Chris Vermeulen

Chris Vermeulen

TheTechnicalTraders.com Chief Market Strategist

Why Most Investment Accounts are Not at All-Time Highs, and How This Trader Just Lost Their Shirt

Why Most Investment Accounts are Not at All-Time Highs, and How This Trader Just Lost Their Shirt

Chris Vermeulen Chris Vermeulen 02.02.2024 17:01
As I write this (Wednesday, January 31st), the market had a strong pullback based on tech earnings and the Fed keeping rates the same. The question I keep getting is if this is a reason to worry and panic or if it is just a dip.Let's take a look at our sentiment chart, a proprietary market analysis tool I developed and one of the most powerful tools I have for swing and position trading. We had a RED bar today, which signals market participants are on tilt and betting on lower prices. As we know, the market generally will bottom and rally once the news-driven emotional traders have finished exiting their positions and/or after they have bet against the market using 2x, 3x leveraged inverse ETFs or put options. This color-coded chart tells us three key things:  When individuals are bearish.When individuals are betting against the market trend with inverse ETFs and put options. When market participants are emotional, worried, and on tilt.As technical traders who FOLLOW the market, plan our trades, and trade the plan, we are mostly free from daily news and gyrations as they are not taken into account for our strategy trade signals. But, with that said, eventually, one of these pullbacks will be the one that breaks the uptrend and starts a new downtrend. At this point,  who are over-leveraged and on the wrong side of the market, making them hypersensitive to every tick on a chart, highlighted in the real trader story I am about to share with you.Quick Market Gain/Loss PerspectiveTo put into perspective the one-day move lower, where the markets are trading, and our CGS portfolio, let me remind everyone that the SPY hit a new all-time high one day ago. The QQQ hit a new all-time high six days ago, and our CGS portfolio hit a new all-time high this week. The SPY has only had a one-day pullback at this point, which is nothing crazy, yet this person is screaming that the sky is falling and is losing their shirt! So, given all the gains and all-time highs we are experiencing, let's flip to the dark side of things and break down an email I just received from a trader. Learning Through Failures, Yours or Someone Else’s Is PowerfulOne of the best ways to learn something is through personal experience or by watching others do things correctly or incorrectly. With that said, let's break this email down and see what we can learn about how dangerous betting against the market is and the emotional mindset that follows.The email below has been shortened and paraphrased to share only the educational points for us to touch on.Email From Trader Who Follows Me:================================VERY DISAPPOINTED with the new QQQ trade. This is my first trade, and you didn't tell us the market was topping.I held substantial exposure to 3x inverse ETFs for the SP500 and Nasdaq and exited those when I received the new QQQ buy signal from you. I took a huge loss on the inverse trades, and now I am taking a loss in QQQ. You made a bad call, Chris, and it likely had to do with you ringing the "bloody Nasdaq Bell" and all the excitement from that.================================Where should we start on this, as there are so many things to address…Let's start with the "Very Disappointed with the new trade" comment. The new QQQ position we entered pulled back a little after entry a few days ago. Undoubtedly, we all want higher prices, but the stock market does not go straight up every day. No one likes trades going against them, but that is part of the game, and you need to deal with it or stop trading.We all want our "first trade" to make money and pay for years of TTT subscriptions and then some, but that will not always happen. We can't judge a strategy by one trade or your first trade. Asset Revesting (CGS) works over time. Don't forget that just two days ago, our accounts were hitting an all-time high. We follow the market trends and manage our positions. If we protect our account from losses, the profits will take care of themselves. It's a simple strategy but very difficult to follow if we don't have proper expectations of the strategy itself and investing as a whole. Without realistic expectations, your emotions will always get the better of you.Let's address the comment about how the market was topping and that I should have told members before entering the trade. This comment confirms a lack of understanding of how the market moves. No one, and I do mean no one, knows when the market is topping or bottoming, and if they tell you that they do, take your money and run in the other direction. I always say to my subscribers and listeners, we don't try to pick tops or bottoms; that's called gambling. Right now, the market is still in an uptrend, and someday, a pullback will start the next downtrend. That may have happened this week, or it could be another 1-2 months out – no one knows until hindsight kicks in. Simply put, a one-day pullback in price does not signal a trend direction.This person said they had substantial exposure to 3x inverse ETFs for the SP500 and Nasdaq and took a huge loss. Now they are losing money with QQQ, and it's my fault. Sigh… Betting huge trying to pick market tops or bottoms is a sucker's game. I actually covered this in great detail in the Jan 24th mentoring session with members. I always tell members that the most successful traders and investors are the ones who watch these mentoring sessions or join live and ask questions. These sessions are included in my investing alert newsletter and are one of the best ways to learn how the market moves and how we manage our positions and mindset. Knowing this person is swinging hard with 3x leverage inverse ETFs during a bull market at all-time highs tells me this person has very little risk or position management. It's just a matter of time before they blow up their account. It could be this year or 20 years from now, but it's bound to happen; it's just a matter of time.I agree with this person that our position is currently down 1.7%. I am also in the trade, as the trade alerts I share with subscribers are the trades I use to manage my money. When will the market sell off? Maybe it sells off and gets stopped out this week, or maybe it rallies for months; who knows. At this point, we are trading with both the long-term and short-term trends, which are both up. I can't help those who can't control their trades or emotions, and the substantial loss this person took had nothing to do with me but rather their own highly leveraged trades.The comment about my bad QQQ call and how it likely had to do with me having fun in New York ringing the "bloody Nasdaq Bell" is a perfect example of how trading without position or risk management will cause severe losses, high stress and can cause even the nicest of people to lash out. I have thick skin, having received many emails, and much worse for 20+ years. And guess what? I can now predict when I am about to get emails like this based on the chart I shared above. The red bars mean people are scared, don't know what to do, and can be unbelievably rude. With that said, I do feel bad for these people who are stuck on the dark side, and that is exactly why I started sharing my analysis and signals.Investing could and should be fun and highly profitable, but if the market has gotten into your head and you lack self-discipline, then you are fighting a battle you won't win. The crappy part is I know exactly what people in this situation are going through. I have been through bankruptcy and lost everything, and have blown up several trading accounts; I have been to the bottom and back several times, and you call me a slow learner because it took three times before I realized if I don't change things, I will never get to where I wanted to be financially.Concluding Thoughts:In short, this article was to share a story and experience with you to help provide basic investing education. If you are an active trader or investor with loose risk and position management skills, then it is very likely that Mr. Stock Market controls your emotions and your trading. If you want to take the first step towards taking that power back, controlling your emotions, and being happier in general, be sure to read this article on personality and take the quiz.And if you want to consistently hit new all-time highs with a simple ETF strategy that has 5-12 trades a year, please take a look at my ETF Trade Alert Newsletter or read my book Asset Revesting.
Understanding Emotions During the Four Market Stages

Understanding Emotions During the Four Market Stages

Chris Vermeulen Chris Vermeulen 29.11.2023 16:01
The stock market, often seen as a labyrinth of numbers and charts, is deeply infused with human emotions. Beneath its seemingly sterile surface, it pulsates with collective hopes, fears, elations, and despairs. Stock prices swing based on a range of economic factors, corporate performances, and global events. However, a critical and often underestimated driver is the collective emotion of market participants. Understanding these emotions during the market's various stages can help investors navigate its treacherous waters.The Four Market Stages and Their Emotional SpectrumEvery market cycle is characterized by a series of stages, each of which evokes distinct emotions. The interplay between emotions and stock market dynamics is intricate. While it's impossible (and arguably undesirable) to completely divorce emotions from investment decisions, recognizing their influence is crucial.Bull Market StagesHope: This is the dawn after a long night. Investors, having weathered a downturn, begin to see the glimmers of a potential upturn. While cautious, there's an overarching sense of optimism.Disbelief: As the market slowly claws its way up, many remain skeptical. Having been burnt by past false rallies, there's a hesitancy to embrace the upswing wholeheartedly.Optimism: A pivotal sentiment. As the market continues its upward trajectory, the earlier skepticism starts fading. Investors now begin to believe that the good times are here to stay.Belief: A surge of confidence envelopes the market. With continued positive signals, investors are more assertive in their investment choices, often increasing their market exposure.Thrill: A dangerous precipice. The relentless market growth leads to a sense of invulnerability. Many not only buy more but do so on borrowed money, convinced that they can't lose.Euphoria: The pinnacle of overconfidence. Investors, swept up in the torrent of success, often become blind to risks. The sentiment is that the sky's the limit.Bear Market StagesComplacency: The initial declines are often dismissed as 'minor corrections'. There's a general sentiment that the market will soon regain its momentum.Anxiety: The charm starts wearing off. As the market doesn't rebound as expected and more investors receive margin calls, a sense of unease permeates the atmosphere.Denial: Investors grapple with cognitive dissonance. Despite evident market downtrends, many convince themselves that their assets are still valuable and that a rebound is imminent.Panic: As the name suggests, a chaotic stage. Watching the consistent slide, many investors frantically try to offload their assets to prevent further losses.Capitulation: The lowest ebb. A point where investors, emotionally and financially drained, decide to exit the market, often vowing never to return.Anger & Depression: The aftermath. The emotional turmoil is profound, with many directing their ire at external entities, such as regulatory bodies or the government, while grappling with the tangible implications of their financial setbacks.Examples of Current Asset Life Cycles Navigating Emotions and The MarketInvestment decisions deeply influenced by emotions can lead to undesired outcomes. Here's how investors can keep their emotional compass in check.Evading the Herd Mentality: Throughout history, from the Dutch Tulip Mania to the Dot-com Bubble, the collective frenzy has shown its destructive power. While it's human nature to be influenced by peers, it's vital for investors to undertake independent research and maintain a healthy dose of skepticism.Staying Alert and Educated: The financial world is in perpetual motion. Continual education, combined with an acute awareness of global events and market nuances, equips investors with the tools to make informed decisions.Deciphering Market Dynamics: An astute investor recognizes the market's current stage. Whether it's the heady days of euphoria or the somber periods of denial, understanding the broader context can provide invaluable insights.Embrace Accountability: Every investor, irrespective of experience, will make mistakes. Rather than seeking scapegoats, embracing these missteps and learning from them is pivotal for long-term growth.Avoid Playing the Blame Game: While it's comforting to lay the blame on external entities during downturns, it's seldom productive. A proactive, self-reflective approach offers more constructive insights.Prudent Risk Management: Always operate within your financial comfort zone. Tempting as it might be to chase massive gains, it's essential to recognize and respect your risk threshold.Understanding Leverage: Leverage, or buying on margin, can be a potent tool. However, it's akin to playing with fire. While it can amplify returns in a bull market, during downturns, it can exacerbate losses, leading to financial and emotional distress.Long-term Vision and Forecasting: Every investor should have clear financial goals. Whether it's purchasing a home, funding children's education, or ensuring a comfortable retirement, your investment strategy should mirror these milestones.Aligning Risk Appetite with Life Stage: As one approaches significant life events, like retirement, capital preservation often becomes paramount. It's crucial to reevaluate your investment strategy to ensure it aligns with your current life stage and future aspirations.Where we could go next Articles to Enhance Education and UnderstandingStockholm Syndrome - Investors Have Stockholm Syndrom And How This Effects Their RetirementPersonality Test - A Valuable Lesson In Knowing Investors And Your Own Personality TypeSelf-Discipline - How To Become A World Class Investor Without Self DisciplineSequence of Returns Risk - Shockingly Different Investment Results And How Two Pilots Invested $1,000,000Drawdowns - Silent Killers Of Stock And Bond Investors 50+In ConclusionThe stock market is as much a test of emotional resilience as it is of financial acumen. The highs and lows can evoke a spectrum of feelings, from euphoria to despair. By understanding these emotional stages, being vigilant, and making informed, independent decisions, investors can better navigate the market's complex dynamics. The stock market's allure is undeniable, but like any powerful force, it must be approached with respect, understanding, and a touch of humility.Challenging industry beliefs, building knowledge banks, and finding the right strategy are all key aspects to becoming a long-term successful revester. Growing wealth sustainably is not about greed, fear, or hope. It’s about safeguarding finances, preserving peace of mind and ensuring a legacy of financial success for all generations.
Decoding Retirement Finance: The Interplay of Sequence of Returns, Drawdowns, Emotional Trading, and Your Personality 

Decoding Retirement Finance: The Interplay of Sequence of Returns, Drawdowns, Emotional Trading, and Your Personality 

Chris Vermeulen Chris Vermeulen 19.10.2023 15:39
The golden years of retirement are eagerly anticipated by many as a well-deserved reprieve after decades of hard work. However, ensuring these years are as golden as you hope, demands more than just diligent saving. It requires a nuanced understanding of investment intricacies, particularly sequence of returns risk, value drawdowns, time drawdowns, emotional trading, and the subtle influence of your personality on investment choices. The Hidden Pitfall: Sequence of Returns Risk  One commonly held belief is that an average return on investments over time is enough to ensure a comfortable retirement. But the sequence, or order, in which these returns occur, especially during the early years of retirement, can dramatically alter your financial landscape. Consider the scenario of Bob, who enters retirement with savings of $500,000. With his calculations, an annual withdrawal of $20,000, coupled with a specific average return, should suffice. But markets are unpredictable. If the initial years of his retirement are marked by poor returns, the combined effect of his withdrawals and these losses can significantly erode his savings. Even if the market bounces back later, his diminished principal may not fully benefit from these positive returns, affecting his long-term financial health and sequence of returns risk is the cause for this.Demystifying Two Types of Drawdowns - Value and TimeCentral to understanding the sequence of returns risk are the concepts of value and time drawdowns. Value Drawdown: This describes the percentage reduction from an asset's peak value to its lowest point. In Bob’s context, if his savings dwindle from $500,000 to $400,000, he's encountered a 20% value drawdown. Such a dip doesn't just represent a numerical loss; it fundamentally alters the foundation upon which future returns can be built. Time Drawdown: This concept revolves around the duration it takes for an asset to rebound from a value drawdown. If Bob’s portfolio, after its decline, takes five years to ascend back to its original value, that represents a five-year time drawdown. For retirees consistently withdrawing funds, prolonged time drawdowns can be especially perilous, accelerating the depletion of their savings. These drawdowns, while sounding technical, have tangible repercussions. They can translate to longer recovery periods for investments, and is the number one cause of retirees to outlive their savings. The Emotional Quagmire of Trading  Financial markets are a roller-coaster of highs and lows. While experienced traders are more accustomed to this ride, retirees can find the dips stomach-churning, especially when their life's savings are at stake. Imagine Bob, observing a consistent downward trend in his portfolio, succumbs to fear. Anxious about further losses, he might hastily reposition his assets into ultra-conservative options or even cash out a significant portion near market lows. Such decisions, dictated by emotions rather than rational analysis, can generate losses, hindering his portfolio's chances of recovery during future market rallies. Do You Know Your Personality Type? An Overlooked Connection  In the realm of investments, technical know-how is undeniably valuable. But equally vital is the introspective understanding of one's own personality and emotional propensities. Investors differ in their risk appetite. Some are thrill-seekers, unfazed by market turbulence, while others are more risk-averse, seeking stability. Recognizing how your brain perceives and reacts to situations can profoundly influence your investment decisions and success.Had Bob undertaken a deep dive into his own risk tolerance, he could have sculpted a portfolio that resonated with his personality. Such congruence between one's investment choices and inherent risk tolerance can act as a buffer against impulsive, emotion-driven decisions during market volatility. The Ground Realities for Retirees  Without a firm grasp of the sequence of returns risk, the implications of value and time drawdowns, and the dangers lurking in emotional trading, retirees might find themselves on shaky financial ground. Bob’s journey, though hypothetical, echoes the experiences of many retirees. They enter retirement armed with calculations, only to find their plans derailed by market realities and their own emotional responses. When the ominous prospect of outliving their savings becomes apparent, retirees are faced with undesirable choices. They might have to drastically cut back on their planned lifestyle, contemplate rejoining the workforce, lean heavily on governmental support, or even seek financial assistance from family. Beyond the palpable financial strain, such scenarios can also inflict emotional stress, shatter confidence, and diminish retirees' sense of autonomy. Using Wealth Math on the Journey to RetirementIf you read the article Shockingly Different Results Of How Two Pilots Invested $1,000,000 earlier this year, or if you have attended one of my presentations, you may already be familiar with the story of John and Mike who each invested $1,000,000 using different strategies. Now that retirement had begun, both men withdrew $50,000 annually.Just before his retirement, John realized that he needed to shift his focus from higher risk strategies to one that would protect and grow his money in a more conservative manner. He no longer had the luxury of unlimited recovery time should a downturn in the market occur. John was ready to settle into consistent returns, even if that meant he missed out on the adrenaline and excitement that only a big winning trade can provide.Mike, on the other hand, loved the ability to call himself an active and successful trader. With some yearly returns coming in at 35% and 43%, he saw no reason to change tactics. Sure, he’d had a few bad years, but so had everyone else, so he continued on as always. What Mike failed to really appreciate was that he was now playing with his future with no other income streams to insulate or support him during the not so good years. Looking at the image below, it becomes easy to see that while John is off living the retirement he always envisioned, Mike is by turns getting lots of high fives at the golf club or sitting hunched over his computer, desperately trying to stem the flow of lost money.In Conclusion  Retirement, while representing the culmination of a life's work, also introduces a new phase of financial management. Ensuring that this phase is stable and prosperous isn't just about amassing significant savings. It's about navigating the intricate web of investment dynamics, being cognizant of one's emotional triggers, and aligning one's investment strategy with their personality traits. Bob and Mike’s narratives serve as cautionary tales. They underscore the importance of holistic financial education and the value of seeking expert counsel. With the right knowledge and a strategy tailored to one's unique profile, retirees can pave the path to a truly golden retirement. It's not just about safeguarding finances; it's about preserving peace of mind and ensuring a legacy of financial prudence for future generations. 
The Real Estate Bubble: A Technical Analysis

The Real Estate Bubble: A Technical Analysis

Chris Vermeulen Chris Vermeulen 03.07.2023 14:15
By Chris Vermeulen, founder and chief market strategist at Technical Traders Ltd.Understanding The Market CyclesMy focus usually lies with stock indexes, sectors, and commodities, but today, we venture into the real estate market. Real estate is a market that many people don't fully comprehend. Many are excited by the robust housing market, believing it's never been a better time to buy. But the reality is, I believe we're in a phase that isn't ideal for such investments.Taking a leaf from Stan Weinstein's book, he proposed that the market has four stages: Stage 1, where active investment capital isn't advisable due to the choppy, flatlining market; Stage 2, the bull market phase; Stage 3, a volatile phase where struggle reigns; and Stage 4, a phase marked by a massive decline. Stages 2 & 4 are usually an easy time for investors to make money. But in Stages 1 & 3, it becomes harder to grow your capital and much easier to lose a hefty portion. This is the crucial time to preserve and protect your wealth for reinvestment when conditions improve.Multifamily Starts: A Red FlagLooking at this chart from Wolfstreet.com, multifamily starts (buildings with five units or more) are at the highest levels since 1986. This surge might look impressive, but historically, these sharp upticks are often followed by multi-year pullbacks in price. This pattern was evident in 2008 when, after reaching new highs, the stock market began to sell off significantly. Why are multifamily starts skyrocketing now? Because savvy investors are trying to squeeze more money from an overpriced real estate market. Multifamily housing is cheaper to build, with rental units being more affordable for those with financial constraints.The last time we saw a similar spike was in 2015, followed by several years of slowed housing starts as the market softened.Single Family Starts: The Early Warning SignNow let's turn to single-family starts. Despite the bullish predictions in the market, technical traders can clearly see the trend. There has been a series of lower highs and lower lows since June 2021. This pattern was seen previously in 2006 before housing peaked and began to weaken.The current trend for real estate is downward, but the recent rally has masked this, bringing it back to the levels seen in 2020.Total Starts: A Glimpse Into the FutureTaking into account both multifamily and single-family starts, we see a similar series of lower highs and lower lows. This trend signals an overall weakening in the real estate market. The current spike is probably the last push, with potential struggles ahead for contractors once this wave of homes has been built.The Real Estate ETF (IYR)Shifting our focus to the real estate ETF IYR, we notice a clear series of lower highs and lower lows. Savvy investors who invest in these REITs understand that the real estate market is exhausted and struggling.Looking at the chart, we can see a similar pattern from 2008. The market experienced a major sell-off, followed by a tight channel, before plunging dramatically.Home Builders: A False Hope?On the other hand, the Home Builders chart seems to tell a different story. Investors and speculators are piling into the housing building space, creating a FOMO (Fear Of Missing Out) atmosphere. This surge may feel promising, but it's important to remember that this is likely the peak before a significant drop.The Future of Real Estate:So that's what I see unfolding with the real estate market. I think things will continue to get tough, and over the next year or two, we will be looking at a very different market, a very different world. To me, it's best to be prepared for that and be smart with your investing. It means being able to protect your wealth, grow your capital safely and thus be able to take advantage of opportunities when they arise.Technical TradingI want to touch on the importance of understanding technical trading and chart analysis. Many people dismiss technical trading, thinking it's just looking at squiggly lines on a chart. But in reality, it's about understanding supply and demand dynamics, market psychology, and economic cycles. By taking a look at the charts of these real estate ETFs, REITs, and homebuilder stocks, you can see very clear trends and patterns that tell us a lot about what's going on in the market. This knowledge, in turn, allows you to make more informed investing decisions. So if you're not already familiar with technical trading, I highly recommend taking some time to learn more about it. It's not a perfect science, but it can give you a very helpful edge in the market.The Importance of DiversificationI also want to stress the importance of diversification. It's not enough to just invest in real estate or just invest in stocks. You need to spread your investments across a range of different assets, sectors, and even countries. This way, if one part of your portfolio performs poorly, it won't wipe you out.I think a lot of people got burned in the last real estate bubble because they were overly invested in real estate and didn't have enough diversification in their portfolios. They were too reliant on the housing market continuing to rise and weren't prepared for when it turned.In ConclusionIn conclusion, I believe we're on the brink of a significant downturn in the real estate market. I also believe that savvy investors who understand the cycles of the market and who are able to preserve their capital will be in a great position to take advantage of the opportunities that arise during the downturn. Remember, investing is not about timing the market perfectly; it's about being prepared and making intelligent decisions based on the information you have at hand.That's all I have for today, folks. Remember, be smart, stay informed, and always be prepared for whatever the market throws at you. Keep an eye on the charts, keep an eye on the news, and never stop learning. The more you know, the better prepared you'll be for whatever comes next.This is Chris Vermeulen from TheTechnicalTraders.com, signing off. Stay safe and happy investing!
Double Sell On The Nasdaq

