Predictive Modeling Suggests Gold Will Break Above $1650 Within 15~30 Days
by ilene - February 13th, 2020 10:34 pm
Courtesy of Technical Traders
Our Adaptive Dynamic Learning predictive modeling system is suggesting Gold will rally above $1650 within the next 2 to 4 weeks, then settle into a narrow price range above $1600. If you’ve followed our analysis of Gold over the past few months and years, you already know we expect Gold to rally above $1750 this year and to continue to move higher attempting to breach the $2100 level. It is just a matter of time as far as we are concerned where Metals begin a massive upside rally as the global debt markets become an issue throughout the world.
Right now, there is a very clear opportunity for Gold to rally nearly $100 over the next few weeks. Our ADL predictive modeling system is suggesting this really should begin very soon and will likely propel the price of Gold to levels above $1640 before March 15. Of course, as we’ve seen before if price stays below the $1600 level for another few weeks, this will set up a “price anomaly” where the price will, at some point, attempt to rally very aggressively to the upside to make up the difference.
Weekly Gold ADL Chart
This Weekly Gold ADL chart highlights the predicted price movement higher, above $1640, then sideways afterward – setting up a new momentum base. You can see how Gold enters rally phases, then bases for 5 to 10+ weeks. We believe this next move higher will be a continued advancement leg in Gold that may prompt a short momentum base before another rally sets up near April/May 2020.
Monthly Gold ADL Chart
This Monthly Gold ADL chart highlights our overall trend expectations for Gold going out 8+ months into the future. We believe this upside price rally is ultimately targeting levels above $1800. It will likely attempt this move in multiple upside price legs containing various pause/momentum basing events. Yet we believe the ultimate upside objective in Gold is really $1800 to $1850 before a new downside leg will setup. That downside leg will end fairly quickly, then the next wave of buying will push the price above $2100 and ultimately much…
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Shipping Rates Plunge, Commodities and Stocks May Follow
by ilene - February 13th, 2020 4:21 am
Courtesy of Technical Traders
An almost immediate reaction to the Coronavirus outbreak in China and throughout most of the world has sent shock-wave through the global markets – particularly seen in Shipping and Oil. The actions within China to attempt to contain the virus spread include shutting down entire cities and setting up mass quarantine events. It is estimated that as many as 8+ million people were quarantined within cities in China throughout the Chinese New Year.
Chinese President, Xi Jinping, warned recently that the Coronavirus, and the efforts to stop it, may greatly reduce the Chinese economy over the next few months. The Chinese President urged top officials to refrain from “more restrictive measures” to contain the virus. It is our opinion that more restrictive measures are essential to efforts to contain the spread of this virus and that further contraction in the Chinese economy, as well as other economies, are almost set in stone at this point.
Information we’ve received from some friends living in China and Hong Kong suggest travel is very restricted, face masks are very scarce, people are staying inside their homes and surviving as family units within very close contact with one another. They are scared, trapped and unable to do anything other than try to wait this out. Imagine what this is doing to the local economies, shops, offices, and businesses?
Reflectively, global shipping rates have collapsed over the past 30+ days as one of the first signs of the contraction in the global markets. As of December 31, 2019, both Tanker and Dry-Bulk rates were hovering near $14,000 per day. Now, this rate is near $2500 per day – a -82% decrease. As you consider the broader aspects of this massive decrease in shipping rates, consider the global contagion event that may setup if the Belt-Road region is adversely hit with the Corona Virus.
Source: Bloomberg.com
SEA Shipping Sector ETF – Daily Chart
Shipping stocks are taking a beating. Factories are shut down, the product is not being shipped, and even product ready to be shipped many don’t want to…
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Stock Market Sector Rotation Should Peak Within 60+ Days – Part II
by ilene - February 10th, 2020 10:37 pm
Courtesy of Technical Traders
The first part of this article highlighted what we believe is the start of a broad market sector rotation setup in the US and global markets. This second part will highlight what we believe are excellent examples of sector trade setups for our friends and followers.
As China continues to pour capital into their markets to stabilize the outflow and fall of asset prices, a number of interesting components of broader sector rotation are setting up. First, the US stock market has rolled lower in what we are calling a “first-tier” of the “waterfall event”.
