherous and best left up to professionals and analysts who cover these companies, industries, and markets.  

Very important facts about investing:

If you lose 10% on your investment capital, it takes at least 11% to get back to even        If you lose 20%, it now takes 25% just to get back to even If you lose 50%, it takes 100% just to get back to even  

Facts About Growth:

FIFTEEN 5% WINNERS = 107% ROI $500 PROFIT PER/MONTH = 30% ROI WITH $20K ANNUALLY POSITION SIZING = TRADING SUCCESS  

Technical Traders strives to accomplish critical things:

ONE: Make it easy for you to follow our trading suggestions and take the trades. We refrain from using exotic and hard to understand instruments, stocks, or ETF’s that are not readily available and have sufficient liquidity. In other words, we trade things that we can enter (buy) and exit (sell) easily and quickly and do not depend on us getting an exact price. If we take the trade we usually get our order filled within a few cents from our original suggestion, by design, the trade can earn a significant profit. It does not depend on split-second timing like many other trade alert newsletter services. TWO: We are very strict and very aware of position sizing. This is ONE of the most important ways to manage our risk and put the trader/investor (YOU) in a position that if the trade does not work, it will not hurt the overall portfolio too much and, more importantly we typically diversify with other positions at a similar time which diversifies the portfolio and allows you to reap the rewards from other disparate trades. THREE: We have a set goal in mind when we put on the trade. These are well-defined targets as well as STOPS. If the trade works, we know where it is headed and what we will do along the way, usually resulting in taking off part or all of the trade with our targets being reached. If the trade does not work, we are out rather quickly with minimal damage to the overall portfolio. FOUR: We always back up our rationale for why we put on the trade. One only need to watch our pre-market daily videos to get a view of why the trade set-up is occurring and what our expectations of the market are. FIVE: We trade in a wide variety of markets and with a wide variety of instruments, mostly ETF’s that are 1x, 2x, and 3x leveraged. If we have a strong conviction about the trade or a limited amount of capital left to put into a trade, we would instead use a levered 2x instrument, or 3x occasionally because we want to capture the move with some extra juice (leverage) to hit the target and get out. Many of our subscribers have seen us go into SSO or SDS inverse SP500 ETF’s for a day or two turnaround in the markets and experience a 1-3% move. We typically get out on those trades quickly, and YOU have benefitted from the use of leverage. SIX: We like small but quick winning trades knowing that this helps compound wealth in the portfolio. Are you aware that short cab rides (or UBER) are much more profitable for the driver than all of the long runs, say to the Airport? Making a quick profit from a few swing trades lasting 2-20 days over and over is much more profitable than taking a long-term position. Nothing more frustrating than watching a long term position you have had for months or years turn south and give up all the profits. Months of mental stress and risk on your portfolio for little to no gain. Not our cup of tea. SEVEN: We minimize Risk and Utilize Capital efficiently by making precision trades that have a high outcome of success and keeping our powder dry (in cash) while waiting to take advantage of optimal technical set-ups consistent with our approach of finding markets that present an excellent opportunity. If we have high conviction, then we may recommend you use a 2x or 3x levered ETF instrument with ample liquidity to get in and out of the trade. Examples of these would include our recent trade on SDS 2.5% (2 days), UGLD 24% (2 weeks), and plenty of others. Please note that our suggested ETF trade recommendation portfolio from January 1, 2018, to June 30, 2019, produced a 70% return, non-compounded and close to a 100% return if you compounded the trades. However, we did so on a capital base of approximately 50%. Meaning, that we took probably half of the risk a similar, fully participating portfolio in the market (buy and hold) might take. Our capital efficiency was extremely high since we were sitting in a safe asset class, about 50% of the time without incurring risk. Most of the time, the whole portfolio might have been 100% in cash when there was too much uncertainty, and trends were changing. Factor in that there were occasions when we only had 25% or 50% invested and other times when we were fully invested. We guess that we were sitting in cash with part or all of the portfolio upwards of 50% of the time. That also means that we had a BETA of 0.5% to the market (for you technical gurus), and a return on equity probably close to 150% on invested capital during that 18 months which factors out to risk to about 1/3 to ½ less than an S&P 500 index fund, and an ALPHA so high it would be off the charts and our telling you what it is would be far too boastful. I hope this detailed explanation of risk has helped you see risk in a new light and just how vital risk and position sizing are to the long term growth of your trading and investing account. Our Wealth Building ETF Newsletter and our Professional Technical Wealth Advisor Newsletter and Trading Indicator Tools make trading and investing simple, logical, and profitable. With customers from over 182 countries of all types from individual traders with a few thousand dollars to billionaire money managers, we have the markets covered for you. Get our world-class market analysis each day and our low-risk ETF trade alerts today! Chris Vermeulen Founder of Technical Traders Ltd.