Double Sell On The Nasdaq

Chris Vermeulen Chris Vermeulen 16.06.2023 18:25
In the dynamic world of trading and investing, the Covid-19 pandemic has served as a transformative catalyst. Market behaviors, trader attitudes, and even commonly used indicators underwent seismic shifts during this period. In this discussion, we delve into the multifaceted comparison of trading and investing practices before, during, and after the Covid-19 pandemic, focusing on the put-call ratio, cycle analysis, and their influences on stock market trends.Pre-Covid Trading:Before the pandemic, trading was characterized by an element of predictability and stability. The market was largely navigated by seasoned traders who relied on a mix of sentiment, fundamental, and technical analysis. A useful indicator was the put-call ratio—an index that offered insights into market sentiment by comparing the volume of bearish put options to bullish call options. This ratio was a reliable barometer of overbought and oversold market conditions, hinting at times when the market was excessively optimistic (frothy) or pessimistic. In an overbought scenario, for instance, the ratio would be skewed towards calls and would have a low value, often leading to market corrections and providing savvy traders with cues for profitable entry and exit points.Trading During Covid 2020-2022:With the advent of the Covid-19 pandemic, the stock market experienced an influx of new participants. As lockdowns were implemented globally, traditional avenues for entertainment and engagement were suddenly curtailed. Consequently, a myriad of individuals, many of whom were novices, pivoted towards the stock market. Interestingly, these new market participants demonstrated a marked propensity for risk-taking, often opting to buy call options. This surge in call options buying—partially due to their relatively low cost and high potential return—significantly distorted the put-call ratio, driving it below its typical range.During this period, the put-call ratio lost its utility by mid 2020. The usual overbought and oversold signals it generated became unreliable due to the influx of inexperienced traders and the consequent rampant purchasing of call options. Trading Post Covid Put-Call Ratio:In early 2022 after the majority of novice traders lost money from falling prices in growth stocks and gave up, the put-call ratio returned to normal. As global societies gradually adjusted to the realities of a post-pandemic world, so too did the stock market. The put-call ratio climbed back to its prior averages, once again serving as a useful tool in identifying potential market tops and forecasting corrections. With the options market behavior reverting to more predictable and recognizable patterns, we can effectively apply technical analysis and anticipate potential pivot points with the options market once again, as seen in the chart below.After Covid, the QQQ has exhibited an interesting trend where the put-call ratio and a cycle market top signal have aligned for the first time together. Given that the average market correction post-Covid has been approximately 18.5% to the downside, this unprecedented alignment of signals suggests that a similar pullback could be imminent.Trading The QQQ Pre-Covid:The NASDAQ (as represented by the QQQ) was characterized by standard cyclical behavior. Using techniques like cycle and intermarket analysis, traders could effectively identify times when the market was oversold or overbought. The typical market correction during this time was roughly 6%. These insights informed a technical trader about possible pullbacks or market advances, contributing to strategic decision-making processes.The Double Sell Signal For QQQ:Analyzing the QQQ provides valuable insights into the stock market's health. A unique phenomenon has been observed in the post-Covid market, where the put-call ratio and market top signals from the QQQ align. The put-call ratio, falling below its established average range, indicates a market teetering on overbought conditions. Concurrently, the QQQ cycle and intermarket analysis are giving me a topping signal as well.Despite the broader market's positive momentum, signs of divergence have become noticeable. Major indices are primarily propelled by a handful of heavyweight companies, masking the underperformance of individual stocks in the broader market. As these market leaders begin to lose momentum, the market as a whole could face a significant pullback, ranging from a 6% to 26% drop in the coming weeks. The fed and other economic data could send stocks into a final exhaustion push higher. If that happens, it means an even sharper correction afterward is likely to take, so be aware, and don’t get sucked into the market just before it reverses.How to Trade Rising and Falling Markets:Trading in bull and bear markets requires distinctly different strategies. In bull markets, the focus is on identifying potential market tops and managing positions during pullbacks. In contrast, in bear markets, traders look for signals indicating that the market is oversold and ready for a bounce.Rising markets are fairly simple and much slower than falling prices which are violent and require active intraday position management. Also, different sets of data and indicators are needed to trade rising and falling markets, which is where most individuals get things wrong. They use the same strategy in totally different market environments, and that’s a recipe for underperformance and substantial losses.How You Can Trade And Invest Differently:Trading and investing are lifelong learning journeys. Developing a comprehensive understanding of market dynamics, technical analysis, position management techniques, and having the proper expectations are the keys to enhancing your trading and investing success. Two valuable techniques are cycle and intermarket analysis, for understanding market ebbs and flows, and the other is position and risk management. If you like to learn, two books worth considering are "Asset Revesting" and "Technical Trading Mastery." The former delves into a growth-centric investing approach that avoids depreciation and manages positions, and the latter provides foundational knowledge for those aiming to become a proficient technical trader allowing you to identify trends, oversold, and overbought market conditions.The effective style of investing that I use is asset revesting—investing only in assets that are rising. This strategy helps to avoid holding assets that are depreciating and minimizes exposure to significant losses, enabling your account to consistently grow and hit new highs. In fact, during 2022, when nearly all investors were down 15%- 25%, the CGS Asset Revesting Strategy I followed kept growing my account, reaching new high watermarks every few months. Asset Revesters and I know the value this style has over the traditional buy-and-hold method and cringe every time we hear of a retiree who has their life savings tied up in a diversified buy-and-hope strategy.Managing Risk VS. Buy-And-Hold InvestingSimply put, asset revesting is the total opposite of buying-and-holding. Its number one goal is to protect your wealth and lifestyle first, then look to generate profits second. It just happens that by avoiding big losses, the returns with this strategy are nearly 3x that of the traditional method. As of this week, my asset revesting strategy locked in more profits pushing our accounts to new all-time highs yet again.Concluding Thoughts:By using appropriate trading and investment strategies for the current market conditions, you can improve your market performance and reduce your risk and losses. Remember, while the market's overall trajectory is still upward, preparedness for corrections is vital as it could be a correction of 5% or 50% - no one knows until after it has happened. That is why it’s crucial to have an exit strategy and to take profits when signs point to a potential market correction like this. The goal is not just to survive but to thrive in any market condition, which is what I have been doing for over two decades through the use of technical analysis, position and risk management, and asset revesting.In my next article I will cover some eye-opening charts of the next major trend to take advantage of, so stay tuned and join our free alerts newsletter.
An Investing Strategy Silently Making Motivated People Wealthy

An Investing Strategy Silently Making Motivated People Wealthy

Chris Vermeulen Chris Vermeulen 05.06.2023 23:22
Let me start with a short story of my experience and why I can't give you the uncompromised retirement you dream of, I can't protect your wealth, and I can't protect your lifestyle unless you genuinely want a better life for yourself. Many years ago, I purchased a course on how to become an online millionaire. It cost me thousands of dollars, and I rounded up all my friends. I told them about it, and they all joined me, and we took the course together as I wanted to be rich with all my best buddies. The sobering thing was near the end of the course. This guy had a section talking about energy suckers. This coach went on to describe the average person and their lack of drive/grit to want to become successful, live a full life of fun, and give back to the world and help others. He continued talking about how millions of people buy courses like this every month, watch them, and never complete the step-by-step processes to become successful. That is exactly what I experienced with almost everyone. Out of 9 people who joined me in taking the course, only one other person took action and turned their idea and passion into a monthly income, and the rest of them faded away into the sunset…My point here is that I spent a lot of time and effort trying to keep everyone motivated to live a better life, and it was exhausting and sucked the life out of me. I quickly experienced what the coach was talking about when he told us to stop helping energy suckers and focus on helping ourselves and those who can carry their weight and don't need to be motivated to be successful.So, shifting gears back to investing…Over the last few years, I have shifted away from trying to satisfy short-term aggressive traders demanding big returns, lots of trades, and who crave the adrenaline rush of being in fast-moving stocks, to individuals who appreciate consistent above-average growth without the rollercoaster ride and value strategies that require little to no time or experience to use and protects their capital from big losses. Aha, Moments!Have you ever had one of those lightning bolt moments in your life? The one where a particular word, phrase, experience, or event changes the foundation of your very being going forward? Something where your current understanding of how something works is cracked open, and new information and possibilities pour in? I had one of these not too long ago. It had to do with the style of investing that I believe in and practice daily. You've likely all heard of the financial industry's traditional Buy-And-Hold, Diversification, 60/40 Portfolio, and Dividend-Based strategies, yes? Although aspects of each of these can sometimes be beneficial, the strategies, in their entirety, never made sense to me. Why hold onto an asset that is tanking in value, taking all your recent gains with it?Because it'll eventually climb back up to previous highs? Sure, that's possible...if you have enough time to wait for that ambiguous 'someday' to arrive. Because holding a little of a whole lot of assets will ultimately create a balanced portfolio? Okay, that could work if the deadweight assets were trimmed off.Because holding more bonds than stocks as you get older decreases portfolio volatility and limits losses? Ummm, not when the bottom drops out of the bond markets when interest rates rise. Because dividends ensure you are always paid something for your investments? I can't argue that. But if your assets drop more in value than you get paid in dividends, your account balance is still decreasing, which defeats the point.Some say that most of these pitfalls can be avoided by having a good financial professional manage your account. I say this is absolutely true...if you have found someone who is fiducially bound to their clients, they are a technical analyst, they actively manage positions and risk, and they don't believe in the buy-and-hold strategy because of its dangers. Suppose your financial professional does not have these skills and beliefs. In that case, there is a high likelihood that your account is suffering from AUM, aka paying a high-cost fee to have your Assets UNDER Managed.Though we would like to believe otherwise, many financial professionals become extremely successful by doing the least amount of work possible. If you think about it, should rebalancing a portfolio each year really cost 1-2% of your life saving? To put some numbers into this example, say you have $1,000,000 in your portfolio, and it is rebalanced twice a year with the AUM (traditionally - Assets Under Management) fees at 2%. That is a cost of $20,000. Your account must earn at least that much in a year just to break even, never mind actually increase in value. Lightning Bolt #1 – Buy & Hold Investing Is Dangerous Back to my lightning bolt moment - one of the earliest lessons I had after I began trading and investing was that just because I loved an asset does not mean it loved me back. It did not care that I spent hours researching and learning all I could. It did not care that I was 100% convinced that its next move was up and to the right. It did not care that I had poured my entire account balance into supporting my belief. When that asset tanked, it took me down with it...hard. And it was the best thing that happened to me - though I certainly didn't think so then.   Fortunately, I learned this lesson fairly early in my career. I opted to leave the investment alone because there was not much left to lose. Instead of turning a 'paper loss' into a 'realized loss,' I decided to let it be and, in the process of doing so, learned another valuable lesson. I had youth on my side. I had time for the investment to hit rock bottom, stabilize, and then begin its decade-long climb back to previous highs. By the time it did, I was a much savvier investor and had moved far away from the buy-and-hold strategy to build wealth faster and sustain my wealth and lifestyle.So lightning bolt number one – was to be sure I don't hold onto assets falling in value and delay growth and my retirement for no reason other than laziness and/or lack of education from whoever is managing our money. There are many false beliefs in the financial industry in what we are told by so-called professionals, and this article about missing the biggest stock market rally days is an eye-opener.Lightning Bolt #2 – Market Trends and Cycles For decades now, I have not believed in owning assets that were decreasing in value. Now, when I say this, I don't mean the small intraday movements of stocks, bonds, or commodities. Instead, I am referring to larger multi-month price trends. When an asset has enjoyed a nice run-up and has begun to reverse its trend, I do not believe in holding those positions and watching my wealth fall with them. Why on earth would I do that? I would rather swallow my pride and sell the asset, even at a small loss, than take a big loss that is life-changing just because we, as investors, have been falsely told that the buy-and-hold strategy is the best long-term strategy which is not true. By doing this, I have protected my capital so that I can reinvest it another day - like when the market bottoms and starts a new rally. Then, I can buy back into the asset with the money that, had I stayed in, would have been lost. You can download my market trend and cycle infographic here.The struggle I was having was relaying this information to people in a clean and concise way. What I mean by that is, when you hear the term Buy-And-Hold, you know exactly what that means without being told. And the same thing goes with Dividends or Diversification strategies, and we know what they are. In another article, I go into more detail about just how poor of an investing strategy diversification is for anyone 45+ years of age in this article. These strategy names have been mainstays of the financial industry longer than most of us have been alive and, thus, rarely need to be defined. But this is not what I do. I needed to create a term that myself and others could identify and understand for the style of investing that can protect investors capital, and grow it faster, which I believe in and have been doing for over 20 years. So, my team and I put our heads together and wordsmithed our way to an answer – Asset Revesting! Finally, A Name To A Face - Asset RevestingSo, what is Asset Revesting exactly? Allow me to break it down to its simplest definition. An 'Asset' is anything a person would purchase that they believe will hold its value or increase in value. Examples include precious metals, real estate, stocks, bonds, ETFs, vintage cars, stamps, bitcoin, etc.  Revesting is a combination of a couple of words. It is 'Divesting' yourself of an asset that is falling in value and 'Reinvesting' the money into something on the rise. Hence, Asset Revesting. A style of investment that is straight-up common sense. Asset Revesting: · Exclusively holds assets rising in value. · Sells assets that are decreasing in value. · Sets risk management rules to protect capital. · Deploys position management to limit losses and lock in profits.· Will hold cash as a position when all other assets are falling.Have you been doing this all along? If so, you may just be an asset 'Revester' and didn't know it. As 'Asset Revesting' is a newly coined term, the people currently managing their investments in the aforementioned ways are already 'Revester's.' It turns out I've been one for decades! Should You Consider Becoming An Asset Revester? My answer to this is simple. Becoming an asset revester means you will be ahead of the game throughout most of the journey to retirement. Instead of watching your portfolio buckle under the weight of unexpected selloffs, you will be out of your positions and safely in cash. It's also possible to profit from falling prices, which is how we as investors can supercharge returns.I am not one to blow sunshine where there shouldn't be any. Do we have trades that don't work out – you bet, but do all of our trades have profit targets and protective stops in place to manage risk, ALWAYS! The reality is that there is always some inherent risk when it comes to trading and investing, and you need to both prepare for and expect that. A position needs room to breathe, but that doesn't mean we give it a mile when an inch will do just fine.  2022 was a hard one for many retired people. The bond market, traditionally a safe hedge-type play against the stock market, collapsed, taking countless retirees with it, forcing them to cut back on spending and downgrade their lifestyle. For my part, hearing the stories of so many people (family, friends, subscribers, strangers) who had followed the advice from their financial professional, or relied on the historical performance of their portfolio (forgetting that they were in a different phase of life than they were in the last big market reset in 2008), just made me cringe, and want to help as many investors possible from happening again.  I narrowed my focus on soon-to-be or already-retired folks who simply cannot afford to weather another multi-year recession using the diversified buy-and-hold strategy. These people are my parents. They are my wife's parents. They are my neighbors. They are members of my Technical Traders community. They are strangers whose stories I have heard. My mission is to help as many investors as possible avoid and even profit from the next major financial reset in stocks, bonds, commodities, and even real estate. This is the worst possible time for the majority of investors to lose another 20-50% of their wealth and then have to wait 5-15 years for their accounts to recover.Now, I share my asset revesting signals to follow, and I even encourage you to have them autotrading in your brokerage account at no additional cost.Imagine if you could have rotated your capital into the best asset at any given time during covid. Rotating out of stocks, into bonds, then waiting in cash until stocks bottomed, and then re-entered the stock market for big gains and no losses?Imagine if you could save $5000, $20,000, or even $50,000 a year in advisor fees while having your retirement account value protected and growing in all market conditions, and have this done for a small flat fee? This is what investors in over 130 countries are doing with some or all of their investment capital and are enjoying the journey with me. It works with account sizes of $50,000 or more, and you trade the signals in your self-directed brokerage account or have the broker autotrade the signals for you with the simple annual newsletter subscription fee.If you have any questions feel free to contact me, I'm here to help! 
Missing The Biggest Stock Market Rallies - Are They Worth The Agony For The Buy-And-Hold Investor?

Missing The Biggest Stock Market Rallies - Are They Worth The Agony For The Buy-And-Hold Investor?

Chris Vermeulen Chris Vermeulen 10.05.2023 23:18
 I have read so many articles recently from the investment industry and the so-called financial professionals about what happens to your investment account value if you don't follow the buy-and-hold method. What I have learned is just how good some professionals are at making people see precisely what they want them to through the use of misleading titles, graphs, and averages. The findings extrapolated from the presented scenarios can be downright unethical when you dig just beneath the surface. For example, if you consider the emotional and financial pain, stress, and anxiety, that a retiree holding falling assets during bear markets or recessions experience, especially when an unrepentant financial industry led them to believe everything would be A-OK, it is unacceptable.  Some study titles, angles, and quotes used to make you think the buy-and-hold strategy is the only option for investors are:If you miss the best ten days in the stock market, you miss half of the growth.Why you will miss the best market days if you sell during high volatility.To make money in the stock market, do nothing, just hold.Time, not timing, is what matters.Before I really get into the meat of this article, let me state one quick thing. I do think the buy-and-hold strategy can be a valid option for young investors with smaller investment accounts and who have a 30+ year investment horizon. But if you are nearing retirement or are retired already, you don't have "time" on your side. During bear markets or recessions, Buy-and-Hold morphs into the Buy-and-Hope strategy, and hope should have no place in an investment portfolio. If you plan or need to withdraw capital to subsidize your retirement during this time, you will compound your problems and suffer from a "sequence of returns risk," which is the most damaging thing to a retiree's financial future.So why does the financial industry do this? Well, the system is built around managing money in a way that is simple, can be sold to the masses generationally, and can leave your money in the market for 10, 20, 40+ years with minimal adjustments and all the while collecting AUM fees. To a technical trader and investor like me, AUM stands for "Assets Under Managed." My 13-year-old daughter could do the math, put 60% of a portfolio into an index ETF, the other 40% in a bond fund, and then check on it once a year to see if it needs rebalancing. It's not rocket science. I know investors who are paying $35,000+ a year in advisor fees, and they lost about $750,000 in 2022 following so-called 'professional advice.'Multimillionaire investor Jim Rogers said: "Diversification is something that stockbrokers came up with to protect themselves, so they wouldn't get sued for making bad investment choices for clients, and that you can go broke diversifying."Another reason the advisory industry pushes out content like this is that if the professionals all support it, then to the average investor, it looks like the diversified buy-and-hold method is the right and only way to manage money. But the reality is diversification is the best way to suffer from volatility and have status quo returns like every other hoodwinked investor who remains uninformed about technical analysis and asset revesting methods. Getting back to one of the titles mentioned earlier, if you are curious about when the best days in the stock market actually happen and how it can alter your future, then you should find this article helpful. It's easy to think that these days occur when stocks are surging higher in a bull market, but is that, in fact, true? It turns out that it is...and it isn't. Chances are that in a clear bull market, whatever strategy you are using, be diversified buy-and-hold, technical analysis, fundamentals, etc., your account will be on an upswing. It's a time when many individuals loosen the reins on the rules and opt not to lock in profits along the way, instead choosing to try and increase their returns more dramatically. Or they may neglect to set protective stops believing that they can figure it out and deal with it later when price starts to weaken. When this downturn inevitably begins to happen and is confirmed on whatever news source an investor tunes into, it is at that moment most people apply risk control measures, like a stop loss order, to protect their money. Unfortunately, by this point, it is often already too late. I should quickly and steadfastly note that delaying protecting your position and capital is NEVER a good idea. It is ALWAYS better to make the first thing you do after entering a position is to set a protective stop and control your risk. Bad things happen, and they generally happen fast in the markets. If you are not around to exit a position, it could be very costly. In a bear market, the answer is not so cut and dry. For example, let's take a moment to examine the following finding: "About 42% of the S&P 500 Index's strongest days in the last 20 years occurred during a bear market. Another 34% of the market's best days took place in the first two months of a bull market—before it was clear a bull market had begun."Source: Ned Davis Research, cited by Hartford Funds An investor who is weathering the storm brought on by the buy-and-hold strategy during a bear market is likely to cling to these big rally days as though it were a life-saving ring. As I see it, though, the problem is that the life ring is not attached to anything. There is no dock, there is no ship, there is no land, and there is no one to pull you to safety. There is just you, bobbing away.  Will you stay in that environment forever? It is unlikely. If you can hold on long enough, the tide will eventually turn, and the stock market will turn bullish again. Your accounts will creep higher, and the day will come when you celebrate breaking even. Time will pass, and you will hit new high watermarks and think, 'Let the good times roll'! The memories of financial ruin, desperation, fear, stress, and anxiety will fade, and the cycle will begin again. It sounds like a fun rollercoaster ride, doesn't it? The reality is that I believe the industry brainwashes investors, and they all have Stockholm Syndrome. But I won't get into it here. Let's take a few minutes to dig deeper into the quote above to see if holding stocks during those big rally days during a bear market is worth holding on to. Given the fact that 76% of the strongest days in the stock market occur within bear markets and during the early Stage 1 bottoming phase, it should be the first red flag that what the financial industry preaches may not be the holy grail strategy they say it is.Think about it. During a bear market, when prices are falling 1-5% per week over many months, who really cares if there is a 5 – 10% rally in the price of stocks if the price is still lower than before the bear market started. You are still losing money, and all those short-term rallies do is give panicked investors false hope that the market has bottomed and is starting a new bull market.The same can be said for how the industry claims dividend reinvesting is a great low-risk method to build wealth. Again, nothing could be further from the truth. If an asset price plummets by 30%, is a 2% dividend payout going to make you feel richer? Does it make up for the huge decline in your life savings at a time you need it the most? Dividend stock investing is how you achieve status quo returns.I want to take a moment to walk you through an actual investment scenario. For this example, I will assume that a $1,000,000 account was invested in a diversified portfolio of assets that tracked the performance of the S&P 500 index. The investor used the buy-and-hold strategy through the market peak of the Dot-Com peak and held through to the break-even recovery level many years later.  The Dot-Com crash began in March 2000 and lasted until October 2002. During this period, the S&P 500 index fell by approximately 49% from its peak to its bottom. In this case, the S&P 500 index did not return to its March 2000 peak until September 2007, approximately seven years later. Assuming the same account and portfolio data from above, investors had one month, ONE MONTH, to celebrate returning to their previous account high of $1,000,000 before the bottom dropped out again. This time, the S&P 500 index dropped approximately 57% from its peak in October 2007 (a loss of $570,000) to its bottom in March 2009. This time the market didn't fully recover to its pre-crisis levels until March 2013. Unless you were one of the fortunate few who chose a different approach in September or October of 2007 and moved to cash or used a strategy to profit from the declining market, it took 13 years to break even. A 13-year drawdown is beyond painful - it is life-altering and nothing short of a nightmare for a retiree. As a brief aside - if you are unsure what a drawdown is, as I have been shocked to learn that many active investors do not understand, please click this link to learn more. There are two types of drawdowns that you need to be aware of.Fast forward to today, in the volatile Stage 3 topping phase market phase we are navigating, the peak we experienced in 2022 may not be reached again for 3, 7, or 13+ years. Capital protection and asset management are a must for investors for the next several years...unless you like afore mentioned roller coasters.During that 13-year nightmare, there were some big rally days in the market, and the financial industry had us believing this was a cause for hope, if not celebration. In actuality, none of them mattered because they all happened when the investments were already at a loss. In fact, the only time missing big rally days makes you fall behind a little is during a raging bull market when stock indexes are making new all-time highs. Those are the real growth rallies. Concluding Thoughts:In short, all these bear market rally days did, was offer a glimpse of hope when there was nothing to support or sustain it. They served as a rallying cry to 'hold on, and things will get better' and then fizzled away to account for not much more than that. At the end of the day, did the buy-and-hold strategy work? Sure, but it took roughly 4,700 days to do so. If you are in retirement, that is a very long time to wait for income and growth...and a very long time to live in fear, stress, and anxiety.Having been an active trader and investor since 1997, I have lived, learned, and profited through multiple bull and bear markets. I have survived and thrived in global events because I trade and invest differently from others. Through the use of technical analysis and an asset hierarchy, I identify trends, follow prices, and manage positions and risk. This is my first key to long-term success. I teach two strategies in the Second Edition of my book, Technical Trading Mastery – 7 Steps To Win With Logic.I then take things a step further and invest differently using a style called Asset Revesting, which I deeply explore in my new book "Asset Revesting – How to Exclusively Hold Assets Rising in Value, Profit During Bear Markets, and Continue Building Wealth in Retirement."
Only Active Traders Suffer from This Horrible Pain & Costly Mistake