Additionally, Mid-Caps, Transportation, Energy, and Financials have all started to roll-over of already begun to rotate lower. We believe the contraction in economic activity and global market engagement as a result of the Wuhan virus will result in a much bigger and broader downside price move than many are expecting in the coming weeks.
The death toll for the Coronavirus outbreak reached 910, surpassing the number that died in the 2003 SARS episode. This is causing huge issues with global supply chains and shipping companies as I talked about last week in my HoweStreet Interview.
We believe traders need to be aware of the continued capital shift that has been taking place over the past 4+ years. As foreign markets struggle and the US Dollar continues to strengthen, capital has been moving into the US stock market as a protective measure. We believe this will continue throughout the virus event, yet we believe the US stock market will contract, move lower, as a result of this virus event as well.
Many US companies are still exposed to foreign markets through overseas engagement and retail locations, Automakers, consumer products, manufacturing, heavy equipment and dozens of other sectors derive 5% to 25%+ of their revenues from China and other overseas markets. MacDonalds, Starbucks, Caterpillar and dozens of other US companies have broad exposure in China and Asia. We believe this virus event could last well into July and possibly much longer. Because of this, we believe a broader market sector rotation will take place and that volatility will continue to increase over the next 6 to 12+ months.
Here are the three sectors we believe have a strong potential for setting up a fantastic trade. Follow our research to learn more about what we do and how we can help…
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How and When to Enter Day Trades & Swing Trade For Maximum Gains
by ilene - February 10th, 2020 12:01 pm
Courtesy of Technical Traders
Another interesting session for stocks and commodities and it allows me to share a day trading secret with you as well. This secret not only is a gold mine for day traders but it also helps with timing your entry and exits as a swing trader.
Today stocks opened lower and during pre-market hours it was looking really bearish, but once the 9:30 opening bell rang buyers flooded the market and drove the prices higher all session forming the typical intraday price action that happens during strong trending days.
I did a video on this year ago which I’ll share the link but take a look at today’s intraday price action, then watch this video as its a day traders DREAM – FREE MONEY!
TODAYS SP500 INDEX CHART:
NORMAL INTRADAY PRICE TENDS DURING STRONG MARKETS
Join my Swing Trading ETF Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.
Chris Vermeulen
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.
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Corona Virus and Manufacturing Shutdowns Will Affect Companies
by ilene - February 5th, 2020 10:15 pm
Courtesy of Technical Traders
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
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Inverse Energy ETF AT Breakout Level – Could Rally Further
by ilene - February 4th, 2020 10:21 pm
Courtesy of Technical Traders
Following up on an exciting article we shared with friends and followers on January 17, 2020, it appears ERY has reached the first stage for profit taking with a fairly strong potential we may see this rally continue even higher. Please review the following repost of our original research and analysis of ERY back in early January.
January 17, 2020: ENERGY CONTINUES BASING SETUP – BREAKOUT EXPECTED NEAR JANUARY 24TH
ERY Bear Energy ETF – Weekly Chart
At the time we authored this ERY article, our team of dedicated researchers believed that Oil would retrace from recent highs near $65 and continue to move lower – targeting the low $50 to mid $40 price level. Our expectations were that a move in ERY from near $39~$42 to an initial target level near $55~$57 would be an excellent opportunity if Oil broke lower. You can see the CYAN Fibonacci projected target level that aligns with our original target price level on this chart below.
ERY Bear Energy ETF – Daily Chart
Currently, we believe this current target level has been successful and urge any friends and followers to pull at least 50% of your profits at this current level. If you decide to allow the rest of your position to continue, stops should be moved to levels near or below $52. We believe the continued upside potential for this trade is still valid with a secondary target above $67~$75. Trail your stop with every new weekly high and look to start exiting this trade on any price tick above $67 or $72.
ERY Bear Energy ETF – Weekly Chart
Some resistance may be seen between $56 and $61. There are historical price peaks near these levels that may act as a price boundary throughout this rally. Once the $64 to $65 level is breached, ERY should continue to rally…
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Are We Setting Up For A Waterfall Selloff?
by ilene - January 29th, 2020 10:57 pm
Courtesy of Technical Traders
Most traders understand what a “Waterfall event” is if you’ve been trading for more than 3 years. Nearly every downside price reversion event initiates in a breakdown event (the first tier of the waterfall event) which is followed by additional deeper waterfall price collapses. Almost like price breaks lower, finds support, settles near support, then breaks lower targeting deeper price support levels.