Should You Save Your Money, or Invest It?

Money makes the world go around, whether we like it or not. For most of us, it can be difficult to find any extra cash that we can afford to put away each month after we’ve finished paying for things like bills and utilities. However, if you do end up with some extra cash, you might be wondering how you should use it. Is it a good idea to stash that money away for a rainy day, or would you be better off putting it to work in the form of an investment instead? Let’s find out.

The Difference Between Saving and Investing

Both saving and investing are good strategies for your money. The difference is that with saving, you put a small amount of your money aside into a separate location and hold it there to use later. You might not earn anything from your savings unless you happen to have a bank account with a  pretty great interest rate – but you know that the money is there if you ever need it. Saving is usually the right call when you have no emergency funds to fall back on in case something goes wrong in your life. It’s hard to know for certain if you’re going to end up losing your job or getting a bill in the post that you can’t afford to pay. Your savings prepare you for the worst, whatever might happen. Investments, on the other hand, make sure that you’re putting your cash to work for you. With investments, you spend a little money now, to make more in the long-term. Some people even take out small personal loans so that they can get in on the ground floor of investments and gather more wealth over time. You don’t just leave your cash sitting in a different account when you’re investing, you work on making that money grow!

Why Investing is Almost Always the Right Idea

Although it pays to have some savings in an emergency account that you can use when the going gets tough, the truth is that you can always turn to loans if you’re ever hit by a major upheaval in your life. Investing is the only way that you can make the money that you have now worth more in the future. With investing, you:
  • Stay ahead of inflation: If you’re not investing in opportunities to grow your money, you’re actively losing cash over time. This is because of something called inflation. The rate of inflation varies widely, but usually, each year, your cash loses its value by around 3%. On the other hand, if you invest your money and earn a return of around 6%, then you stay way ahead of the curve.
  • Prepare for the future: In order to have enough money to retire, you’ll need to make sure that you’re constantly putting cash towards your future. Fortunately, with investing, you can take advantage of something called compound interest. With compound interest, you invest $100 into a stock or share, and in a year, that share might earn $10. Now, you’ve got $110 in your account. If you continue earning interest at the same rate (10%), then the next year, you earn $11 instead of $10, and the cycle continues.
  • Save on taxes: Another huge benefit of investing your money instead of just saving it is that you can save on taxes. The money you put into a traditional IRA or 401k, for instance, doesn’t get taxed the year that you earn it. Instead, you pay taxes when you withdraw your money later. This can save you some serious cash during the years that you contribute. You can use the money you save to pay off your loans faster and get rid of the extra expenses that could be stopping you from saving and investing more.

Saving and Investing Are Crucial to Your Future

Ultimately, both saving and investing have their own parts to play in helping you achieve your goals in the long-term. The only time you shouldn’t be saving or investing is if you have something else that you need to do with your money right now, like paying your bills. If you’re nearing 30, it’s particularly important to consider investing, because the younger that you get started, the more you’ll earn in the long-term. The stock market generally delivers more benefits than cash in the long-term, which offers a better opportunity for returns on your money. Don’t just leave your cash to stagnate! Do something with it! Chris Vermeulen Founder of Technical Traders Ltd.