Only Active Traders Suffer from This Horrible Pain & Costly Mistake

Chris Vermeulen Chris Vermeulen 23.03.2023 13:58
Last week was wild for stocks and commodities after the Silicon Valley Bank defaulted and the government bailed out SVB’s clients. While the Fed and other authorities across the pond recently swore the banking system and banks are much better than they were during the 2008 financial crisis, having one of the top US banks default just 48 hours later is a little ridiculous. Both the USA and European leaders continue to tell us the banks are strong, but after last week, can we really trust the leaders that support the financial system anymore? By that stretch, can we really even trust the financial system itself anymore, either? In my opinion, not entirely, that’s for sure.Last weeks big bad key points…SVB imploded within 48 hours, which could have wiped out thousands of companies because they lacked risk management.  Government bails out SVB customers within 48 hours to protect companies. The US and European leaders state the banking system is much stronger than in 2008, which seems like a lie, but they are doing a good job covering things up as they try to ‘handle’ the crisis. All this may be closer to home than you realizeIf you look into how your retirement account was managed over the past few years, you may realize that your financial future and retirement could be at serious risk. For example, if you just held onto positions and rode out the 40% correction in bond prices from the high in 2020 and did the same during the significant stock market correction in 2022, your assets were undermanaged. This is a problem that needs to be corrected, especially if you are over 50 and approaching or in retirement. To be blunt, you no longer have time to recover from major market corrections. If you cannot see that, then I am sincerely worried for you.My focus is to help anyone with investment capital who wants to protect it during the next financial reset, and not have to downgrade their lifestyle due to inflation and falling asset prices. If that’s you, keep reading because holding onto assets falling in value is a terrible investment strategy. The buy-and-hold method that got you to where you are today does not work if you are over 50. Instead, it could destroy your retirement and lifestyle faster than you ever imagined.Ok, I got off onto a little rant there, and I apologize. But whenever I get talking about the financial and banking systems and how they screw the very people they purport to protect, I get a little worked up and can’t help trying to warn others.I think it was Ric Edelman, ranked by Barron’s as America’s #1 independent financial advisor at one point, said it best:"There is no greater pitfall than the one created by the retail investor industry. They are ripping you off. You are incurring greater risks, lower returns, and higher fees than you realize, and as a result, you are in danger of not achieving your financial goals."Alright, so let’s get into the main reason for this post!The Pain Active Traders Suffer from…Last week was wild, with stock and commodity prices popping and dropping all over the place. And while it was not a surprise to my followers and me, it was stressful for almost everyone else, especially active traders watching these big intraday price swings from the sidelines.On Thursday afternoon, I sent out an update to those who follow my analysis, which was well received.This is a summary of what I said Thursday afternoon:“A strong rally today with technology, growth stocks, and regional banks lead the way higher. The VIX remains high, we had panic selling yesterday, and today is the opposite, with our FOMO buying indicator spiking.This is a volatile market, and I prefer being on the sidelines. I want to share a great example of why that is from an email I received today from someone about to join our group. This person wanted to make some trades before joining our newsletter to see if he could make some quick money in this fast-moving market.Unfortunately, the email turned into a sad story, and I could tell this person was suffering badly from the financial outcome and emotional stress weighing on him. His story explained how he lost almost $100K, messing around with his portfolio in some stocks, and is now kicking himself for falling victim to greed and feeling the need to satisfy the rush of active trading.I can’t stress enough how important it is to sit on your hands, take small losses to avoid more significant losses, and follow a strategy versus shooting from the hip and swinging for the fences for the so-called easy money. I try to preach this in some way every time I communicate with traders and investors.To be very articulate and to the point – there is no such thing as easy money in the stock market. You might hear of or experience an easy (aka lucky) win, but unless you spend hours of time learning and understanding investing, trading, and the market itself, you will give every cent of that money back…and probably more.From helping fellow traders and investors for over 25 years, I know for a fact that most active traders struggle with trading less and watching the market from the sidelines. They feel more pain by waiting in cash than they do when stimulated with trades and taking losses.The unfortunate part about that is it’s hard on the pocketbook and does not get them to where they want to go in the long run. Nothing good comes easy or fast (generally).Tomorrow should be another interesting session, Chris Vermeulen”Later that day…I received a few emails and stories from followers, which really made my day and may also connect with you and your struggles.Reply From Investor #1: “Chris,This jumped out at me from your update this afternoon: "Active traders feel more pain by waiting in cash than they do when stimulated with trades and taking losses."I recognize that in me in spades. It's horrible but true. I totally believe that.I think that pain is akin to why men won't stop and ask for directions. Guys will drive around for an hour before we will ask for directions.The lethal version of that impulse I have personally seen in hiking. I've been a backpacker since I was 14 (now I am WAY older) and have hiked all over Oregon and California. I've experienced this myself: when lost (really lost), there is a strong impulse to just keep going, expecting and hoping you will stumble back onto your trail. We all know; hope is not a strategy. We need to sit down, breathe, drink some water, pull out your compass, look at the sun, look at your watch and altimeter (or GPS), and then pore over your map. Pretty soon you get oriented north and south, then to the map, and then you can plot a heading that will take you to your trail (or water).It may cost you some time, but the alternative is not good. John”Reply From Investor #2:“Hi Chris: It has now been a little over one month since I joined you. I used to have a problem being in cash... but NOT now. Thanks for the constant daily reminders of how important it is to avoid any big drawdowns. Edward”Reply From Investor #3“Hi Chris,I am a relatively new subscriber, and I just wanted to share my experience with you.I really appreciate the experience you have and the way you have set up your strategies. I also very much appreciate Brian - his calm demeanor and his thoughtful and thorough analysis of charts and situations.I find it very useful how you are able to explain and teach about the intricacies of the markets in the BAN Morning Updates - and mentally prepare traders for the day's action.I'm not really an active trader- I like more of the longer swing trades - I first encountered your style and technical mastery in an article entitled "Three Charts Every Trader and Investor Must See". This was a few years ago - maybe early 2020. I eventually got around to buying your book - and exploring Technical Traders' website. I started slowly with a TTI membership and listened in on the mentoring sessions.I learned more about CGS and BAN. I like how you have the big picture - looking at money flows and technical patterns in all different types of financial instruments. I also like the chart system you have and how you can look at historical patterns and cycles.I have had money in the stock market since the late 1990s - I did pretty well into 2000, then lost a lot of it, and have gradually worked my way back. A few years ago, I bought a lot of Apple stock and let it run during the bull market. I started selling covered calls so that I could keep my Apple shares and still make some extra money.Along the way, I learned the hard way to limit trading losses and preserve capital.In addition, I have learned a lot from your approach and from watching your strategies. I also have learned a lot from your explanations of the market and economic cycles.I could go on and on - but I really just wanted to say thank you.Rodney”Concluding Thoughts:In short, active traders often suffer from horrible pain and costly mistakes that they can avoid. The recent market volatility has highlighted this fact, and while it may be tempting to try and make quick money in a fast-moving market, it often leads to significant losses and emotional stress.Most active traders struggle with trading less and watching the market from the sidelines. They feel more pain by waiting in cash than they do when stimulated with trades and taking losses. As an investor or trader, it is crucial to understand the value of, and put into practice, sitting on your hands, taking small losses to avoid more significant losses, and following a strategy instead of shooting from the hip and swinging for the fences. It is essential to have a strategy to protect your investment capital during the next financial reset that will result in not having to downgrade your lifestyle from inflation and falling asset prices. As an investor, it is vital to avoid being ripped off by the retail investor industry and not continuing to fall victim to the traditional buy-and-hold strategy when it no longer serves you. Instead, decide, choose, and then follow a strategy that you understand and are comfortable with that can help you achieve your financial goals and secure your retirement. For example, I use the CGS strategy.If you are 50+ and believe the buy-and-hold strategy will keep working for you into retirement and won’t hear of anything else, I can’t help you. Just know that it’s only a matter of time before the next major market correction takes place and plunges you into a very new and scary reality. To find out if or why you need help, read this post: two silent killers that destroy retirement dreams, and read this post: the most damaging thing you will suffer – sequence of returns risk.If you are an active trader, convinced that you must always be in trades and that if there are big swings in the market, you should be catching them all no matter the timeline, well…I can’t help you either.If you have an open mind and want to become wealthier during retirement vs. poorer, I can help you.
Is The Stock Market Starting A New Bull Market Rally?

Is The Stock Market Starting A New Bull Market Rally?

Chris Vermeulen Chris Vermeulen 05.03.2023 14:11
It has been a while since I have written a simple technical analysis article. My focus has been on helping teach others how the markets move and to trade and invest differently, so I apologize for the lack of chart analysis over the past several months.With that said, the market could be starting something big and exciting, which brings new opportunities, and, eventually, some massive risk for investors. I cover  I did with Craig Hemke.https://youtu.be/jZta0AgH3oE As an active trader relying solely on technical analysis and risk and position management, the recent rebound in major stock indexes is an encouraging sign. The past month had been weak and was starting to spook average market participants. We watched the masses panic out of positions last week and bought put options, betting heavily for a collapse on Thursday and Friday, but the opposite happened, as expected. I feel bad for these suckers who trade purely on emotional impulse. They take beating after beating until they give in and decide to learn how the markets move and manage positions and risk or give up on trading.Anyways, onward and upward!Buyers have stepped in and are supporting prices, and these rebounds are occurring at important moving average lines. I'm paying close attention to the 200-day moving average lines on the major indexes.This is significant because no matter how good of a trader you are, if you don't know short-term and long-term trends of the broad stock market, your odds of consistently winning trades and growing your account drop to about 30%. With that said, let's jump into some charts!Dow Industrials Daily Chart Looking at the Dow Industrials Chart, it's bounced off potential support along its late December low and its 200-day moving average. This is a positive sign, as it keeps the sideways trading range intact. It's also to keep in mind that the longer a chart trades sideways, the larger the next breakout should be. This three-month pause could pack a powerful punch/rally if the market continues this move.S&P 500 Daily ChartThe S&P 500 looks to have found support and started a reversal from its 200-day line on Thursday and gained more ground on Friday.Nasdaq 100 QQQ Daily ChartThe Invesco QQQ ETF has also bounced off its 200-day average, indicating that there's strong support at this level. Small Cap IWM Daily ChartAs a technical trader, I'm always looking for signs of strength and weakness in the market, and small-cap stocks have been standing out as a particularly strong area of the market in recent months. Despite the overall weakness in the markets in February, small-cap stocks have held up better than their larger counterparts, which is a promising sign.I can see that the Russell 2000 iShares is well above its 200-day moving average, which is an important level of support. This indicates that there's still a strong bullish sentiment in the small-cap space.ARKW Daily Chart (Momentum & Growth Stocks)It's worth noting that small-cap and growth stock leadership is typically a positive sign for the broader market, as these stocks tend to lead the way during market rallies. As a technical trader, I'm encouraged by the strength of these stocks and will continue to monitor this market area for potential trading opportunities closely. I also feel that gold, silver, and miners could come back to life.Earlier in February, subscribers and I locked in gains with ARKW at 7% and 15% gains. We also locked in 7% in SMH and 10% with QLD. Another big rally in these types of stocks could be starting once more, which I plan to take advantage of using my Best Asset Now (BAN) ETF strategy.Concluding Thoughts:In short, last week, the market may have turned a major corner that could last a few months. I feel it will catch a tone of traders off guard, and then, once this move is complete, the following move will destroy most investors' accounts and retirement dreams, but we can talk about that another time. It's a little way away still.Overall, the market remains in what I call a Stage 3 topping phase, and the key is to protect our capital and not be swinging for the fences until the next tradable stage starts, which would be Stage 2 or Stage 4.
Diworsification: The Problem with Spreading Your Portfolio Too Thin

Diworsification: The Problem with Spreading Your Portfolio Too Thin

Chris Vermeulen Chris Vermeulen 01.03.2023 22:46
The concept of diversification has long been hailed as the holy grail of investing. The idea is that spreading investments across different asset classes may reduce risk and create a more stable portfolio. However, there is a growing concern that diversification can lead to over-diversification and a poorly performing portfolio. This is known as diworsification.Diworsification is a result of adding assets to a portfolio simply for the sake of diversification without considering whether those assets will actually benefit the overall investment strategy.What most investors don’t realize is how strong the correlation is between most stocks, sectors, and indexes. It does not matter which group or type of stock an investor holds in their portfolio. The bottom line is that when the stock market falls, almost all stocks fall. The main difference is that some fall more than others, and there are two silent account killers that destroy retirement dreams. Meaning that investors who spread their money out over several sectors thinking they are diversified and more protected, could not be further from the truth.In fact, owning specific sectors can increase one's risk because sectors, in general, are a smaller segment of the whole market and thus can rise and fall faster than the broad index.This can lead to lower returns, higher costs, and increase risk substantially. Diversification is a byproduct of the buy-and-hold method, which puts investors over the age of 50 at serious risk because of what is called the Sequence of Returns Risk.Investors can avoid diworsification by exploring alternative investment strategies that can help them achieve their financial goals more efficiently. In fact, there is a growing trend where investors are challenging the old status-quo buy-and-hold strategy.Tactical ETF Investing: A Different Approach to Building WealthOne alternative investment strategy gaining popularity is tactical investing. Tactical investing allows investors to grow their capital without diversification. Instead of spreading investments across assets, tactical investing allows investors to focus on the assets that are performing well while avoiding those that are not.Tactical investing works by selling assets as they start to top out and reinvests the money into other assets that are rising in value. This strategy is the polar opposite of the old buy-and-hold method used by firms like Fidelity, Schwab, and financial advisors in general. Tactical investing allows investors to avoid holding falling positions and instead focus on assets that have the potential for growth.What makes tactical investing different from traditional diversification is that it does not rely on spreading investments across asset classes at the same time. Instead, it relies on an asset hierarchy and rotates capital into assets that have the most potential for growth. A strategy that uses an asset hierarchy is CGS.The benefits of tactical investing are clearTactical investing allows investors to focus only on the assets that are rising while avoiding those that aren’t. This strategy can lead to higher returns and lower costs, as investors are not paying fees and expenses for assets that are not contributing to their overall investment strategy.Additionally, tactical investing allows investors to take advantage of market volatility. Instead of riding out market fluctuations, investors can avoid falling prices altogether and limit their downside risk. Some tactical investing newsletters have strategies that can generate additional gains during market corrections using inverse ETFs.Top ETF Brands for Tactical InvestingWhen it comes to tactical investing, investors have many options to choose from when selecting an ETF. Some of the top brands that work well for tactical investing that I use are:Invesco ETFs like QQQ, UUP, and UDNState Street ETF SPYiShares ETF TLTProshares PSQ and SHOverall, these top ETF brands offer a wide range of choices to meet the specific needs of investors looking to achieve financial efficiency through tactical investing.Concluding ThoughtsWhile diversification has long been considered a key strategy for building a successful investment portfolio, the concept of diworsification highlights the potential downside of diversifying your portfolio.Instead, investors can consider using tactical investing to grow their capital without diversification by reinvesting their money into different assets rising in value and avoiding holding positions that are falling. By carefully selecting the right ETF for various assets, investors can fast-track their portfolios to reach retirement sooner and for retirees to live a richer lifestyle.I hope you found this article useful. If so, please share it with others on Facebook, Twitter, and LinkedIn!
Pilots, Professionals, and Entrepreneurs Should Reduce Their Portfolio Risk

Pilots, Professionals, and Entrepreneurs Should Reduce Their Portfolio Risk

Chris Vermeulen Chris Vermeulen 28.02.2023 14:37
Let me share with you a story about one of my clients named John, a 59-year-old retiree who was looking to secure his portfolio. John had experienced market volatility before, and it had caused him a lot of stress and sleepless nights. He came to us for a different way to manage his investments in a more conservative manner. After he reviewed our investing strategies to find out which one fit his financial goals and risk tolerance best and did the personality test, he decided to use our Consistent Growth Strategy. He felt that this strategy would help him feel more secure and avoid market volatility while producing nearly two times higher annual returns than what he was currently experiencing with his advisor.However, just a few weeks later, John called to tell us that his son, who was a financial enthusiast, had convinced him to take a more aggressive approach with a different service. Despite our warnings about the potential risks, John followed his son's advice, and what happened next is likely exactly what you are thinking. The market ended up declining, causing John to lose a significant amount of money from his portfolio. Now, is there anything wrong with listening to the advice of well-meaning people? No, of course not. But, as in this case, the element that John and his son forgot to account for was that the son has years to recover from investments that do not pan out. John no longer has that luxury.Unfortunately, I see this all the time. A younger investor (and even some far more experienced ones) falls for a strategy that trades all the fast-moving stocks, is aggressive, and has a high level of risk. The issue is that everything is good until it's not, and when the losses build, the investor quickly finds out the strategy is way riskier than he or she wanted or can stomach. But by this time, it is much too late, and the damage has been done.Wealth Math - The Link Between Drawdowns And AgeYou may not know this, but the math changes in how investing works once you are 50+. I call this “wealth math" or lifestyle investing, and you can make more money with a lower annual return, which surprises almost everyone.It's important to review the investment strategy being used for your portfolio at each stage of your life to ensure that you are not taking too much risk. Doing this can help you avoid losing money and experiencing unnecessary stress. Based on our experience of talking to innumerable people, nearly all investors over 50 have their money invested in a much higher-risk strategy than they realize. If you own stocks and bonds and are invested by way of the passive buy-and-hold strategy used by firms like Schwab and Fidelity or financial advisors in general, then you best ask them to find out how much you stand to lose during the next bear market, which is just around the corner from the looks of things. Market volatility is part of investing, but with the right guidance, you can secure your investments and achieve your financial goals without the risks and rollercoaster rides.If you want to see the level of risk your retirement account and lifestyle have, you can get a taste of that by reading this post on the two types of drawdowns that kill investors' retirement accounts and lifestyles.My investment philosophyKeep it SimpleI believe in keeping things simple and easy to understand. If an advisor is giving you information that is too complex and you don’t understand it, there are two reasons why. First, they don't realize that you are struggling to understand. The solution - speak up. You are paying your advisor a good chunk of money, and encompassed in that fee is all the time you need to understand what the heck they are talking about. It's your hard-earned money, and it's your future, so take an active role in understanding what is happening to it. Reason number two is a little more nefarious. It's possible that your advisor is trying to prove how smart they are, which better serves their interest than yours. This tactic is often used to camouflage that your money is being spread out like peanut butter across all different kinds of stocks and assets. What this 'diversification' does is act like a shield. When one stock or asset begins to fall, a non-fiduciary bound advisor can easily say something along the lines of "but look at what's happening over here" and thus distract you from what can potentially become a huge loss. If the traditional buy-and-hold diversification strategy is being used, which is a high-risk strategy for anyone nearing retirement or already retired, it is again up to you to understand what that actually means. I have found that no one cares about you or your money as much as you do, and if you don't take the time to know what is best, then you are destined to have subpar results like everyone else.Many of our subscribers are surprised at how easily our investing strategy can guide them with their investing decisions. I've heard from so many individuals - sharing how they now understand what and why we invest the way we do and how we're providing them the education, confidence, and peace of mind that they always wanted when it comes to their investments.My Consistent Growth Strategy newsletter can help you in two ways.First, is that it provides detailed investment signals to follow. These trade alerts are complete with symbols, entry prices, protective stop levels, and price targets for ETFs. You can choose to simply copy these trades, which I also trade in my account.Second, is that if you are busy, don’t know much about the markets, or just want a done-for-you solution where my trades are automatically executed in your retirement account, I offer that as well for no additional cost using a third-party autotrading broker. This is similar to the robo-advisors like Betterment, and Wealthfront, with the exception that I only charge a flat newsletter signal subscription fee and that my strategy manages positions and risk. Traditional robo-advisors use the old buy-and-hold method, while charging an asset under management (AUM) fee, which can be much more costly.Slow and Steady WinsI believe in conservative strategies. Our best customers are the ones who want to ensure they'll not run out of money in the end, meaning they want to preserve their capital and generate returns to live on during retirement. They don't care about making the highest returns in the shortest amount of time possible. They care about having the best advice that will make their money last and ensure they'll be okay in retirement.My investing strategy is different. I don’t believe in huge diversification, nor do I believe in holding assets that are falling in value. Because of this, investors using my conservative high-growth strategy not only reach retirement, they thrive like never before.Take a look at my strategy vs. the buy-and-hold method for the past ten years for a retiree starting with $1,000,000 and withdrawing $50,000 a year. As you will see, with position and risk management (which makes for a more consistent return), investors become wealthier in retirement vs. just treading water.Belief and Follow-ThroughFinally, to be successful, you must believe in the process and have the self-discipline to follow through. If you are nearing or already retired, then the most important thing for you to understand is your new financial situation is all about capital preservation and risk management. This cannot be achieved with a stock and bond buy-and-hold strategy, so check with your advisor today to find out how your money is invested. With the knowledge you learn, you can take the appropriate action and implement a well-designed strategy built for retirees so you can avoid all the issues and concerns most suffer from. Once you see how your goals and dreams can come true in retirement and how you will be equipped to experience them, you can take your family and friends along for the ride.So, if you are not happy with your investment returns and are stuck having your capital plopped into the market, hoping it will generate the returns you want and need, then you should review The Technical Traders Ltd.'s investment methods and how we can help you live the life you want.I hope you found this article useful. If so, please share it with others on Facebook, Twitter, and LinkedIn!
Silent Killers of Stock and Bond Investors 50+