SPY Daily Chart
This example SPY chart from October 2018 through December 2018 highlights this type of event almost perfectly. With each tier in the waterfall event, price searches for new support levels as price weakness drives price lower throughout each breakdown event. We’ve highlighted these breakdown events with the MAGENTA lines drawn on this chart.
The recent downside price rotation after the world was alerted to the Wuhan virus presented a very clear “first-tier” waterfall event. This first move lower is often rather condensed in size and scope – yet often within days of this first event, a bigger second downside waterfall event takes place confirming the bearish breakdown has momentum. We believe this first move lower could be the first real tier in a broader global market waterfall event which may result in a much deeper price reversion event.
We believe the total scope of the Wuhan virus will not be known for at least another 20 to 30+ days. After that span of time, we’ll know where and how aggressive this pandemic event has spread and what real capabilities we
have for containment. Therefore, we believe the downside price concern within the global markets is very real and
just starting.
Very much like what happened in October 2018, the initial downside price move initiated on the US fed news and expectations. When the Fed announced a rate cut, which shocked the markets, investors waited to see how the markets would react and within only 5+ days, the markets reacted violently to the downside.
Friday, January 24 was the “trigger date” for the breakdown in global markets from the news of the Wuhan virus. We believe any further downside risk to the global markets will be known within another 5 to 10+ trading days – as more information related to the spread and containment capabilities of the virus are known. …
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The Wuhan Wipeout – Could It Happen?
by ilene - January 24th, 2020 10:48 pm
Courtesy of Technical Traders
News is traveling fast about the Corona Virus that originated in Wuhan, China. Two new confirmed cases in the US, one in Europe and hundreds in China. As we learn more about thispotential pandemic outbreak, we are learning that China did very little to contain this problem from the start. Now, quarantining two cities and trying to control the potential
outbreak, may become a futile effort.
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+…
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January 2018 Stock Market Repeat – Yikes!
by ilene - January 23rd, 2020 10:07 pm
Courtesy of Technical Traders
Our research team caught a very interesting price pattern that correlates with the Put/Call ratio. We are alerting our friends and followers with this research post of this exciting, yet unconfirmed, set up today.
In late 2017, the US stock market rallied from July through December with moderately low volatility throughout this span of time. Near the end of 2017, the US stock market price activity stalled, then began a renewed price rally in early 2018 (see the first BLUE & YELLOW BOX on the chart below). Then, in January 2018, a very broad market reversion event took place which ultimately resulted in a very broad market correction in October through December 2018 of just over 20%.
The current price rally ending 2019 and starting 2020 is strangely similar to the price setup that occurred in 2017 and
2018. We’ve seen a broad “melt-up” price pattern over the last 5+ months of 2019 with moderately low volatility. We experienced a moderate price “stall” near the end of 2019 and experienced a broader renewed upside price rally in early
2020 (see the second BLUE and YELLOW BOX on the chart below). We believe this could be a setup for a potential price reversion event in the near future – all we need is confirmation of the downside price rotation to take place.
A deeper price reversion event at this price level that equals the previous reversion event would push the SPY price towards the $265 price level – a 68 point price drop. If such an event took place, we would be looking at a -15% to -25% potential price correction from current levels.
Let’s take a look at other charts and data that may confirm our research…
Weekly SPY (S&P 500) Index Chart – Jan 2018 and Jan 2020
Weekly VIX Chart
This Weekly VIX chart highlights the consolidation of volatility that set up in late 2017 and late 2019. Pay special attention to how broadly the VIX spiked in early 2018. This spike happened because of the consolidation of volatility near lower extremes over the past 16+ months. Given…
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TRADING STRATEGIES FOR GDXJ, SPY, BONDS, AND NATURAL GAS
by ilene - January 22nd, 2020 7:44 pm
Courtesy of Technical Traders
Chris Vermeulen joins me today to shares his trading strategy for 4 different markets. While most of these markets are not correlated he has reasons for why he is long in each. Pick and choose where you want to deploy your capital.
Get Chris’ Trade Signals Today – Click Here
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.