Silent Killers of Stock and Bond Investors 50+

Chris Vermeulen Chris Vermeulen 20.02.2023 03:32
Recently I was shocked after speaking with five different investors on the phone. These investors have been involved in the markets for many years, and they trade their accounts. Surprisingly, not a single one of them knew what drawdowns were, as there are two types. In short, it is how we gauge an overall investment strategy’s risk level so you know if a given approach fits within your risk tolerance.I did a survey several years ago that still blows my mind because the results were so backwards and frustrating. To this day, I’m experiencing the same thing with traders and investors, so I want to talk about it here – drawdowns and what you may not know about them.A drawdown measures how much an investment or trading account is down from its highest point. It is used to quantify the extent of loss suffered by an investor or trader during a period of market decline. A drawdown is expressed as a percentage. Also, the maximum drawdown (MaxDD) is the largest percentage drop from the account’s highest point to its lowest point over the life of the strategy, which in laymen’s terms, is the largest loss.Drawdowns are a part of investing and trading and can significantly impact an investor’s financial health and retirement lifestyle, but it takes this type of self-discipline for success.Large drawdowns can take years to recover, which can be devastating for investors nearing retirement or already retired. This is because there is a second type of drawdown: the time it takes to recover from the value drawdown. When an investor experiences a significant drawdown, it can take years for their account to recover to its previous level, which can delay or destroy one’s retirement plans.Max Drawdown Comparison for Buy-and-Hold vs. Tactical InvestingThe traditional buy-and-hold method of holding stocks and bonds has a significantly higher drawdown compared to a strategy that manages positions and risk, like the CGS method.I work with advisors and money managers of all types, and they all say the same thing: investors start to get nervous and panic when their account falls roughly 8%. This begs the question of WHY do most firms like Fidelity and Schwab, and advisors in general, force the buy-and-hold strategy on investors when they know the risks these strategies incur? Don’t get me started. That’s a topic for another time, which Forbes did a write up on this a while back, which I will share in a future article. But Investors have Stockholm Syndrome because of the torture which the financial industry has put them through for so long, and that what they think is normal, isn’t.Two Types of Drawdowns – Value and TimeThe graph below shows these two types of drawdowns, which occurred during the 2021 market peak, and 2022 market trough of the buy-and-hold stock/bond portfolio. One of the things investors do not realize is that when you lose a large amount of money during a drawdown, it requires a much larger gain to recover.Also, if they suffer a 15-month drawdown (wasted time), it requires twice that time to recover because they missed out on the gains during that drawdown year, and then you need to earn the gains for an additional year, therefore, drawdowns cut twice as deep as most investors realize.The traditional buy-and-hold investing strategy, which holds a diversified basket of assets, is a high-risk strategy for investors over 50. This is because the system is vulnerable to large drawdowns, which can significantly impact an investor’s financial health. In addition, the time it takes to recover from a large drawdown, the type which comes after a bear market, on average takes 3-7 years to recover, but note, there have been recoveries lasting 12 and even 15 years in the case of the 2000 tech bubble. Any delay in growth pushes an investor’s retirement further out, which can force them to downgrade their retirement lifestyle significantly without knowing it until its too late.I talked about investors need to be prepared for another 37% bear market crash, and how to avoid it in this 39-minute interview.S&P 500 IndexThis chart is a perfect example of how an investor who buys and holds positions can suffer from large value drawdowns and massive recovery time drawdowns.Nasdaq Tech Bubble and Growth StockUnfortunately, most investors are lured toward more risky assets, known as tech or biotech stocks. These are known as growth stocks, and the issue with buying and holding these types of companies during a bear market is that they fall the most and take the longest to recover, but because they are called growth stocks, most investors think they are the best investments.Drawdowns Kill Investors In Three Different WaysA research report found that between 2008 and 2009 alone, there were over 6500 suicides directly related to the drop in equity value. I know what will happen to you if this does not open your eyes to how dangerous bear markets and drawdowns are. Some investors turn a blind eye to a bear market and think they can simply just ride it out, but in most cases, the pain of loss will get so extreme they end up doing something they wish they didn’t. Unfortunately, I have come to a conclusion, that some people just have to learn the hard way, and there isn’t much I can do about it other than try to help. One thing most investors don’t know is how their brain functions – thinks, feels, processes and reacts. Knowing your investment personality is critical for long-term success.My focus is to help those who have a head on their shoulders and realize they need help to protect and grow their wealth during the most critical phase of their life – near retirement or retired.Aside from the emotional damage, reduced account size, and delay of retirement, investors have to work much longer as seniors and reduce their quality of life. Don’t get me wrong, the diversified buy-and-hold investment strategy can work very well for young investors, but it is a high-risk gamble on your golden years if you are over 50.Tactical Investing – Consistent Growth Strategy (CGS)Tactical investing is an approach to investing and trading that can help investors avoid large drawdowns in both value and time to recover. It involves selling underperforming assets and reinvesting the proceeds into assets that are rising in value. This strategy allows investors to avoid holding falling positions and take advantage of market trends. In addition, by following a proven asset hierarchy list, investors can substantially reduce drawdowns through positions with lower volatility.Technical trading signals provide clarity on market direction and risks by removing the guesswork from trading. Using these signals helps investors control risk by following price trends, holding positions when assets are rising, and quickly exiting underperforming positions.Technical trading systems based on ETF signals provide proven, repeatable processes that introduce consistency, control, and capital preservation. Based on technical analysis rules rather than fundamental predictions and the old buy-and-hope strategy, active investors who follow the strategy rules gains control of their emotions, particularly FOMO and hindsight.In conclusion, drawdowns are a natural part of investing and trading, but they can significantly impact an investor’s financial health. Large drawdowns can take years to recover, which can be devastating for investors nearing retirement. The traditional buy-and-hold investing strategy is vulnerable to large drawdowns, particularly for investors over 50. Tactical investing is an approach to investing and trading that can help investors avoid large drawdowns in value and time to recover. By following a proven asset hierarchy list and using technical analysis signals, investors can substantially reduce drawdowns through positions with lower volatility, nearly double their annual returns, and retire sooner than they thought possible with ETFs.
How To Become A World Class Investor Without Self-Discipline

How To Become A World Class Investor Without Self-Discipline

Chris Vermeulen Chris Vermeulen 08.02.2023 14:44
If you’ve had any education in trading at all, you’ve heard that self-discipline is a major key to success. I want to touch on this topic to reinforce this point! Understanding the psychology of trading is the distinction between those who win and those who don’t. Thankfully, there is a way for individuals who struggle to properly manage their losses to take full advantage of the stock market.Personally, I don’t think trading needs to be complicated. Keeping things simple is the key to repeatable success, as it helps individuals with poor self-discipline stay in control and on track. I’ve studied many of the world’s top traders, and they only use a few basic strategies in combination with self-discipline when it comes to position and risk management.This does not, however, mean trading is simple. There is a lot of room for failure when it comes to self-discipline and trade execution, and there isn’t any trading method that’s 100 percent bulletproof. All strategies have losing trades and losing years.The most effective way to become successful as a trader is to learn directly from someone who has already made the mistakes you may just be headed straight for and not only survived but persevered and triumphed through the struggle.Self-Disciplined Traders Look Before LeapingOne of the most common mistakes inexperienced traders make is to trade when they see an opportunity they think might be too good to miss. Jumping into a position based on a hunch or on the belief that you may be missing an opportunity is no different than gambling. Men struggle with this issue the most, and it tends to come at a high cost of wasting both time and money. In fact, I talked about why women tend to be better long-term investors on my blog. All of us, at one time or another, have felt a rush of greed for a trade based solely on the desire not to miss out on an opportunity. And, yes, that includes me.Self-discipline means a trader applies skill and logic to their trading. They learn every day, and they use what they know to make intelligent decisions. They don’t worry about missing out; they focus on protecting their capital first, then look for quality trades second.How I Became A World Class InvestorIn 2001 I started sharing my market analysis online through an email newsletter. One of my main goals was, and remains, helping to fast-track a trader’s learning curve from a beginner to a more advanced stage within a few months. Throughout my evolution of teaching others how I trade and invest, the level of self-discipline I had further strengthened as well. By 2008, I had lived and breathed trading, studied strategies, and implemented them with success. I decided it was time to make the learning curve of reading the markets through the use of technical analysis even easier, faster, and more automated!After countless hours of analysis and with the help of multiple programmers to convert my knowledge, expertise, and strategies into a real-time automated technical analyst, I was on my way. I programmed the system that I had been manually trading since 2001, which I still use today, because it works exceptionally well.The system does all the time-consuming number crunching so that I can accurately identify current market trends. It also provides trade details like position sizes, entry signals (long or short), profit-taking levels, and protective stops.When using this strategy, most of my decisions are already accounted for, essentially making it easier to trade the markets and not rely so much on my self-discipline. I can anticipate the market's entry and exit points ahead of others and be mentally prepared, knowing I may have to take action within a couple of days. I find this very helpful when dealing with emotions like FOMO. With all that said, you don’t need to know and trade everything. The key is to find a few simple strategies that work for you and master them. Knowing what strategy is best for you is critical for your success, as it must fit with your personality, available time, self-discipline, and current knowledge of the financial market. I shared a post that can help with this titled What Type Of Trader or Investor Are You?How You Can Become A World Class InvestorOnly you can be accountable for your actions. All the books, audio, videos, manuals, courses, weekend seminars, or mentors cannot give you self-discipline. That must come from you. That is the reason why it’s called SELF-DISCIPLINE!So what does this mean? It means understanding that to trade successfully requires an extraordinary amount of self-control and self-understanding. It requires the ability to quiet the mind and recognize when fear or greed (emotions) start to creep into your decision-making process. You must have the awareness and discipline to step back and review your strategy checklist and follow it when the situation goes against your feelings.I have read a lot of trading books, and by far, the most exciting ones have been about what other successful traders have done and are doing to build their wealth. The book Market Wizards, by Jack Schwager, is a thorough account of trading because he interviews the world’s most successful traders.“What sets these traders apart? Most people think that winning in the market has something to do with finding the secret formula. The truth is that the common denominator among the traders I interviewed had more to do with ATTITUDE than APPROACH.”Jack SchwagerTwo aspects of psychology you need to succeed:1. You must trust your trading method.2. You must trust yourself.It’s obvious that to be successful in trading, you need a viable trading method with setups, rules, and a plan that works. Without one, no amount of self-discipline is going to help you. On the other hand, if you don’t have enough self-discipline to follow trading rules, then you can’t trust yourself to know you will do the right thing (like selling a position that is in decline). This is where most people fall short.The journey ahead will present challenges and test even the best-laid plans. Expect to encounter failures along the way. To succeed, it's crucial to not only have financial stability but to also have a strong mental fortitude that will endure the tough times that come with achieving success.As depicted in the image below, success is a path with peaks and valleys, including both triumphs and failures.Image via George CourosBelow is a quick litmus paper test that will help you know if you are more or less gambling your money vs. managing your money for a better lifestyle.If You Answer YES, Then You Have Foundational Trading Processes in PlaceDo you have a detailed trading plan to work from?Do you have clearly set up criteria for each trade and adjustment?Do you use a hard protective stop for every trade?Do you have a routine that gets you back on track when you’re trading is off?Do you prepare for your trading day with pre-market notes?Do you keep track of all your trades and review closed trades?If You Answer YES, Then You are Destined To Fail Unless....Have you had several winning trades, followed by larger crash & burn types of trades?Do you experience hesitation, apprehension, uncertainty, or fear when you are about to trade?Do you double down after a losing streak or in the midst of losses to regain profits faster?Have you ever gone into the “I don’t care” mode and watched your money disappear when in a trade?After losing a large amount of money, are you challenged emotionally by every trade after that loss?Were you successful in another profession and found trading is affecting your confidence and ego?Do you lose sleep over your trading and investment positions?Are you exiting a trade too quickly instead of waiting for the trade to mature to its full potential?Are a high percentage of your trades defensive?Do you logically know what to do in a trade but find you are not taking the actions you should?The Brutal TruthThe technical aspect of defining a trading method is academic; the psychological power to focus and remain disciplined is much more a matter of learning the techniques of positive self-talk and setting proper expectations, which leads to better self-discipline.That means that trying to beat the market by long shots (large directional-based trades) is not only difficult to do consistently, but it also leads to a level of volatility that will not sit well with you over the long term when losses stack up, or you find that your account is not any larger after a couple of years. Individuals who swing for the fences on trades like these tend to struggle more during bear markets.Removing human biases as much as possible by sticking to a proven strategy and focusing on capital preservation and low-risk victories is the only way to safely navigate the market to avoid large market corrections and bear markets.How To Be Successful With Poor Self-DisciplineA simple, well-thought-out trading strategy will feel slow and boring. That’s because all the possible scenarios have been figured out by the strategy rules (position size, stops, profit-taking levels, etc.), and all that is required is to follow the trade signals.Just look at the graph below for the last couple of years. The average investor without a plan or self-discipline has lost money with the buy-and-hope strategy vs. those who use a different approach which only holds assets rising in value as I do.I always try to remind active investors that if a strategy is SIMPLE, then it’s REPEATABLE. If it’s repeatable, then it’s BORING. If it’s boring, it means you have MASTERED it. And if you’ve mastered it, it means you will be far more likely to experience CONSISTENT PROFITS.So, in conclusion, if you are struggling with any of the things mentioned in this article and you want to identify and profit from stock market rallies and declines using ETFs, then I can help. I am here to lighten the load and provide actionable trade and position management signals with my Best Asset Now Sector Trading Newsletter or the Consistent Growth Strategy for fast-tracking your way to retirement and boosting your retirement lifestyle. You can manually trade these signals in your self-directed account or have them autotraded for you at no additional cost.I hope you found this article useful. If so, please share it with others on your social networks!
Why Women Make for Better Investors, Sorry Guys!

Why Women Make for Better Investors, Sorry Guys!

Chris Vermeulen Chris Vermeulen 05.02.2023 14:13
Some women say, “size matters,” and in this case, I have to agree. In this article, I touch on how women’s investment behaviors compare to men’s. Also, how retired women have a bigger savings account in the end because of how they manage their money differently.A widespread assumption in investing advice is that women need to be convinced to understand finance and are assumed to be risk-averse spendthrifts. However, research shows that women consistently outperform men in investing, leading to hundreds of thousands more dollars in retirement savings. In addition, women spend more time researching investment choices, take on appropriate levels of risk, and have better age-based asset allocations, which is impressive given women face an income-gender gap and generally make less money.They are also more likely to hold investments for the long term and remain calm during down markets. Conversely, men trade more often without enough research and reduce their net returns with extra commissions and taxes. They also have the tendency to hold onto trades too long and suffer severe drawdowns and losses. In short, to have more success like women do, investors of any gender should follow a strategy and its rules for buying and selling, exiting losing positions sooner, and reinvesting the money into different assets that are rising.Reasons Why Women Make for Better InvestorsLong-Term Focus: Women tend to prioritize long-term investments and stick with a proven plan, which can lead to more consistent growth.Prudent Approach: Women tend to have a more conservative approach to investing, which can result in less impulsive or risky investment decisions.Collaboration and Seeking Advice: Women often have a strong inclination towards seeking help and collaborating with others, which can lead to better decision-making to preserve and grow their capital.Join My Free Weekly Newsletter For Interesting Facts & Ideas – Click HereIn short, women don’t have it easy, and the investment industry is very male-dominated. Studies show women are more concerned than men about accumulating enough money to retire, running out of money in retirement, maintaining their lifestyle, and poor investment performance. But, because they are more concerned about these things than men are, it’s likely the reason why they do more research, plan their investments, and then invest in their plan. As a result, they tend to avoid getting sucked into hot stocks, commodities, or cryptos as much as men do.This interesting topic about “size matters” regarding retirement accounts is vital. The financial industry should take into account the specific investment needs of women investors vs. mass market participants with FOMO who think they need to own every shiny object mentioned in the media.“There is no greater pitfall than the one created by the retail investor industry. They are ripping you off. You are incurring greater risks, lower returns, and higher fees than you realize, and as a result, you are in danger of not achieving your financial goals.”RIC EDELMAN, RANKED BY BARRON’S AS AMERICA’S #1 INDEPENDENT FINANCIAL ADVISORI have had some wonderful conversations with savvy ladies from Canada and the USA this week. What I do fits well with how they want to protect and grow their wealth. My main focus is on capital preservation, and because I manage portfolio risk, the profits take care of themselves. As a result, the Consistent Growth Strategy has above-average returns, roughly two times the performance of the old buy-and-hold method, while allowing us to avoid bear markets. This strategy has been hitting new high-water marks every few months since 2007, and why investors in over 130 countries follow my CGS strategy.Download the Women Are Better Investors White Paper – Click HereOne thing they both have in common, though, is that they both tend to use the buy-and-hold strategy. In , I talked about why holding investments after the age of 50 could be the most costly financial mistake of their lifetime. Then, David Lin and I dive deep into what everyone must know about investing.The icing on the cake with what I offer at no additional cost is that anyone who uses an advisor and pays an AUM fee can have the CGS signals autotraded in their self-directed account at no additional cost from what they pay now with an advisor. In fact, most investors save tens of thousands of dollars per year in fees, which is a nice big bonus.Regardless of which type of trader/investor you are, if you can no longer take the pain of losing money trying to trade, and can’t afford to ride out another bear market and risk your lifestyle and retirement account, then following one of my simple and proven strategies could be just what you need. Learn More: The Consistent Growth Strategy – Click Here
How to Prepare for a 37% Crash in 2023 that Won't Rebound for Years

How to Prepare for a 37% Crash in 2023 that Won't Rebound for Years

Chris Vermeulen Chris Vermeulen 31.01.2023 21:29
 Recently, I had the opportunity to discuss market and asset class cycles with David Lin from Kitco News, which has gained a lot of attention. I shared my view that we are currently in a complacency phase, not a new bull market phase, and David probed me with some great questions, for which he is well known.Who I am nowFor those of you who don't know me yet, my name is Chris Vermeulen, and I am a technical trader who bases my analysis on Stan Weinstein's four-stage analysis of markets. This analysis suggests that we are still in the topping phase (Stage 3), and 2022 was just a warm-up to the start of the next financial reset. During the course of our chat, I shared with David my belief that though precious metals and miners are leading the way, I feel it's a false rally. A reset is expected later in 2023 with lower prices across the board for stocks, commodities, and housing, which will provide a great opportunity to accumulate assets in the coming years. I think of the stock market as an ocean and use different strategies for investing and trading the rising or falling tide, surfing the rallies and corrective moves in price that regularly form like sets of incoming waves. I focus on the big phases of the market and catch the wave-like patterns using various technical analyses such as stages, volume flow, cycles, and market sentiment to determine my entry and exit points. I also stress a lot the importance of setting profit targets and having rules in place to reduce risk. These position and risk management tools allow us to scale out of positions while locking in gains and protecting our capital should the market rollover. At the time of David's and my talk, I was holding 100% cash and waiting for the next market signal. He asked me, as a long-term investment signal, what needed to happen before I got bullish. I said that I am waiting for my weekly investing trend chart to turn positive, for consistent money flow to return in specific sectors, and for the trend to turn up before I would open positions once more. Wouldn't you know it, but all of this came together the day after our interview went live!How I got there...My journey in trading started when I was 16 years old in a finance class that issued a stock market challenge. When the semester-long challenge ended, I had made $80,000 in virtual dollars, and that was all it took to hook me in at an early age. These days, I'm a stickler for details and not breaking or bending the rules with my investing because of my training as a pilot when I was a teenager and due to a trading misstep or two along the way. I was taught the rules and regulations of flying, which you must always remember, and to follow a checklist for each stage of the flight. Failure to do so could result in sudden death or a plunge so swift that it shakes the foundation of who you are and who you want to be. That's how I now look at my trades and investments – short-haul or long-haul flights with the need to remain focused 100% of the time. David dug deep, asking about a bad trade I had experienced, how I recovered, and what I learned. I shared a recent one that turned into a $54,000 hit. A long-forgotten investment I had turned into a gold mine (figuratively) when I randomly checked its status - yay for me! And then, like a rookie, I didn't take profits when I had the chance. I got caught up in the excitement of unexpected 'free' money and kept thinking it would go higher. Wow - was I ever wrong. I just fell headlong into the trap that I so often talk about - emotional-based trading and not wanting to sell an asset that is beginning to lose money. So yes, even seasoned traders who know better can make mistakes in their personal accounts. Though the graphic below is more geared toward the stock market as a whole, it also highlights the emotions we can go through during the lifetime of one trade.Regretting the whole scenario and lesson without doing something about it is just not my style. So David and I segued into the importance of how knowing your own personality type can turn you into a better trader. I brought up an article I published, how 70% of individuals' personality types do not favor individuals as self-directed traders or investors, and how a good portion of investors and traders would benefit with help from a newsletter service or advisor. What I have learned along the wayDavid made a great observation that people often feel worse when they miss out on gains compared to when they lose money, and I agree. FOMO is a big issue in trading, and people struggle to control their emotions and actions. To help my subscribers with this, I built an indicator that tells us when there is FOMO in the markets and where the price should move next, higher or lower, based on the short-term extreme level.This interview with David was one of the best interviews I have done. David asked all the right questions for listeners to see the complete picture of how a trader and investor should look at the markets and manage risk and positions, and how to prepare for what could be the perfect storm to destroy any investors future who is 45+ and invested in stocks and bonds. I wrote a detailed article about how investors have Stockholm Syndrome and think wild fluctuations within their retirement accounts are normal and that there is no way to avoid it. But that’s flat-out, not true. For decades, the investment world has had everyone wrapped around their finger doing what they are told about how to invest, and individuals end up getting the short end of the stick.In short, if you want to know more about what I do and how I can help you keep reading. I share my tactical ETF investment alerts via my CGS newsletter. My disciplined approach helps individuals achieve and maintain their financial and lifestyle goals. For those of you who are tired of the stock market rollercoaster ride, and don’t have the time to ride out a multi-year recovery, it is certainly worth a look.I trade and invest differently. It's a significant change from what has been done in the past, and because of that, CGS generates roughly 2-times above-average returns of the 60/40 buy-and-hold method. Moreover, my strategy does this with a fraction of the portfolio volatility compared to traditional investing methods used by firms like Schwab, Fidelity, and financial advisors in general. Imagine if you could sell your investments as they started to top, then revest the money into different assets rising in value. Imagine never having to hold falling positions again. That's what I do! Users follow my email trade alerts in their self-directed brokerage account or have the CGS signals autotraded for them at no additional cost. Recommended tradable account size in a self-directed brokerage account between $100K - $5M makes the service very cost-effective.For anyone who uses an advisor and pays an AUM fee, having the CGS signals autotraded for you does not cost anything extra from what you pay now with an advisor. In fact, many save thousands of dollars per year in fees by using CGS, plus they have a strategy in place for capital preservation during extreme market events like the COVID crash, and bear markets.Think about it.
The Perfect Storm For Investors To Lose Big In 2023 Is Upon Us, Unless…

The Perfect Storm For Investors To Lose Big In 2023 Is Upon Us, Unless…

Chris Vermeulen Chris Vermeulen 05.01.2023 20:41
Last week I rang the bell telling investors and traders to wake up and smell the hot coffee because 2023 is going to be a life-changing year, and likely, not for the better.The 30,000-foot view of where we are in the stock market cycle is shown on my gauge.Mike’s Investment Story Of Losing BigMike had always been a big believer in the "buy and hold" investment strategy. He had read all the books and articles and was convinced that if he just stayed the course, he would come out ahead in the end. So when the stock market started to tank in 2008, Mike didn't panic. He told himself that this was just a temporary blip and that things would bounce back soon.But as the weeks turned into months, it became clear that this was no ordinary market downturn. Mike's portfolio was taking a beating, and he was starting to lose a lot of money. He tried to stay positive and hold on, but the losses just kept piling up. Finally, he couldn't take it anymore and panicked, which led to him selling everything.When the dust settled, Mike had lost a significant chunk of his life savings. He was devastated and couldn't believe that his beloved buy-and-hold strategy had failed him so badly. He vowed never to make the same mistake again and to always be more cautious and proactive with his investments.Despite his painful experience in 2008, Mike couldn't shake his interest in the stock market. He spent years studying and learning as much as he could about investing, determined to make up for his past mistakes. Finally, in 2020, he felt ready to give it another shot.With a newfound sense of caution and well-researched stocks, Mike slowly began to rebuild his investment portfolio. At first, things seemed to be going well. The market was strong, and his stocks were rising sharply.But in 2022, disaster struck again. A bear market hit both stocks and bonds, and Mike watched in horror as his portfolio took another hit, almost as bad as the 2008 financial crisis, because this time, the price of bonds fell with stocks due to the rising interest rates. Now, 14 years after his 2008, and the recent 2022 losses, Mike is older and much closer to retirement. He knows bear markets can take 3-12 years to recover, so it is critical that he invest differently now to avoid multi-year drawdowns that would delay his retirement.Mike is not alone, and maybe even you are having a similar situation with investing. In 2021 and again in 2022 investors started to challenge the status quo buy-and-hold strategy because holding stocks and bonds did not protect their capital as they were told it should. Download the free mini-booklet on this movement to create a bear-proof retirement account. Take a look at investor complaints received in 2020 and 2021. This tells us the 60/40 portfolio and standard advisor by-and-hold strategy has done some serious damage to investors accounts, and the reputation of advisors. This is the same scenario that happened during the 2008 bear market. The problem I have is that investors are always told to stay calm and to keep their money in the market, everything will be fine, and corrections are part of the process, but I say Hell No!Investors have been manipulated to think losing money during bear markets is normal. Investors have Stockholm Syndrome, and are being tortured for no reason because bear markets can be avoided. In fact, investors can make substantial returns during falling stock prices.Savvy investors and traders know the markets move through cycles and that price trends can be tracked and traded using technical analysis signals.A Different Way To Invest: Technical Trading SignalsTechnical trading signals can help traders make informed decisions and manage risk by providing clear direction on market trends and potential risks. By following these signals, traders can hold positions in assets that are performing well and quickly exit those that are underperforming, leading to lower volatility in the portfolio. When a signal is triggered, traders know to take action, whether that means entering or closing a position, which can help them avoid significant losses and outperform the market in the long run.Investment signals for ETFs and other asset types can provide a systematic, repeatable approach to investing that helps to reduce emotional stress and introduce consistency and capital preservation. These signals are based on rules rather than predictions or emotions, which can provide a clearer path to predictable outcomes. Many individuals now are using autotrading investing systems to take the guesswork out of things and remove the need to learn how the markets work, technical analysis, and risk and position management.How to increase returns and save money with technical trading signalsTechnical trading signals can be a cost-effective way for investors to boost their returns and save money, especially if they currently use a financial advisor who charges an AUM fee. These fees, typically around 1% of the assets under management, can add up over time for investors with large accounts. For example, a $500,000 investment with an advisor charging a 1% AUM fee would result in annual fees of $5,000.In contrast, technical trading signals are offered with a flat annual subscription, which can be significantly lower than the AUM fees charged by advisors. Additionally, these signals can help investors preserve capital and profit in both rising and falling markets, unlike the high-risk "buy-and-hope" strategy used by many advisors. Buy-and-hold, which exposes investors to the risk of significant multi-year drawdowns, may be suitable for younger investors but may not be appropriate for those over the age of 45.Concluding Thoughts:In summary, technical trading is an effective way for investors to generate wealth and manage risk. By using technical analysis to identify rising assets and implementing position and risk management strategies, investors can achieve above-average returns while minimizing risk.I have developed a proprietary ETF portfolio that has been refined over the past 25 years, which I share with investors who want to grow their accounts with less stress and volatility. This strategy, known as the Consistent Growth Strategy, can also be autotraded, allowing investors to set up and fund their account and then let the system handle the rest. It’s like having an advisor actively manage your account and protect you from falling prices, but at a lower cost.My team and I are available to help investors safely navigate both bull and bear markets using the ETF Consistent Growth Strategy. If you have any questions or would like to learn more, please don't hesitate to reach out.If you enjoyed this article, please share it with others, and be sure to join my free newsletter and have more articles like this delivered to your inbox.
Investors/Traders: Wake Up and Smell the Hot Coffee

Investors/Traders: Wake Up and Smell the Hot Coffee

Chris Vermeulen Chris Vermeulen 30.12.2022 15:30
Another year has gone by, and you are either richer or poorer, happier or sad, living life or worried about your future.2022 ended up being an alright year for individuals who focused on controlling risk and positions. Investors and I are up over 5% in 2022 using a passive consistent growth strategy. It may not sound like much, but considering the average buy-and-hope portfolio with a 60/40 stock/bond balance which is down -19%, it's a dramatic difference.Buy-and-Hope Strategy vs. Consistent Growth StrategyThis table shows how much the old buy-and-hold strategy costs investors. It’s very volatile and unpredictable and will cause many sleepless nights and put a strain on relationships with your spouse at times. It will delay retirement and can also destroy them, depending on your age. Anyone over the age of 50 should not be using the buy and hold if they want to protect and preserve their wealth and lifestyle. I won’t go into how investors have Stockholm Syndrome because of how the financial system created the Buy-And-Hold strategy and more or less created all the tools and training to advisors to carry it out in order to keep the stock market rising over the long run. It’s not so much the advisors but rather the financial system as a whole.Just look at the annual costs, returns, and volatility of the two different investment methods to see how much you may be paying for underperformance and the use of a high-risk strategy.In the past couple of months, I have temporarily turned my focus in my weekly articles to be more about You, the trader, and the investor. In my last post, I shared the brutal truth about how individuals are the root cause for losses, and it’s because they don't know who they are on a deeper level or where their strengths and weaknesses are for their given personality.Give Me More Trades, And I Will Show You More LossesThis week I chatted with an individual who said he needed more trades to make money and that holding cash at times is not how money is made. He went on to say that paying for investment signals that held cash does not justify the cost of the subscription and that he must trade more to make money. If you have been reading my work for a while, then you likely can hear me moaning or see me squirming in my seat with my eyes rolling because people with a mindset like that are destined to fail.Unfortunately, most traders and investors think they need to trade frequently to make money because they believe that the more trades they make, the more opportunities they will have to profit. This belief can be fueled by the market constantly moving and that traders must always be in the market to capture these movements.However, this is only sometimes true. Frequent trading can lead to decreased profits or even losses, especially if the trader does not have a clear strategy or plan, which most do not. While trading frequently can lead to increased transaction costs, the real issue is that it leads to emotional trading, where traders make decisions based on their emotions rather than a rational analysis of the market, leading to poor decision-making and further losses. SPY 30-Minute Regular Trading Hours Chart Example:The chart below shows my Panic Buying indicator. This red line located at the top of the chart is the FOMO level. When it is above the blue horizontal line, the average trader and investor are buying in fear of missing out on a further move. What happens is the stock market starts a rally, and everyone quickly jumps on board and chases the price higher. This is when the red indicator line spikes and holds above the thin blue horizontal line. I won't go into the details, but we can see when traders are doing the same thing, which is a contrarian signal as we know that the price is likely about to reverse and fall.I also have the other side to this opportunity, which is my Green FOMO indicator, which tells us when everyone is selling, and a reversal and rally is about to start.My point with this chart and indicator is to show you how the average trader is driven by their emotions. In a down trend like 2022, when they buy, they are buying at a high. They are like a school of fish or a flock of birds, all doing the same thing simultaneously, and it's obvious and predictable.If you enjoyed this article, please share it with others, and be sure to join my free newsletter and have more articles like this delivered to your inbox.The Reality And What It Means For YouIn reality, it is often better for traders to focus on developing a solid trading strategy and plan and then implementing it with self-discipline and patience rather than trying to trade frequently in the hopes of making quick profits. This way of trading involves taking the time to thoroughly analyze the market, identifying good entry and exit points, and setting clear risk management guidelines to help protect against potential losses. To the active emotional trader without a written detailed strategy, this will naturally feel slow and boring to implement. It may even feel a little more like work vs. the gambling rush you may be secretly addicted to. But, by taking a more measured and disciplined approach to trading, you can increase your chances of success and profitability over the long term.As I always tell traders, if something feels slow or boring, it means you have a system in place, things figured out, and that you are in control.If You Manage Losses, The Profits Will ComeSorry You Are ScrewedIt does not matter if you are a trader or an investor. If you are not a long-term thinker and planner, willing to sacrifice your short-term emotional trades with no regard for position sizing or risk management, and you lack the self-discipline to wait for high probability trades, take profits, and exit trades not working out - sorry, but you are screwed, and no one can help you but yourself. Until you decide to treat trading and investing as a business vs. a lottery ticket, you will continue to suffer massive multi-year drawdowns and take 30-75% losses because you love a stock or asset, which by the way, does not love you back. That stock or asset does not care if it ruins your retirement plans. I show you why only price pays here, not our emotions, news, or opinions of others. A great example is Tesla. It's down over 70% and is the worst-performing stock this year in the S&P 500. Is it a great company? I think so. Is it going to continue to grow and expand? I think so. Do I want to own shares? I do, but why would we hold onto an asset went it's falling? We know we can always buy it back later at a better price, or worse case, we buy it back at a higher price. But it's not like it's a one-time opportunity to buy the stock. The good news is that we can use technical analysis to know when an asset trend has reversed and exit positions early to lock in gains. Technical analysis is how we generate above-average returns. Just in case you are wondering, my analysis has it falling to $65-69 per share in 2023.From Now – 2023 Is Going To Be Life ChangingEvery week I remind investors I work with that now is not the time to expect to make huge money. Instead, it is about capital preservation. Focus on not losing; growth will naturally come in due time.My team and I created a proprietary ETF portfolio for investors who want to avoid substantial market swings and reliably grow their accounts with less stress and more enjoyment. And believe it or not, this CGS strategy can also be AutoTraded, meaning that once your AutoTrading account is set up and funded, your money will be invested without you having to do anything else.If you have any questions, my team and I are here to help you safely navigate both bull markets and bear markets with our Consistent Growth Strategy.
What type of trader or investor are you?

What type of trader or investor are you?

Chris Vermeulen Chris Vermeulen 23.12.2022 20:29
Trading and investing are much more complex and challenging than most people think. While countless books have been written about how to trade and invest, most skip over what I consider to be the foundation and most important area – You!The Brutal TruthThe financial markets are driven by fear and greed. Most individuals find this costly as they get sucked into large news-driven moves in the market that often quickly reverse direction. Or they fall in love with a stock or commodity and decide they can't sell even when it's pulling their entire account balance down, causing serious financial harm.The brutal truth is that if you don't understand what type of personality you have and how to control your emotions, then you are doomed before you even get started.Also, if you don't understand where you stand within your trading skill set, and your available time to learn and focus on the markets is limited, your results are also doomed.It does not matter how well you can read the charts using technical analysis if you don't fully understand who you are at an emotional level, and then use strategies that fit within your capabilities and available time. Still, technical analysis is critical for your success.Trade In A Way That Makes It Simple and FunI prefer swing and position trading to get the most out of my time and the market and live the lifestyle I want. Keep in mind am not a full-time trader; I am a dad and adventurer who semi-retired at the age of 27, so I could pursue all kinds of fun things. I do not want to watch the charts all day, as it's a huge waste of time for my personality, trading/investing style, and ultimate goals. Being married to the charts all day is only for day traders and those who want to become full-time traders aiming to trade a lot. But as most of these people figure out eventually, full-time trading is a JOB, is less fun than they initially thought, is more stressful than anticipated, and is super time-consuming.My main focus is on slow trading styles, with the bulk of my trading and investing accounts using a risk-controlled growth strategy. There are times when the market simply does not generate any low-risk opportunities, and I have gone a few months without placing any trades, and I'm fine with that. Generally, those are times when stocks and/or bonds are falling, and cash is the best investment for that market condition.The Good NewsThe good news is that I have mastered these shorter time frame investing strategies (Swing/Position trading). These opportunities pop up on the chart every few weeks, giving me two huge benefits. The main one is that it satisfies my urge to trade. And why is this important? Simple. Traders are naturally addicted to being active and feel they need to place trades often. If your primary trading strategy is not giving you any trades, you can become stir-crazy. You eventually search for something...anything...to trade just to satisfy this urge. This leads to bad trades and can actually create a bad habit of straying from what you know works to a more random discretionary trading path that you do not/should not go down.The other major benefit of trading within your personality type, skills, and available time is that you enjoy the process and feel you are in control of your future.It takes time, skill, and self-discipline to refine a strategy, so it's repeatable and not rooted in emotion. No matter what type of strategy you choose to trade, one of the most critical skills that separate highly successful traders from the rest of the pack is the ability to watch the action in the market and execute trades based on what the market dictates vs. what you want or feel like trading. That's a very different perspective than simply executing trades based on what your internal emotion dictates.When you understand market dynamics, you can translate knowledge into profits. A well-thought-out, rule-based system prevents you from making impulsive decisions. When you are prepared for every scenario, you won't be tempted to react emotionally. You'll take action based on proven technical analysis and your rules instead.Technical Analysis Makes You BetterTechnical analysis isn't just a method to analyze market action; it is a foundation from which to work. It's about seeing cyclical patterns and understanding that there is an order to them amidst what might otherwise seem confusing and chaotic. Once you can understand the motivations of market patterns and anticipate what might occur next, you'll see that even though market conditions can change, there's still a cyclical movement of capital through the markets. The market is not random. There are consistent psychological motivations of humans at play, and there are consistent patterns in the market structure which I show and teach weekly to fellow traders and investors who want to improve their trading and protect their wealth. And to take things one step further, the exact strategy I trade with my retirement capital can be automatically traded for followers in their own accounts. This keeps things simple for those who are busy and don't have the time or desire to learn how to trade the markets themselves.Technical analysis will help you analyze the past and allow you to revest your capital into new assets rising in value so that your account consistently reaches a new high-water mark every couple of months - just like our Consistent Growth Strategy does for our followers.
Why Gold And Oil Falling In Value Are A Bad Sign For 2023

Why Gold And Oil Falling In Value Are A Bad Sign For 2023

Chris Vermeulen Chris Vermeulen 18.12.2022 16:31
In the past two weeks, stocks have struggled to break through resistance and extend the holiday rally. I wrote about it in the post Stock Indexes Rejected At Resistance Signal Another Correction. But what is a more bearish sign is seeing commodity prices starting to fall. There are a couple of reasons this is a warning signal for traders and investors, and I will show you exactly what they are.Reason #1: Equity and Economic Cycles Signal Market Top and RecessionIn the diagram below, you will see two cycles. The blue/green cycle is the stock market. Stocks typically lead the economy as savvy investors can see when businesses, in general, are expanding or contracting, thus telling them when they should buy more shares or start selling. As you can see, energy and precious metals are the last assets to do well before the stock market tops. Both topped many months ago. Having said that, precious metals have had a decent rally in the past couple of months, but that rally should not be trusted. In this post, I will talk about energy and precious metals. In a future post, I will cover the next two sectors, which have been doing exceptionally well this year and are holding up the best - Health Care and Utilities.Assets Peak In A Predictable OrderWhile falling commodity prices signal potential easing in inflation, it's not necessarily a good sign. That's because assets peak in a predictable order: bonds, stocks, and then commodities.Without turning this post into a rant, I should mention that what I share here is investing 101. It’s been my mission with my trading and investing newsletters since 2001 to help as many individual investors as possible avoid market corrections and bear markets and also profit from volatile times when most others are losing money.So, when I speak to an investor on the phone who is 40+, suffering from the old buy-and-hope investing strategy with big drawdowns, it makes me worry. If you have money with an advisor who has just plopped your money into stocks and bonds using the buy-and-hold strategy, please know that 2022 – 2025 could be VERY difficult times. I believe that what is about to happen next will delay or destroy your retirement if you don’t have a plan to preserve capital.While almost everyone suffers from the passive, no-brainer buy-and-hold strategy, which a 10-year-old could do for you, it is not the way you should have your money managed. You are being tortured but don’t realize it because you think it’s the norm, and that’s because you likely have Investment Stockholm Syndrome.Crude Oil Prices Continue To PlungeCrude Oil has fallen to the lowest level in over a year, suffering a weekly loss of -10%. Oil has given back all of its gains for the year and is taking a toll on energy sector stocks. As investors see businesses slowing and a recession in the near future, the price of oil begins to fall. A recession often means less traveling, slower sales, a decline in shipping, and less product demand. Oil falling means savvy investors see tough times ahead.Gold Miners Weekly ChartGold stocks have been out of favor for a long time despite the recent rally, which has spark a lot of interest recently. Subscribers and I owned GDX with our Best Asset Now Strategy and sold it for a quick 7% gain this week. We sold just before the price topped, as the technical analysis charts and indicators told us to get out.The most important thing to understand about investing is that the only way we make money is when the price of an asset moves in our favor. No news or fundamental data will protect you from falling prices. Moving to cash and revesting capital into assets that are rising in value is the best way to secure consistent growth. I talk about this in more detail in the post Only Price Pays.Reason #2: Commodity Index ETF – Weekly ChartCommodities tend to rally in the late stages of a stock bull market. This is because stock evaluations become high and are no longer a fair value. Thus, investors turn to alternative assets, and physical commodities happen to be the asset of choice. As you can see in the chart below, commodities topped in June 2022, five months after the stock market topped in January 2022. The DBC commodity index is clearly in a Stage 3 market phase and on the verge of breaking down into a Stage 4 decline (bear market).Concluding Thoughts:In short, investors no longer want to own stocks, and they don't want commodities. Going forward, investors will start liquidating positions, possibly for many months, in all asset classes until a new level of equilibrium has been found. This is a perilous time to own stocks and commodities if your capital is being invested with the buy-and-hope strategy. Should this be the case, I feel for you because if you are 50+, your retirement is about to be threatened at the worst possible time in your life.2022 has been an excellent year for those investing with the Consistent Growth Strategy alongside me as we actively use my ETF asset hierarchy allocation. This super-conservative strategy, with a max drawdown of 5.96% since 2007, packs a powerful punch with an average compounded return of 15.62% yearly. This year we keep hitting new high-water marks consistently: May, Aug, Sept, and again this week.If you are concerned about your investment account, and your retirement then you should know there is a DIFFERENT way to invest. It goes against everything you likely have been taught/brainwashed to think when it comes to how your money should be invested and protected. My ETF strategy is simple to follow with 4-12 trades per year, and if that’s still to much for you, then you can have it autotraded in your brokerage account at no additional cost, as its part of my investment newsletter service.As always, I believe in baby steps, so if you have your money invested with an advisor, you can simply have some of your capital autotraded outside of your advisor account. What you will save in advisor fees, will cover the cost of the newsletter making it a NO COST investment upgrade and for you to test the waters before wanting to have more of your money actively protected for you.
Stock Indexes Rejected At Resistance Signal Another Correction

Stock Indexes Rejected At Resistance Signal Another Correction

Chris Vermeulen Chris Vermeulen 15.12.2022 23:26
Stocks struggled with overhead resistance for the past week. While seasonal trends usually favor a year-end rally, this year's rally may already have finished. January will be the month to watch. If the market closes with a positive January, we almost always have a strong year for stocks. But if not, we could be in for a doozy of a bear market in the first half of 2023.This week we had more hawkish Fed talk on Wednesday, suggesting that rates will remain higher for a longer period of time. This week's economic reports for November showed a drop in retail sales and manufacturing, which raises concern that the economy is weakening. Falling bond yields are also hinting at a recession in 2023, as are falling commodity prices. Stock indexes look to have had an exhaustion gap higher, followed by heavy institutional selling after the CPI data came out. This further confirms my thinking that money managers are unloading shares into every rally possible before the next major leg down for stocks. Dow Jones Index – Daily ChartThe DIA ETF has failed to break out and extend past the August high. There is potentially a long way for this index to fall before finding support at the Oct lows. The next couple of months could be rocky for the buy and hold hope investors who have Stockholm Syndrome and refuse to manage risk and, by doing so, turn a blind eye to protecting their capital and retirement. S&P 500 Index – Daily ChartThe SPY index ETF has been rejected at its falling trend line again. And while my trading strategies never use falling or rising trend lines, this goes to show how they can help you spot possibly resistance levels on the chart. I don’t show the 200 SMA on this chart, but it also is at the same level helping to act as overhead resistance.When The Going Gets Tough, The Tough Get Out!Having a trading strategy to follow makes all the difference in being able to see what the market is telling you so that you, in turn, can apply that knowledge to profitable trades.Luckily, a few days ago, my trading strategy provided a market sell signal after confirming the technical analysis, cycles, sentiment, and volume flow became weak and indicated that lower prices would likely to happen next.The nice thing about following price action using technical analysis and following strict position and risk management rules is that we can avoid market corrections and profit from them at the same time. 2022 has been an excellent year for those investing with the Consistent Growth Strategy alongside me using my ETF asset hierarchy allocation. This super-conservative strategy, with a max drawdown of 5.96% since 2007, packs a powerful punch with an average compounded return of 15.62% yearly. This year we keep hitting new high-water marks consistently: May, Aug, Sept, and again this week.I recently chatted with a subscriber investor who loves how I navigate these markets and manage the positions. He said he has NEVER had any paid-for-investment advice tell him to move his portfolio to cash - which is what I do, FYI. He then went on to say that he never realized the importance of being right out of the market and in cash at times. While he stated he does not make any money sitting in cash, he sure loved watching the markets fall without him, something equally important as making money, and has learned a HUGE lesson this year following my investing signals.What I do is different. Many investors have extreme difficulty breaking free of the old-school thinking of always owning assets. This same investor said he has told many friends and family about this way of thinking, but they are afraid of change. And even though they are down 15-25%, they are not ready to be free of the buy-and-hold torture method.With that said, subscribers and I entered a new position to try and profit from this next market move, and so far, things are looking as promising as always. 
Investing Differently For An Uncompromised Financial Future (Part 2)

Investing Differently For An Uncompromised Financial Future (Part 2)

Chris Vermeulen Chris Vermeulen 13.12.2022 18:31
In this article I will continue to explain what INNER-Market Analysis is and how you can benefit from it. If you have not yet read the first part of this you can read it HERE.What Is Really Going On With YourEmotionally Driven Investing Results?Why do we feel the need to over-analyze our analysis? Could it be that the habit is hiding a major psychological glitch? Maybe it’s really a desire for control.The need for information and confirmation fulfills a major need in all of us: the need for certainty. This need is also a primal human desire. No one likes to feel out of control, and the market can often make you feel that way because it can be uncertain and chaotic.When the winds of change blow, the need for certainty can kick in and override the proper decision-making tools that serve you as an investor and trader.Particularly at times when we feel the wind of change blowing around us, this need for certainty becomes an overriding desire. It makes us prone to doing all those things we know will not work for us as an investor.Your feeling to play it safe can mask a deep fear that goes right to the core of your very existence. Uncertainty makes you fear for your life. And it’s like being that bullfighter staring down the bull without taking action. You have to take action and overcome the fear.On the flip side, if you feel the need to trade fast-moving stocks and think you need to always have your money invested in positions, then you likely have a very different issue you are dealing with. This is the most common problem and misconception among both active traders and investors, and leads to a lot of trading, is highly emotional, and churns your account without any real growth.Knowing your personally type is a great first step in resolving these issues. In a previous post called A Valuable Lesson In Knowing Your Personality Type For Investing, I share the pros and cons of not knowing your personality type and a fun test that will tell you how your brain functions and perceives situations.You cannot know the outcome of an event that has not yet happened. All the analysis in the world will not guarantee that you are on the right side of a trade. I know that you don’t want to hear this, but your over-analysis serves as a mental safety net that cocoons you in an illusion. You think that you can predict with a higher degree of certainty the most likely outcome of an impending move in an investment.There are only three things you can know for certain when you put on a new trade, no matter how much time you spend on your analysis:1. You know your entry price.2. You know where your stop is.3. You know your position size.Beyond that point, you are in unknown territory. Deep down, every trader and investor knows this, even though we try to override this deep truth with the tools of our trade and the research and analysis we do.Please don’t get me wrong: I am not asking you to abandon your research and analysis. It is a very useful tool to give you a trading edge and should be used. However, analysis is just that: a tool and not a means to an end and I explained Why Technical Analysis Is Critical for The Success Of Traders And Investors in a previous post.If you can become aware of the fact that hours of analysis is actually stopping you from making money (rather than contributing to your success), you may want to look at analysis in a new way, which is what I help individuals figure out through my weekly articles and stock market signals newsletters.You might want to ask yourself at what point your need for analysis, reading the news, and other opinions becomes a distraction and begins to cover up other issues, like the fear of uncertainty and the need to be right.Self-awareness and self-observation are essential skills we need to sharpen in order to become better traders and investors.Complex things aren’t always better. For me, I think that the simpler things are, the more profound they will be. Generally, individuals are attracted to complex methods and systems. Complexity, however, introduces risks of confusion and analysis-paralysis.Turning Market Noise Into Investing SignalsThe chart below filters out all the market noise and converts it into black-and-white data, but in this case, green and red trading and investing signals. This is the daily chart for trading, but I have created a similar strategy on the weekly chart for longer-term passive investors to ride bull markets up and to avoid and profit from falling prices.Concluding Thoughts:Now that you know more about INNER-Market analysis from Part 1 of this article, you can choose the style of trading that fits your personally, available time, and skills that you feel comfortable using. These would be swing trading, position trading, and active investing.Next, you need to select a few different technical indicators to apply. Remember, each must measure a different aspect of the market to give you that three-dimensional view of the market. I share the indicators I use in my book.INNER-Market AnalysisAs Mark Zuckerberg said, “The Trick ISN’T ADDING STUFF. IT’S TAKING IT AWAY.” Nothing could be more true. If you want to be a winning trader consistently, you’ve got to take baby steps. You need to learn one area of the market at a time and use only the best indicators and tools possible.If you want to learn how to identify and trade stock market rallies and declines, subscribe to my Best Asset Now Sector Trading Newsletter or my Consistent Growth Strategy for reliable long-term account growth.
Investing Differently For An Uncompromised Financial Future

Investing Differently For An Uncompromised Financial Future

Chris Vermeulen Chris Vermeulen 07.12.2022 23:42
I am going to teach you how to see the markets from a third dimension using INNER-Market analysis. It’s the study of what affects price movements, things like volume, cycles, volatility, and market sentiment. Each area provides excellent insight into when the price of any asset should move, how far, and how fast. By knowing this type of information with a high degree of certainty, we can benefit greatly and enjoy an uncompromised retirement.I am going to show you the difference between single-price analysis and INNER-Market Analysis. If you place your hand over one of your eyes and try walking around the room. With only one eye open, your field of vision is limited, and your ability to visualize your surroundings is severely restricted. Most importantly, you have no depth perception. This is how most investors make their trading decisions, with a one-dimensional view of their investment. Now drop your hand and look around the room with both eyes. You can instantly see where everything is located and, most importantly, the distance from you. You benefit from the three-dimensional depth of the room and all its furnishings.If you have ever been to a shooting range, then you likely observe that 99 percent of people fire their pistol or rifle with only one eye open. But those who have been highly trained often fire with both eyes open for a clear field of vision.Would you have an advantage if you tackled your trading the same way, with both eyes wide open?INNER-Market Analysis adds depth to your trading decisions. So as we go through this topic together, remember to keep your eyes wide open and have a clear field of vision. The best traders in the world have an uncanny ability to see the unseen. And this is because they understand and use all the related parts of a particular investment. They understand what drives the price and have created a trading strategy that keeps the odds greatly in their favor. This means more times than not, you can forecast market movements and be appropriately positioned prior to a move.INNER-Market analysis gives us great insight. Don’t limit yourself to single-price analysis to determine market direction. Many popular single-price-based indicators are useful to one degree or another for analyzing market behavior. But they are most effective when used in combination with INNER-Market Analysis to get a three-dimensional view of the market. This is not a case of “either-or.” Single price indicators should be used as a confirmation filter for INNER-Market analysis. In this manner, marginal trades can be filtered out and avoided.This distinction can be visualized by contrasting the rectangle on the left side (representing single-price analysis) with the three-dimensional cube on the right side (representing INNER-Market analysis).INNER-Market analysis should be your foundation for analyzing the market. It has the strengths of single-price analysis while adding multiple other dimensions to the analytic framework so that the behavior of the market can be analyzed internally as well as externally.Market Analysis Styles ComparisonI have outlined some of the distinctions, from a practical investing standpoint, between INNER-Market analysis and single-price analysis in the table below:One mistake some Investors make is not doing anything at all. Either they struggle to understand the trends and potential at any given time and freeze with analysis paralysis, or they use the old-fashioned buy-and-hope strategy, which carries a very high level of risk for all investors over the age of 50.There’s a fine line between action and inaction and understanding when you should revest your assets. Moving your money into assets that are rising and ditching assets falling in price is the best way to take advantage of tax loss harvesting and for your account value to rise, even when the prices of stocks and bonds are falling. But analysis paralysis is never good because it can get you into a cycle of waiting and holding, which can be highly stressful and costly during market corrections.Most investors and traders do not realize that exiting losing positions and booking the loss can be a good thing. In this article, Your Trading Losses Explained, And How to Turn It Into Profits, you will get a better understanding of how this works. You will learn how to leave the old buy-and-hope strategy and start investing in a way that only holds assets in your portfolio that are rising in value. It’s the polar-opposite of how everyone else invests and experiences the market.Let’s go a little deeper into analysis paralysis, because if you manage your investments, and rode the stock and bond market down in 2022, then you are victim, and you needs to resolve this before the next stock market correction takes place.Analysis Paralysis occurs when an individual becomes so lost in the process of examining and evaluating various points of data that he or she is unable to make a decision with it! Imagine being a bullfighter paralyzed in the ring because you are unsure which way to turn. In seconds the bull takes action and charges, and if you wait, then it’s too late. Inaction can kill you. As an investor, it means missed opportunities that can easily lead to miss profits and large losses in a portfolio.Often when examining a chart to decipher which way the price will move next, the pros outweigh the cons or vice versa, and an individual has a clear direction and decision to make. When analysis paralysis sets in, it could be because you never feel comfortable stopping his or her search for additional criteria to examine in hopes of a definitive buy or sell signal. It could be that the pros and cons are equally weighted. Or it could be a personality trait of indecision that needs to be identified and overcome because the individuals allow themselves to get stuck in a cycle of inactivity. It’s like writers block or any other inactive moment that causes lockup or missed opportunity. The brain processes a plethora of information at once, and the outcome is that the human attached to the brain is locked up! Analysis paralysis is the trading version of information overload.Investors can get overwhelmed by multiple scenarios, possibilities of movement in price action, and a dozen or more indicators, and for every case, there’s an opposing view in the mind of the investor. The conflicting views create confusion and make it almost impossible to take action and execute trades with clarity and discipline.I had my fair share of analysis paralysis before I learned to keep things simple. I used to delve into all the details, putting together speculative theories that sounded great. But when it came down to pushing the button to execute a trade, I couldn’t do it!Example Of Too Much Information – Analysis ParalysisAs you can see from this chart loaded with indicators, it is difficult to figure out what price will do next. Price has reached and is trading under the 200-day moving average and is testing the upper Bollinger band which is should act as resistance. Other indicators are trending up and down, providing mixed signals.My market trend signal allowed us to buy GDX for 7% profit in just a few days.The vast information available on the internet to feed your thirst for more information is literally endless. You can search, search and search some more until you’ve paralyzed your mind. The dividing line between useful and necessary analysis and over-analysis is fine. Whether you are a technical trader, a fundamental trader, or a combination of the two, we are all susceptible to analysis overload. Our lust for analysis cannot be satiated by the sheer amount of information available to us. But we do have a choice: We can say, “enough is enough.”It took a lot of self-discipline to regain control of my emotions and actions. I am a huge believer in being around motivational people or listening to motivational content of all kinds. When driving my truck, I tell Siri to play YouTube Motivational Speech, and I just randomly listen to them. I never know who is speaking, but I am constantly uplifted and energized. It is incredible how many different ways the same points and theories can be explained.It is also essential to understand that whatever you think about and say is how your life tends to unfold and be experienced. I dove into this a while back in a post called Investors With Positive Self-Talk, Proper Expectations, And Commitment Succeed.You probably know as well as I do how this relentless search for more information paralyzes your decision-making processes. You miss the good moves because you weren’t quick enough to figure out your signal. You miss the good moves because you were otherwise engaged, looking for more confirming indicators, even when you “knew” that the move was imminent. This leads to frustration.We can easily justify the need to over-analyze, particularly with our current economic climate. We are at the beginning of a major transition from one major cycle to another. Individual investors are nervous, and you are probably trying to analyze it all but are not sure exactly what to do.In Part 2 of this article which I will publish in a few days, I will show you what is needed to become more successful with your trades and investments with less effort, stress, and account volatility. Until then, be sure to read up and learn how you can turn losing trades into a money-making opportunity in the link mentioned above, and how you must overcome negative biases and thoughts with positive self-talk.Also, feel free to surf my website and learn how you can use my INNER-Market analysis signals to help with your trading and investing success.
Investors Have Stockholm Syndrome And How This Effects Their Retirement

Investors Have Stockholm Syndrome And How This Effects Their Retirement

Chris Vermeulen Chris Vermeulen 01.12.2022 16:31
In an article I wrote earlier this month, I introduced the concept of investors suffering en masse from a form of Stockholm Syndrome. Traditionally, this term has been applied to hostages when they develop empathy for their captors. The hostages begin to identify and to even assist with their captors' cause. The most famous case, and what arguably brought it to mainstream understanding, was that of Patricia Hearst, a kidnapped newspaper heiress who, during her captivity, was brainwashed into robbing banks with her captors in the mid-1970s.Being that my brain always has one dial tuned toward trading and investing, I noticed a line of thinking beginning to form surrounding many of the conversations with investors and the psychology behind Stockholm Syndrome.Investor Story: I recently spoke with an investor on the phone who was interested in learning more about how I invest my capital. During our conversation, he told me about what he does for a living and how he accumulated his $1 million-dollar investment account. This man worked a blue-collar job his entire life, put away a few thousand dollars every year for 30+ years, and followed the buy-and-hold strategy. It worked for him to build wealth because time was on his side, but it wasn’t sunshine and roses, and I’m going to tell you what why.Don't be fooled by passive investing success. While the buy-and-hold worked during the first half of his life, it was challenging to weather bear markets along the way. For example, when stocks topped out in early 2000, the stock market took over seven years to get back to breakeven. During the bear market, he spoke with his advisor for investment advice, and he was told to sit tight, ignore the falling price, and if he held through it, he would be fine. But the financial distress, sleepless nights, and relationship issues he had to endure when he was down more than 50% in only two years was a struggle and not pleasant, to say the least.He then painfully watched his account claw its way back up for another five years, as the stock index reached its previous high. But the rollercoaster ride was far from over. Within a month of reaching a new high, the stock market collapsed again for another 1.5 years. This was the 2008 global financial crisis in which he had to watch his investments fall more than 55%.Once again, he called his advisor for support, but he was much more stressed and concerned this time. He was told the same thing by his advisor, which cost him his marriage during the last bear market. The advice was to ignore the bear market, hold, and don't sell; everything would be alright once the market recovered. After 13 painful years, the stock market returned to a new high in 2013. This poor man suffered a total of 13 years with no growth and paid his advisor every year for the terrible life-changing experience. And even though the stock market returned to the previous high, the investor was still down 15% because of the AUM fee.Investors around the world are challenging and breaking free of the status quo Buy-And-Hold strategy. This white paper shows how you can too.What I find frustrating is that both bull markets (2002 and 2008) rallied over 100% from their lows in order to return to their previous high. Unfortunately, the buy-and-hold strategy does not allow you to participate in these powerful and highly profitable multi-year rallies. Another thing that an active investor can profit from is falling prices during bear markets. There is a huge opportunity, and with the use of technical analysis that follows price trends and stock market cycles, we can manage our risk and positions accordingly.Fast forward to 2022-23: This investor, who is now in his 50s, has built substantial wealth through his dedication to saving and investing. In 2021 when he closed his eyes, he could see, feel, and smell his retirement, which was just a couple of years away.But then, stocks topped, and both stocks and bonds plummeted in value. This started to push his retirement further into the future, and with inflation surging, he needed to downgrade his lifestyle and spending habits. All of this happened within the first few months of 2022.His anxiety started to build as he watched his wealth shrink week after week. Finally, he knew something had to be done because there was no way in hell he was going to postpone his retirement another 7-13 years this time.Once again, he called his advisor, desperate to protect his retirement. To his surprise, even after telling the advisor about his situation, wants, and needs, the advisor recommended he continue to stick with the buy-and-hold strategy and just wait it out. You can imagine how this investor felt when he heard the same "advice" for the third time, which didn't support his current needs or risk tolerance.The investor said he blew a gasket, fired his advisor, and moved to cash until he could figure out what to do with his investment account. His search led to him calling me to talk about active investing. He wanted to learn more about technical analysis to identify when an asset was rising or falling so he could manage his positions and not hold onto assets falling in value. Lucky for him, what he wanted to learn about is exactly what I specialize in doing with my own money.Once I explained how the four market stages, stock and economic cycles, technical analysis, and position and risk management from a high beginner level, a lightbulb went off, and he had the AHA moment about how to invest for growth without having a large downside risk. He was over the moon excited about this newfound knowledge and investment clarity. And he made a comment about how he had no idea that we could avoid market corrections and bear markets. He said buy-and-hold investing was beyond painful, it was torture, and he couldn't believe that he was brainwashed into thinking that was just part of investing.My mission is to help as many investors as possible retire soonerListening to this man's story solidified, once more, the driving force in my life. I want to help as many people as possible avoid these adverse life-changing events with their stock and bond portfolios. While I only shared one story with you, almost everyone I speak with has had a similar experience, and they are now on a mission to protect their capital in order to preserve their retirement and lifestyle. They know holding stocks and bonds is not a safe strategy for those in the later stages of their life or who have substantial capital.In fact, there is a great white paper focusing on how women investors have a more difficult time because the financial industry is more male-driven, and they don’t support or connect what women want and need when it comes to investing.Investors at large have Stockholm SyndromeIn large part, long-term investors have been brainwashed, and as a result, they struggle to break free of the financial strategies that we were all told to follow since saving the first penny.In this article, I talked about the buy-and-hold strategy, but other topics I’ll cover in my next posts will shed some light on their flaws:60/40 portfolio splitPut your age in bondsDiversify, diversify, diversifyOnly a financial professional can safely help you save for retirementThese sub-par strategies and lies cause the most harm If your investment portfolio for stocks and bonds has the above characteristics and you are nearing retirement, then you better do something to protect your capital before it's too late. If you don't, once the end-of-year rally ends, the music stops, it lights out, game over, kaputski for retirees.People are so worried about missing out on a stock market rally that they will hold their losing positions and risk their retirement. If this sounds like you, then look out because you don't know what you are doing, and you're investing based on pure emotions (FOMO) without position or risk management rules in place. I can promise you that it does not end well. It works during long bull markets, but you will give it all back once a bear market runs its course.While I won’t go into the technical details and charts in this article, just be aware that both stocks and bonds could fall another 20-47% from the current levels. Understand, I am not saying it's going to happen, but the charts are pointing to very tough times ahead.If you remove your fear of missing out on a stock and bond rally and think with logic, tell me what you would rather do.Hold your positions in case stocks and bonds rally, but know if they don’t, you could lose money for 3-10+ years.Protect your capital, move to cash, or hold only assets rising in value so you can profit from falling stock prices and retain your current level of wealth and revest it later once the market bottoms.A common problem with investors is that they start looking for a solution once they realize they need one. And once an account value falls so far, you will become too afraid to make a move, like exiting losing positions and taking the loss. You won't want to sell because your holdings have decreased so much in value that you think a rally will start any day, and of course, you don’t want to miss that!Yet you are torn with the feeling that if the market continues to decline and you don't sell, you will not be able to retire.So, fear and indecision reign, and you end up taking the nightmare stock market rollercoaster ride, which may last many years.Most people need to realize that taking a loss is okay. For example, if you have capital losses, then you can use it against equal future gains and likely not have to pay tax on those new gains. This means you can sell your bad positions that are trending down and revest that money into new assets which are rising. Also, you can move to a 100% cash position, let the stock and bond market bottom, then revest your capital once a new bull market starts and completely sidestep the chaos.If you are nearing retirement, the buy-and-hold strategy carries a very high level of risk. Simply put, you don't have the time to wait out another bear market.Welcome to the financial Stockholm Syndrome effect or Buy-And-Hold, which I tend to think of as Buy-And-Hope.There Is Another WayOver the past 25 years, I have developed what I believe to be the most efficient and profitable ETF investing strategy I have ever experienced. It's an ETF strategy that seeks consistent above-average long-term growth with below-average portfolio drawdowns. I call it the Consistent Growth Strategy (CGS).CGS helps investors and financial advisors outperform by solving the major investment issues of bear markets and replacing the role bonds once played in a portfolio. It seeks to hold only assets rising in value.This tactical asset allocation strategy navigates market advances and declines using a combination of dividends, growth, bonds, currency, and inverse exchange-traded funds. Under abnormal market circumstances, up to 100% of the strategy allocation will be in a defensive cash position as its number one priority is to protect capital. Remember, if you avoid losses, the profits take care of themselves.
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

After This Holiday Rally, You Better Know When To Walk Away

Chris Vermeulen Chris Vermeulen 23.11.2022 16:46
This week's investor insight will make you think twice about the current stock and bond rally as we head into the end of the year. We get a lot of questions about if the stock market has bottomed or if it is headed lower and how they can take advantage of the next Major market move. Over the next 6 to 12 months, I expect the market to have violent price swings that will either make or break your financial future. So let me show a handful of charts and show what I expect to unfold. Let's dive in. We're told that "quitters never win." But is it always wise to stick with something when it no longer serves us — or worse, continues to harm us? Many years ago, when Texas hold'em poker was big and online gambling was allowed in Canada, I used to run a poker league and build custom poker tables for people across the United States and Canada. I love poker, and I still play it to this very day, but the game does require skill, a proper mindset, and self-discipline. Without all three of these things, poker is pure gambling. It's the same when it comes to active trading or investing if you lack the skills, mindset, and self-discipline. Retired professional poker player Annie Duke, who is also a best-selling author, and decision strategist who advises seed-stage Startups, says that learning when to quit is a critical skill, especially for investors. Annie states, "Quitting is a good thing when applied at the right time." If you've been following me for any time, then you know I follow a detailed trading strategy with position and risk management rules. As a result, you won't find me taking random trades or trading based on emotions. Instead, you'll find me patiently waiting on the sidelines for a high-probability trade signal to reinvest my capital. I trade differently. I don't diversify. I don't buy-and-hope, and I don't have any positions at certain times. What I do is reinvest in assets that are rising in value. And when a particular asset stops moving higher, I give up on the position and exit it immediately. Because I use technical analysis to follow price action, we can quickly and easily determine if an asset is rising or falling. Therefore, I can step aside and let the asset fall and look for a new opportunity that is rising, or hold the falling position and ride it lower for who knows how long… Unfortunately, most traders and investors do not understand how to read the markets, or they don't have control of their money. They are at the mercy of what the market does or the skills of whoever controls their capital. Let me share some of my market insight and help guide you On October 21st, I stated that retirement accounts should bottom and rally into the end of the year. Bonds were hitting 11-year lows. In short, anyone holding 20+ year treasury bonds had just lost more than ten years of investment growth wiped out.  Bonds, the highly touted safe, low-risk asset, fell over 47% from the 2020 high. It caused similar losses to the average investor portfolio comparable to the 2008 financial crisis. It was the worst selloff ever for treasury bonds that I can see on my charting platform. The real kicker is that the selloff in both stocks and bonds could have been avoided with just a little education and management. Subscribers and I happened to ride the COVID bond rally higher by 19%, exited the position, and moved to cash the day bond prices topped. It was partly luck to exit at the peak, but we would have exited the following trading session if we didn’t lock in profits because we managed our positions and risk. As the price reversed direction, we jumped shipped to one of my favorite positions, which almost no one thinks about or uses – CASH. 2022 has been a painful year for investors, and people are telling me they are scared to look at their investment statements. It now looks like bonds and stocks have started a seasonal rally that could help lift your portfolio as we head into the end of the year, but once it ends, look out! Bonds and Stock Seasonality Price Movement Daily Chart of 60/40 Portfolio You should have seen your account rally 6% or more since Oct 21st, and I think it will continue higher once the market digests the recent move up. While this may excite you, be aware that after this rally, we could see another 20-47% decline in stocks and bonds in 2023. This year-end bounce is nothing more than an opportunity to get out of the antiquated Buy-and-Hope strategy that does not work during a volatile and weakening economic environment. The next few charts, which are big heavyweight stocks that drive the market higher and pull it lower, should help you see what I see.  AAPL Weekly Chart and Potential Breakdown Apple is a heavyweight stock. When it moves, it moves the stock market. Currently, AAPL shares are in what I call a STAGE 3 Distribution phase, and if support is broken, then look out below! TSLA Weekly Chart and Potential Breakdown Tesla shares are another heavyweight, and its weekly chart paints a bleak future for holders. META (Facebook) Weekly Chart Breakdown Leads The Way Down Facebook, or what is now called META, is a heavyweight stock that has already broken down from its STAGE 3 Distribution phase. As you can see, when these mega stocks break down and unwind, individual investors who have their money managed by so-called professionals who don’t know how to manage risk suffer the most. The drop in META shares has held the tech, social, and even the S&P 500, and Nasdaq from rallying freely to the upside in the past month. When/if AAPL, TSLA, and other heavyweights break down, expect panic on Wall Street. My general rule of thumb is if someone tells you to diversify into a bunch of different assets, stocks, commodities, bonds, crypto, etc… then they don’t know what they are doing. They are a buy-and-hold believer and willing to let their own money or that of their clients experience the severe price swings the market dishes out. – Billionaire investor warren Buffet says, “Diversification makes very little sense for those who know what they are doing.” – Multimillionaire investor Jim Rogers said, “Diversification is something that stockbrokers came up with to protect themselves, so they wouldn’t get sued for making bad investment choices for clients, and that you can go broke diversifying.” The Four Stages Of Asset Prices If you think the 2022 pullback has been distressing, you better buckle up because the bear market has not even technically started yet, from my standard. Instead, in early 2023 we should enter a STAGE 4 Decline. This is when people's financial future and retirement lifestyles are created or broken, depending on how it's managed. Don’t get me wrong, I’m not saying the market will fall in 2023. I’m letting you know it's very possible, and you best have a plan in place. On the other hand, if the markets have some miraculous recovery and start a new bull market, well, you better have a plan for that also. Either way, you need a plan, and if you are a technical trader who follows price and manages positions, it doesn't matter what the market does; we are set either way. S&P 500 Bear Market Expectations 2023 The S&P 500 chart shows the extreme low that we could possibly reach if the economy and stock market fully unwind. Bonds would sell off as well until the Fed decides to step in and starts lowering the rates to try and save investors, but there will be a delay, and bonds will likely fall sharply before we see that take effect. CONCLUDING THOUGHTS:In short, without going off too much on a rant, you can read the three lies we are told by financial professionals that really IRK me. Because of these lies, individual investors must work harder, work longer and experience painful financial outcomes. What you may not know is that what you went through in 2008, the 2020 crash, and this year's correction could have been completely avoided. If you followed a NO BS investing method that tracks price using technical analysis, is simple to follow, and is uber-conservative, then your account would be sitting at a new all-time high watermark as of this week. The financial industry tells us to do all the wrong things, and almost everyone falls for the BS; it's so frustrating to watch! LIE #1: Diversify, Diversify, Diversify LIE #2: Bonds Are A Safe Investment And Should Represent A Large Portion Of An Investors Portfolio LIE #3: Speak With An investment Broker Or Advisor Before Placing Any Trade To Be Sure It Is Suitable For Your Personal Circumstances.  It's total baloney because almost everyone gets the same generic advice, buy-and-hold stocks and bonds, don't give up on it, ride out the rollercoaster, and you will be fine, trust me… Who came up with that strategy? Sure, my 10-year-old son could buy some stocks and bonds once, let it ride for 20-30 years, and be ok. He has time and not that much money, but the big question is at what age does the stock and bond, buy-and-hope strategy become a harmful and risky investment strategy? 50-ish years of age is my thinking. Knowing bear markets can take 3-12 years to recover from, someone who is 50+, planning to retire soon, or is already retired, doesn't have 10+ years to keep working and saving to avoid withdrawing funds from their retirement account. Also, the fact that they have the most wealth ever in their lifetime, they should be concerned about holding through future bear markets.  Don't be fooled. Just because everyone else has been brainwashed to buy-and-hold, aka buy-and-hope, and suffers stock market selloffs does not mean you should…  It's like the average investor has Stockholm syndrome. They have all been beaten up by the markets over and over again. They think that's how it should be. And in some cases are paying someone to take their money, plop it into the market, and do nothing with it for 10 - 40 years. They pay a % of their life savings each year to someone who has no risk and does not need to do too much of anything, while the investor suffers massive multi-year drawdowns, experiences high levels of stress, and sometimes big losses. The typical investing experience most people endure is NOT how it should be. There is a better way, and I can show you. My passion is trading and investing, having been at it for over 25 years. My goal is to help as many investors as possible to preserve their capital during difficult times and also be able to grow their wealth by trading only the most liquid ETFs. My investing strategy signals allow individuals to only hold assets that are rising in value.
How To Build Wealth Using ETFs Without Knowing How to Trade

How To Build Wealth Using ETFs Without Knowing How to Trade

Chris Vermeulen Chris Vermeulen 16.11.2022 23:39
Let's kickstart things and conduct a quick thought experiment, shall we?Who is wealthier?Someone who works eighty hours per week and earns $450,000 per year,or…Someone who works 20 hours per week and earns $250,000 per year?Insert the Jeopardy theme song here...!There is no right or wrong answer because multiple strong cases can be made for both. If we break things down into absolute terms, the person earning $450,000 has more money. However, the person making $250,000 is more productive per hour and has a lot more available time once the workday is done.Your choice speaks volumes about who you are as a person, your mindset, and the life stage you are currently experiencing. I encourage you to ponder WHY you chose the answer you did.For example...You may be in a mid-life phase, the prime of your income-earning days. You are working hard every day to build your passion business as big as you can. You want to build wealth while the going's good and while you have the energy to do so. One day you plan to slow down.Maybe you are a more balanced lifestyle person and would instead choose to make less money, work fewer hours, and enjoy hobbies or adventures outside of work with family, friends, etc. To you, wealth is more about living, not working.Again, there is no right or wrong answer. We are all in the position you are in and must do what works best for our own situation and investment personality.Ok, let's try another thought experiment…This time, we'll assume that your investment dividends and interest income pay your lifestyle expenses. Therefore, your income is separated from your time because your bills and activities will get paid even if you do zero work.Does that seem like a wealthy person and lifestyle to you?If so, then you likely have an intuitive understanding that wealth is a by-product of assets operating independently of your time. Take a moment to think about that...Wealth is a by-product of assets operating independently of your time.Does this thought provide you the idea of freedom to do the things that excite you, make the hairs stand up on the back of your neck, and allow you to spend more time with those you love?! It certainly does for me. With some of my spare time, I give a helping hand to those who are not as fortunate through local charities and fundraisers. I started the 100MenWhoCare group in our town, where we focus on raising $10,000 in 60 minutes with 100 men who donate $100 each. My daughter Mirabelle and I are part of the BrainFreeze Challenge, where our team is taking the plunge into ice-cold Canadian waters to support Mental Health for Youth programs. Did you know that suicide is the #1 cause of death for young people? I didn't and was both shocked and saddened by that statistic. Shameless plug alert - I would love it if you helped us support the cause!I also am an avid inventor who designed and created the world's first flying jet surfboard - VeFoil!How do I have time for all of this? Because my brain thinks and works differently than almost every other trader and investor, maybe even person, I know.Start making your capital work for you, and then you can help others.My life's work is helping individual investors and financial advisors become wealthier. I help them make more money with less effort and less risk by only holding assets rising in value. When that particular asset trend ends, we reinvest our capital into a different asset that has started a new uptrend.This asset revesting strategy allows investors to sidestep and even profit during falling stock and bond prices without taking any additional risks. In fact, it can reduce portfolio risk and volatility if you are committed to the revesting process.What I do is very different from the old Buy-And-Hope investment strategy of the past. You know, the one we all grew up with. The strategy pounded into us as soon as we learned what money was and trumpeted by virtually all investment advice you could find. Only now, instead of the 'big-money' we were all but promised, we get to watch as most portfolios take an ugly swan dive and will likely end with a painful bellyflop.No. Just NO. It does not need to be this way and certainly isn't in my world.What I do is the complete opposite. No Diversification, No Buy-and-Hold, No Positions at times, plus I manage positions to control risk and profits. These are things you likely don't do, and a way of investing you won't find any advisor doing unless they happen to be one of my clients.I do this by helping enlightened financial advisors and individual investors embrace the idea that by using technical analysis we are able to follow price trends very closely to know when one trend has ended and a new one has started. I only invest in the most liquid assets (stock indexes, bonds, US Dollar index). I also embrace the use of systems that operate without our time and energy, which continue to work for us whether we are sleeping, playing, or on vacation. To bring this full circle, this happens the same way that dividends will arrive and be deposited into your brokerage account no matter what you may be doing elsewhere.Ways income can be automatically generated with this new way of investingThey are:Dividend payments from index ETFsBond ETF interest paymentsShare lending interest incomePortfolio growth through revesting trades (we locked in a 5% gain yesterday in SPY)Now, if you don't know anything about trading or investing, that's fine. And if you value your time and don't want to think about managing your investments, that’s not a problem either. I'm all about being as efficient as possible and not having to do anything that can be done for me.This leads to having an asset revesting strategy executed automatically in your brokerage account. I believe human error is the reason why most traders fail to make consistent money. People’s emotions, lack of self-discipline, missing trades, incorrect trade order execution, etc., all lead to investing underperformance.For these reasons, I offer autotrading of my primary strategy at no cost. I know it's the best option for individuals to build wealth on autopilot with less risk and less stress. And I am all for a world where we can spend more time and energy with the people, events, passions, etc., that cause our cup to runneth over.The bottom line...Having an asset revesting strategy to make your capital work for you while you are boating, golfing, working, sleeping, or traveling is like having another profitable business making you money...only without the headaches.I explain exactly how this process works in .If you have any questions, I’m always here to answer your questions!
Hi Ho Silver!  Different Ways To Get In On The Action

Hi Ho Silver! Different Ways To Get In On The Action

Chris Vermeulen Chris Vermeulen 14.11.2022 15:23
Precious metal prices – gold, silver – and related miners have been bearish for quite some time now. It looks like that is starting to change. When I look at the charts for gold and silver, I see similar periods of consolidation with multiple tests of support. But even more interesting is the recent upturn in price and moving averages with some new higher highs. That makes me interested but tentatively bullish on the metals. There are many ways to participate in this sector. There is, of course, physical metal – bullion or numismatics. I’ve always liked the idea of having some physical metal that I can put my hands on. And there are many secure storage options as well. The metals sector has several popular ETFs – GLD, GDX, GDXJ, SLV, SILJ, etc. One approach would be to simply buy shares in one or more of these ETFs. That’s as easy as buying shares of stock. But, like owning stock, gains may be slow to come as we participate in the price action tick for tick. Gold Daily ChartSilver Daily ChartAs an options trader, I like to give myself a little room to be wrong on price and reduce my cost basis by selling option premiums. There are two basic ways to do that. I can buy shares and sell “covered calls” against those shares. Or I can sell puts, essentially committing to buy shares at the strike price in return for receiving an option premium. The profit and loss graph for selling a put is the same as for selling a covered call. I prefer the “selling puts” strategy for its simplicity and relative ease of rolling out in time and up in strike price when there is an uptrend in the underlying shares. I don’t own any shares with this strategy. I’m just committing to buy shares at a certain price for a certain time period and getting paid to do that. So, it’s important to only sell puts for the number of shares I’m willing to own at the strike price sold. Selling PutsWhile the option selling strategies presented here can work on any stock or ETF that has options, they work best with relatively lower-priced products that are under about $25. A commodity ETF such as SLV – currently trading around $20 a share -- is a good candidate. SILJ at around $10.50 a share also looks good. If we sell puts, we may have shares “put” to us at some point and will then own the shares at the strike price we sold minus the premiums collected. Having shares put to us at a reduced cost basis is part of the plan. When we sell an out-of-the-money (OTM) put, we’re methodically nudging the statistics in our favor by “buying low” when there is a pull-back in the underlying. We can alternately think of selling a put as a standing limit order to buy shares with the limit price equal to the strike price we sold. If we have shares “put” to us, we can then sell calls against the shares we now own. And the cost basis of the shares we purchased will have been reduced by the cumulative option premium collected by selling puts. Trade ManagementWriting puts and covered calls are relatively low-maintenance strategies that don’t have to be watched continuously. Once we write options, we do have to be patient and let time decay in the options we sold work for us. If the options we sold expire worthless, we can sell new options for some future expiration cycle and collect more premium. If our sold options are in-the-money (ITM) as expiration approaches, we can defer an assignment by rolling out for additional credit. In that case, we would buy back the option close to expiration and sell another one further out in time. We can usually do this for an additional credit because we are selling more time value. Upside and Downside RisksAs with any strategy, it’s important to ask and understand “What could possibly go wrong?” before getting involved. Selling puts and writing covered calls are neutral to bullish strategies. There can be sustained down trends, price shocks, and changes in volatility that can affect strategy performance. There’s always a tradeoff when selling options. In exchange for collecting option premium, profit is limited to the amount of premium collected plus any appreciation in shares up to the strike price in the case of covered calls. We may not have a great opportunity to sell option premium in every possible cycle. Keeping probability in our favor and letting time decay work for us are benefits of selling a put or covered call. As option sellers, we don’t need large up moves to make a profit. We have the statistical odds in our favor and option time decay working for us. The underlying share price can go up, sideways, or even down a bit and we can still profit. What To Learn More About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. Brian, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. If ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!Brian BensonCo-Author: Chris VermeulenChief Options StrategistTheTechnicalTraders.comDisclaimer: This email and any information contained herein should not be considered investment advice. Technical Traders Ltd. and its staff are not registered investment advisors. Under no circumstances should any content from websites, articles, videos, seminars, books or emails from Technical Traders Ltd. or its affiliates be used or interpreted as a recommendation to buy or sell any security or commodity contract. Our advice is not tailored to the needs of any subscriber so talk with your investment advisor before making trading decisions. Invest at your own risk. I may or may not have positions in any security mentioned at any time and maybe buy sell or hold said security at any time.
Why Technical Analysis Is Critical for Success for Traders and Investors

Why Technical Analysis Is Critical for Success for Traders and Investors

Chris Vermeulen Chris Vermeulen 10.11.2022 14:59
Suppose you have suffered from significant losses or have a large account drawdown during market corrections or bear markets. In that case, your investing process has one or possibly two critical flaws. The brutal truth is if you can’t control these two problems, you will never experience long-term sustainable growth or avoid large drawdowns in your trading and retirement accounts. So let me tell you what they are to help you work towards correcting them.The First Problem: It could be that you don’t have a handle on your emotions and self-discipline to follow your strategy and pull the trigger to enter, take profits, and exit trades when you should control risk and positions.The Second Problem: Maybe you are trading without rules because you need a clearly defined strategy to follow. Having a strategy tells you when to enter a position, take profits, and, most importantly, when to exit if things go south.The good news is that if you can resolve the second problem, which technical analysis helps do, the first problem becomes much easier to overcome.The bad news is that only you can overcome the first problem of managing your emotions and self-discipline, which is why it’s called “self-discipline.” No one else can do this unless you have someone execute the trades for you or have a strategy auto-traded in your account, which removes you from the equation of knowing what to do and following the markets. However, if you are serious about becoming a successful investor, my guide, “Investors with positive self-talk, proper expectations, and commitment will succeed,” will help you get a handle on your emotions and self-discipline issues.Mastering The Process For ProfitsThe technical traders flow chart below shows how market data gets processed, analyzed, managed, and traded. It is a relatively simple process, where we take the raw price data and some indicators to identify which direction the asset is moving, both from a long-term and a short-term point of view.Once you know the direction an asset is headed, you can apply the appropriate strategy and then execute trades to profit from the asset. Depending on if you are a swing trader or an investor looking for more significant gains, you will use a different strategy.Why Technical Analysis Helps You SucceedTechnical analysis allows us to focus strictly on price action to help put the odds in our favor. As investors, we know that we only experience account growth when the assets we own increase in value. It is only logical to focus on the price charts using technical analysis to follow and trade in the direction of assets we want to own.This short video shows you a new way to build wealth, ReVesting, that will dramatically improve your ROI and lifestyle. I skipped ahead in to show you the benefits and how it works.Technical analysis offers us many advantages:• Technical analysis works in any time frame.• Technical analysis works with all assets: indexes, stocks, commodities, and currencies.• It allows you to find low-risk and high-probability trade setups.• It allows you to define risk and place protective stops.• It allows you to define profit potential and set limit orders.• Technical analysis removes the guesswork from trading, allowing you to create a simple, repeatable, rule-based system to generate a reliable ROI.• Through technical analysis, you gain clarity on an asset trend to be sure you only own and hold positions in assets rising in value.• Finally, technical analysis allows you to ignore news and opinions, which reduces emotional stress so you can properly execute your strategy.Concluding Thoughts:I am a firm believer in single-asset revesting portfolios. This is when a portfolio only owns the best asset at any given time that is rising in value, and when that asset stops rising, it revests the capital into a different asset which rising in value. I find that roughly 40% of the time, my active investing account is in cash, waiting for the following one of the core investment assets to start a new uptrend. These main assets are stock indexes, bonds, and the US dollar index.In my next post, we will find out what type of investor you are. By knowing the types of trades you like and your personality type, we will have laser beam focus on which strategy to use and the assets you should trade. Your portfolio must have the correct risk and position rules to protect you from significant losses and multi-year drawdowns, which can lead to high stress, and a lifestyle downgrade.
Investors with positive self-talk, proper expectations, and commitment Succeed

Investors with positive self-talk, proper expectations, and commitment Succeed

Chris Vermeulen Chris Vermeulen 07.11.2022 16:18
Investors and trader's have their quirks and habits, and are super consumers of something. One thing that I always consume is positive, motivational video clips on YouTube. I have a habit of jumping in my white F150 Supercrew pickup to take my daughter to horseback riding lessons and asking Siri to play a motivational speech on YouTube.I don't care which video. Some I like more than others, but it's always interesting to hear completely random people share motivational content. Some of it is curated of all the greats, others are from individuals. Very uplifting and I love having the hairs stand up on the back of my neck when I hear something that really connects with my current situation.I just checked my YouTube account and have this one as a favorite. It's called . I remember listening to this when I was at the gym on the incline trainer this spring, and that's because I connected with it, and it sparked a feeling within me that I enjoyed.I grew up listing to my dad's audio cassettes in his car. Now I do the same with my kids. Go figure…About three years ago now, I stopped watching any negative/dark TV shows just because I didn't like bad feelings, or being nervous/tense just before bed. I found it not to be beneficial for my mind or body, which leads me to what I wanted to write about and share today with you.Investing with intentionInvesting involves engaging all of your energies and strengths, not merely your mental ones.It means activating your inner strengths and engaging in positive self-talk, and physical action. It means both affirming what you want and being satisfied with being on the journey. It means honoring your intention, even if you have not yet reached your goal.Investing with intention means pushing your comfort zone, but it also means appreciating every nuance of investing and appreciating yourself for being conscious as you do it. It means envisioning your current and future trades and how they connect with your end goal counts as much as executing the trades which your investing strategy generates.The first step to making your investing career successful is imagining it so. Envision yourself as a person who takes all trades within your strategy with a positive attitude and who is experiencing the rewards of dedication.Investing with intention means persistently and actively affirming your goals. This is so that you don’t forget or diminish their value when you face a challenge or losses, so that you are intimately connected with both the process and possible outcomes.In a short white paper, I share how you can create a Bear Market Proof Investing Strategy. Its worth printing and reading over a hot or cold beverage, its a comforting read.Your Commitment to the ProcessMake a change in how you relate to this process. Instead of merely measuring the outer barometers (ticks, points, dollars, account size), focus on your inner ones. Commit regular time with yourself in evaluating the more subtle contexts of your investing. This does not mean fretting over why you entered a trade that didn’t work out or thinking how impossible it seems to get ahead. Instead, it means looking at how you truly approach your investing as it relates to your goals and giving yourself a regular report card. And, as hard as it is for some of us to do, it means giving yourself a pat on the back when you honor your intention, even if you haven’t yet reached your final goals.Stop muttering to yourself, and stop chastising yourself for lapses. Close your eyes, envision yourself at your goal and take a few deep breaths of success. Put your energy into reinforcing your trust that you truly can do this and that it may take some extra time to come to fruition. A part of you is already where you want to be. It just takes time to open up and take the next step.Keep reminding yourself that each time you affirm your intention and each time you commit to the process, you are actually doing something positive. The process itself clears away your fears. It fills you with a new sense of what investing can be for you and your family, and it tells you why you can do it if you really want to. Don’t just wish you could trade with intention. Take the first step and trust where you will lead yourself.The Correct Path Leads to RELIEFRelief is what you will feel because now you will have the skill-set, strategy, and know-how to execute a consistently profitable strategy.Once you have reached that milestone of KNOWING that you’re ‘Okay,’ you now enjoy a feeling of security.You finally know that you can relax and settle down. You have a certain peace of mind about you that people notice, and they may even comment on it. In fact, I find others mention how relaxed and easygoing I am. I believe that’s because I know where I am, where I’m going, and how to reach my goals. The way I see it, I’m just going to continue improving my investing strategies and help as many other individuals reach financial freedom with me.“My journey to greater success is to help as many others reach financial freedom and make more money every year from their investments than they earned working. Or put another way, I’m helping individuals become wealthier in retirement, which is the opposite of what most retirees experience.”Chris Vermeulen - Founder of Technical Traders Ltd.Your time and energy are now focused on expanding your investing capabilities, increasing your annual income, and creating more free time. You become the type of investor that can, in a calculated and business-like fashion, take ANY investing strategy or method and validate it properly to be sure it fits within your comfort/risk levels. Because you are no longer struggling and stressed to find a quality investment solution for your retirement capital, you can think more clearly, and if any part of a new potential investment puts your long-term goal at risk, you can pass on the idea and keep looking and waiting. But when you do find something you like, you do so with well-founded confidence and the proper long-term mindset required to follow and execute the strategy, and you have a reasonable expectation that it will meet your financial goals.The Process Must Match Your PersonalityYou must enjoy and trust the process of investing. It’s a long winding road, and it takes time. If you are going to do something that lasts years, you better make sure it matches your personality, skills, and available time. I wrote about this and provided a little quiz for you to learn your personality type, and how it will affect your investing results in the post: A Valuable Lesson In Knowing Your Own Personality Type For Investing.As you go through this process, you become one of those investors that has the skills, tools, and know-how to adapt quickly and confidently when the economic climate or market mood changes. You will also be able to broaden your portfolio of systems to maximize your profit potential as an active investor.It’s about the thought process. If you’re committed to becoming a professional golfer, for instance, you’d have to think like a professional golfer. You’d have to eat, breathe, and sleep golf, but you’d also have to know the technical aspects of golf in order to progress and win. Golf is a perfect example because it’s a mental game. When you swing a golf club for the first time, the instructor corrects you and tells you to swing in such a way that feels unnatural, yet it turns out to be the proper form. It’s not like swinging a baseball bat. A golf swing is technical in nature. You have to set aside your natural emotions or desire to swing it hard and hit the ball in favor of the technical aspect of the proper, gentle swing that uses physics and aerodynamics. This swing maximizes the way the club was built to launch the ball in the air and puts it exactly in the direction you need it to go. It’s a technical process and requires the right mindset.I will go into detail about why technical analysis is critical for success as an investor in my next article so stay tuned. But, until then, if you didn’t read my post about how Only Price Action Pays, Not The News, Earnings, Fed, Or Your Gut, it touches on some key points you may find useful.
Keep Following the News, Earnings, Fed, And Your Gut, If You Want Keep Losing Money

Keep Following the News, Earnings, Fed, And Your Gut, If You Want Keep Losing Money

Chris Vermeulen Chris Vermeulen 03.11.2022 13:53
As a trader and investor looking to pull money out of the market regularly, the only thing you are really looking for is the price of the investment you bought or sold-short to move in your favor. So, common sense tells us that "Only Price Pays," not news, not how much we love a stock or commodity. If the price does not move, you do not make any money, period.If you think it's going to help you become a better trader by reading financial articles, watching the business channel, listening to other people's opinions, or the Fed, then you are sadly mistaken. That is the absolute best way to undermine all your hard work, analysis, and hard-earned money. The last thing you want to be doing is second-guessing yourself each time you are placing a trade or adjusting an open position.Eliminate FOMO From Your TradingRemember that most news and surprise news events follow the direction of the trend even if the news is against the trend; more times than not, the price action will be nothing more than an intraday or a couple-day blip on the chart. So, the news, rumors, opinions, and tips that are causing you FOMO can be eliminated if you become a Technical Trader. Imagine if you could start enjoying investing again, owning only assets that are rising in value, and knowing when to exit positions not moving higher. Wouldn't that be nice?I wrote a really fun and unique article about knowing your personality type, and how that will affect your trading and investing results. And guess what, 73.3% of individuals do not have the personality to become a successful trader or investor long term. The article is called A Valuable Lession In Knowing Investors And Your Own Personality Type. 5th Graders Can Manage Your Buy-And-Hold Strategy At No CostI know so many individuals who are not happy with their investment performance. Either because of their trading results or what their advisor has not done to protect their wealth and retirement accounts. I speak to individual investors daily on the phone and hear horror stories, which makes me feel sick.When these investors learn how bear market losses could have been avoided, and profited from with conservative and slow strategy, they have an AHA moment. Once they see how technical analysis and position and risk management can more than double their annual returns and cut their max drawdowns (losses) from 52% down to only 6% they start to get excited again. Imagine cutting your retirement account volatility by over 88%. Would you sleep better at night? Would it save you difficult conversations with your spouse? Would it allow you to retire without the fear of running out of money?Well, now you can rid the stock market rollercoaster ride and the buy-and-hold strategy that any 5th grader could do without charging you a dime. Heck, I was on the phone with a new subscriber last month who told me his advisor lost almost 25% of his retirement account this year alone, and the advisor still charged him over $32,000 in management fees…Im not trying to bash advisors. I know a lot of them, they are great, and many of them use my strategies for their clients, but a guy said this the other day, and it made me laugh.Ok, I got off on a little tangent there, so, let's get back to how only price pays!Technical Trading Indicators That WorkIf price movement is what pays us, then it's only logical that we focus mainly on the price. Most indicators are based off of price, so they lag the last traded price for an investment. Some indicators, like the 50-day moving average, which many traders use, are actually lagging that investment by 50 days.Don't get me wrong; some lagging indicators work great for specific trading strategies. I like to keep an eye on the 5-, 20-, 50-, and 150-day simple moving averages. I only really like them when the investment has been trending for a long period of time, and the price sharply pulls back to one of those moving averages. Generally, you get a strong one to three-day bounce off of those moving averages the first time price touches them. But the point I am trying to make here is that if you want to be more of an active trader with weekly or monthly trades to generate a steady income or account growth, then you must focus on the things which have very little lag time and provide continuous trading opportunities.Surprisingly, if you use a good combination of indicators, you can actually forecast short-term price movement before price moves. I show subscribers some of my intraday trade setups and investors my swing trade setups, and share the exact trades I'm trading in my accounts through my CGS Signals Newsletter.I won't lie. It is very easy to get caught up in using several indicators because there are hundreds, if not thousands, of them. Unfortunately, many are almost duplicates of the same data shown in a different format, and many will completely contradict what other indicators are showing. This leaves you confused and frustrated, and likely trading without a clearly defined strategy, and we all know how that ends.The key to selecting the proper indicators and tools is to find what has been working best for a specific investment and the timeframe you are trading. Using indicators that represent different types of analysis (trends, cycles, volatility, volume, and market sentiment) so you do not have any overlap, you can then create a synergy of confirming indicators. They will increase your accuracy of a pending price movement in the near future to profit from.Markets Are Tradable Only 60% Of The TimeDon't Be Afraid Of CashA couple of interesting points you should know is that the stock market only trends 20-30 percent of the time. And according to J.M Hurst, the market oscillates (cycles) 20-30 percent of the time. What does this mean? It means that, at best, the market provides tradable price action for us to make money only 60 percent of the time. Why is this important? It tells you that even when the market is performing well, we will still be sitting on our hands and potentially in a cash position 40 percent of the time.Investors who survive and thrive during bear markets understand the value and power of a cash position during specific market conditions. Sometimes, it is not about making money as an investor. Instead, it is more about preserving capital so that you can revest it later when there are safer opportunities available.If you want to trade with the best odds possible, then you must have all the major bases covered in terms of analysis. Each indicator/tool that I use analyzes the market in a different way. So when several of my analysis tools are saying it's time to enter or exit a position, then I know there is a high probability of a price movement, and I can take the proper course of action.Using The Correct Hours For Your IndicatorsKnowing what data to follow and analyze is a major step in the right direction, but knowing what times of the day to pull that data for analyzing is equally important. You must follow the big money players, which means you should be analyzing and trading during times when they are active.In a recent article How To Tell If The Stock Market Is Bullish Or Bearish, we covered some interesting points and chart you may want to review. With some instruments, you can trade 24 hours around the clock. Many traders get caught up trading the futures or FOREX market, and that is not for beginners. Because these markets are still open during times when most individuals are home from work, they give individuals a way to place some trades and satisfy their urge to become a trader.But what most individuals do not know is that overnight trading is one of the toughest times to trade. Because of the lighter volume and lack of liquidity, moves can be magnified in either direction. The big-money players who generate the majority of the volume and price stability during the day are out of the market. Overnight and pre-market trading data should not be used in your analysis. For example, the S&P 500 futures contract can trade all night right into the regular trading hours. The opening bell is at 9:30 a.m. ET, and between 9:30 a.m.–9:40 a.m. (10 minutes), more contracts will be traded than what took place in the entire overnight and pre-market trading. I should also note that futures and FOREX are highly leveraged, so when you are wrong, your losses happen fast, and they are big. If you trade outside of regular trading hours, be aware of the added risks involved.With this in mind, it is essential to focus on regular trading hours (9:30 a.m. ET–4:00 p.m. ET) when analyzing market data.Concluding Thoughts:In short, if you are a trader or investor who thinks you need to follow the news and fundamental data, and read random opinions, good luck. While some of those trade ideas may work here and there, you will almost always give back any gains you made; if you don't follow price and manage positions, it is just a matter of time. I have seen some traders learn this quickly within a year, and others I have come to me for mentoring after 30+ years of trying to do it themselves and just can't seem to get the reliable results they want.So, if you are unhappy with your trading or investing results or that of your advisor, maybe its time for you to revest your capital with a Consistent Growth Strategy. A strategy that exclusively holds assets rising in value, so you never again watch your wealth and retirement vanish right when you need it the most.I have been helping individual investors and advisors safely navigate the financial markets since 2001. I live and breathe the markets with my efficient investing strategy using ETFs. For individual investors who struggle to keep up with the markets, my Consistent Growth Strategy can be AutoTraded in your self-directed retirement account, so you can spend time doing what you love. In contrast, your retirement accounts continue to grow and have risk management applied to preserve your capital during market corrections and multi-year bear markets.
Is the Stock Market Bullish or Bearish?

Is the Stock Market Bullish or Bearish?

Chris Vermeulen Chris Vermeulen 01.11.2022 13:57
Astute market observers understand that the economic and stock market cycles are related but not the same.  The stock market has a cycle that tends to lead or lag the economic cycle.  In the diagram below, you can see which sectors and commodities generally perform better or worst during different times within the stock and economic cycles.While the economy’s health is measured with lagging indicators, the stock market is forward-looking.  Stock investors don’t focus on where the economy has been but on where they think it is going in the coming months.  Economists read the latest economic reports of lagging data.  Stock investors attempt to read the economic “tea leaves” for clues about future direction.Strong Economy, Strong MarketA strong economy is easy to identify. Corporate earnings are strong, growing businesses are expanding, and new ones are being created. Unemployment is low, even to the point where many job openings go unfilled for lack of qualified or willing candidates. Incomes are rising, and consumer spending is strong. Housing is robust, with lots of new construction starts and price appreciation. Energy and other commodity prices tend to be increasing due to strong demand.In a strong economy, stocks have a bullish trend with occasional pullbacks within that trend. Every dip can be bought, and penalties for doing so are the exception rather than the rule. More speculative stocks tend to do well as investors try to place capital ahead of future growth industries, which is one of the trading strategies we focus on using the BAN - Best Asset Now newsletter.Mixed Signals, Economy ContractingEconomic conditions eventually weaken for any number of reasons. It could be a speculative bubble that has just gone too far. It could be an overdue financial reckoning from the over-expansion of credit. Or perhaps a once-in-a-century pandemic that leads to a drastic slowdown in economic activity. We’ve seen all these conditions in recent decades.Stocks tend to continue higher in a bull market even as leading indicators start to show weakness. Investors that step in to “buy the dip” are wrong with increasing frequency. Capital tends to rotate to more defensive sectors, and asset classes like the US dollar and commodities as cracks form in investors’ recency bias - thus, volatility increases. Eventually, the bull market inertia in stocks fades as it sinks in with investors that the economic indicators are deteriorating and likely to worsen. This is when stocks can appear both bullish or bearish day to day and sector by sector, confusing and frustrating investors.If you want to learn more about how to see the markets clearer and to control your emotions, we put together a killer article to learn how your brain sees and perceives the markets and news. A follower of our work said something along these lines about this article:“This is the wisest investment advice I have read out of the hundreds or thousands of newsletters I have read.”Read This articleCentral Bank Stimulating ModeIn a “typical” deteriorating economy, central banks like the Fed will step in at some point to stimulate the economy back to health by reducing the cost of capital with lower interest rates, also referred to as Quantitative Easing. An optional part of this monetary policy is for the Fed to purchase distressed assets. In an extreme economic stumble, governments may step in with fiscal policy measures like direct stimulus and institutional bailouts. Eventually, the economy recovers. But there is also the risk of overstimulating the economy. Central Bank Inflation Fighting ModeWhen the economy is running “too hot,” high demand is chasing too little supply. And that, of course, leads to inflation in the prices of goods and services. At some point, the Fed will step in by raising interest rates as part of a Quantitative Tightening program. A strong US dollar and higher Treasury yields go along with higher target rates from the Fed.The strong Dollar makes US exports and commodities priced in USD more expensive for the rest of the world. That affects inflation in other countries and makes for greater challenges for their central banks. A strong US dollar also dampens US exports and the profits of multinational companies.In this phase, there is the risk of central banks overshooting in their fight against inflation, but the good news is that we can take advantage of these shifts using ETFs and the CGS strategy.Mixed Signals, Economy Bottoming OutWhy is it so difficult to tell if a weak economy is bottoming out? Mixed signals. Some metrics are still declining, while others are improving.When stocks have been bearish and are well off their highs, investors look for signs that they can put capital to work again in the stock market. This is another time when stock trends can flip and flop direction daily.Sign up for my free trading newsletter so you don’t miss the next opportunity!Clear SignalsClear signs of an economic recovery include a peak in inflation data and more dovish language coming out of the Fed, suggesting that the pace of interest rate increases will slow or even reverse. Signs that inflation has peaked include:Declining Consumer Price Index (CPI) numbers.Declining wage costs.Declining consumer spending.Falling Treasury yields.Improving bond prices.By the time we see clear signals that an economic trough has bottomed, the stock market is likely already far out in front. Lingering bad news like disappointing earnings reports is more easily dismissed as investors focus on the outlook. Investors are anticipating a recovery that hasn’t fully formed yet, but they are ready to stick their toes back in the water. When the signals are still mixed in a soft economy, investors again ask, “Is the stock market bullish or bearish?”. The surest answer in such a period of uncertainty is “Yes.”What To Learn More About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. Brian, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!Brian BensonChief Options StrategistTheTechnicalTraders.comDisclaimer: This email and any information contained herein should not be considered investment advice. Technical Traders Ltd. and its staff are not registered investment advisors. Under no circumstances should any content from websites, articles, videos, seminars, books or emails from Technical Traders Ltd. or its affiliates be used or interpreted as a recommendation to buy or sell any security or commodity contract. Our advice is not tailored to the needs of any subscriber so talk with your investment advisor before making trading decisions. Invest at your own risk. I may or may not have positions in any security mentioned at any time and maybe buy sell or hold said security at any time.
SUBJECT/TITLE:  - 28.10.2022

SUBJECT/TITLE: - 28.10.2022

Chris Vermeulen Chris Vermeulen 28.10.2022 04:09
A Valuable Lesson In Knowing Investors and Your Own Personality TypeI recently shared my Myers-Briggs personality test publicly, and I did this for a couple of reasons. For one, I enjoy sharing life experiences and who I am with the investors I work with. I believe in being open and honest with people and that I can learn something from everyone. Building a bond and trust with those who have similar passions and desires just feels good all around.My goal is to help as many individuals possible who believe what I believe and want to reach financial independence with new sources of income and grow their wealth with less effort and risk. I grew up going to Zig Ziglar events. I was up on stage with him when I was only 12 years old, and Zig's simple philosophy, which I believe in, is: "You can have everything in life you want if you will just help enough other people get what they want." And two, if you understand how people's brains work and how they think and react, including your own personality, you have a huge edge when it comes to trading and investing, which is what I will show you in this article.  Have you ever taken the Myers-Briggs personality test? Well, you should know your personality type, but before you do the test to figure out "thyself," finish reading what I must share here as it ties directly into your investing success.  There are 16 personality types, and the ones with the highest distribution are:ISFJESFJISTJISFPESTJISTPESTPESFPA common thread among these top personality types is the "S," which stands for Sensing vs. "N," for Intuition.When it comes to trading and investing, Earl Nightingale's quote could not be more accurate: "If you don't have a good model for success, just look at what everybody else is doing and do the opposite." As we know, the majority of traders lose money. A study showed after tracking 10,000 trading accounts for a year, shows that more than half of the accounts LOST money during a one-year bull market rally. I believe emotions are the culprit. What is the difference between Sensing and Intuition?Sensing focuses on what you can detect with your five senses.Intuition focuses on the impressions and patterns gathered from information. (data, technical analysis, chart patterns, statistics, logic, etc.)  Statistics show that 73.3% of individuals are "Sensing," And, if you know anything about the financial markets and how they move, it's all based on people's emotional reactions. News and opinions get into investors' minds and trigger emotional trading and investing actions.  Why do people trade on emotions and get sucked into news and opinions? Because stories sell ideas and, if told well, can trigger the senses in our brain to see, feel, smell, and even taste the things being explained in a detailed story/news clip. The "sensing" personalities tend to follow stories that should be ignored, which I consider news to be useless noise.  Now, let's take things another step further. The second most common personality trait is "Feeling" at 59.8%, which falls under the pair Thinking or Feeling category and also plays a role in our success as investors. What is the difference between Thinking and Feeling?This pair describes how you make decisions.Thinking focuses on objective principles and impersonal facts.Feeling focuses on personal concerns and the people involved. If you have an "F" in your personality type, you must be aware that you will likely be more emotional as an investor, which can also lead to poor timing for your investment decisions.  Warning: If you have an "S" and "F" in your results, I believe it is vital that you embrace knowing who you are and take action to create a plan, steps, and rules to follow when trading and investing. It's much easier for you to get sucked into news, opinions, stories, hype, and have constant FOMO because it is just how your brain works. If you know your results already and have either or both traits, don't panic! Being a Sensing and/or Feeling person are wonderful traits, heck I wish I had more of them because I'm the polar opposite. I'm more like the actor Data on Star Trek. Also, I should be clear that none of this has to do with your IQ or experience. This personality test tells us how our brains are equipped to handle long-term thinking and/or seeing the big picture. Now, I bet you are excited or maybe even nervous to know what your personality type is… But wait, there's more! Let me share a little about how you can benefit from my personality to make more money. I am one of the rarest personality types, the INTJ. Also known as "The Scientist" or "The Logistician." I'm the opposite of a touchy-feely person. With that said, my personality is highly romantic, but we won't go there… What I am trying to say here is that we could be a match made in heaven. Why? Because I ignore all the noise, stories, lies, and BS the market dishes out on a daily basis. I process the data and find logical, high-quality trade and investment opportunities that put the odds in favor of reliably making money trading stocks, bonds, commodities, and currencies. In general, successful people are future-oriented and create goals and visions of where they WILL be someday. They think outside the box and dance to the beat of their drum. These individuals are driven and follow their natural skills and passions, which for me, happen to be stock market analysis and investing. I deal with a lot of emotional people in my line of work. The good, the bad, and the ugly, but I understand what most are going through. Making or losing money and listening to strong news stories spark emotions and they always will, it comes with the territory. Based on helping individual traders and investors since 1997, I have a pretty good feel from talking with them or reading their emails if they are an "S," "F," or possibly both. People who tend to cancel their trade alert subscription with me (rare, but it happens) probably have one of those two characteristics. Why do they cancel? Generally, they struggle to think for themselves to find and manage trades and their emotions. They don't see the boring logic behind my research, they lack the patience to wait for lower-risk opportunities, and they make rash/emotional decisions instead of examining how those decisions will affect them in the long run. Things like trading around news/hype, or always wanting to buy just one stock or sector, or holding on to losing trades because they can’t man-up and take a loss and move on to better and brighter things.  For example, a classic Sensing/Feeling newsletter cancellation email reads something like:“Hi Chris,Thanks for all the education you have provided; it has been really useful. However, I need to cancel my subscription.It's not your trades. It's just I ended up being the bag holder on a number of MY positions. Now my strategy is just to wait for a few years. It is not worth closing the trades at these prices, plus I believe in most of my positions ;)”Another email,  "Chris, I love your newsletter and have learned a lot. However, there are not enough trades, and I feel that we should be making lots of money from these big daily price swings in the market. I'm worried about what the Fed will do, and with the war and other scary news, I don't know what to do, but I don't have time to wait for your slower trade signals. So please cancel my subscription."  Its this sort of thinking and email that triggers my eyes to roll to the back of my head and grumble, because it makes absolutely no sense to me. I'm an "Intuitive Thinker" who logically filters out noise, has strategies in place, and who only wants to bet on the markets when the odds are clearly in favor of making money, and I ignore the rest. But, let me be clear about one thing, some of the best traders in my newsletter who have been with me for years are very Sensing and Feeling people.  What makes them different is that they know they need rules, systems, and guidance to navigate the market safely. They lean on me for that and are very appreciative of it. I won't lie. It feels nice to be praised for my work by these individuals. They have a way of wearing their heart on their sleeve. If you want to turn your trading and investing accounts around and watch your account grow, you need to make a change. I can provide you with everything you need, from ETF trading signals from my consistent growth strategy to owning the hottest sectors during stock market rallies. I even provide autotrading, so if you don't know anything about the markets or don't have the time to learn or follow the trade signals, you can have them traded for you in your brokerage account at no additional cost from me. Learn More… Recently I asked subscribers to tell me what I helped provide them with, overcome, figure out, learn, avoid, and master. These are the top things they said represented in a word cloud because it takes hundreds of comments and testimonials and turns it into bite size data for you none intuitive thinkers.I will now hand the reins over to you. Take this quick test, figure out how your brain works, read your complete personality profile, and let it sink in. Be proud of who you are and what makes you unique.  It does not matter which personality you are; we can all reach financial success together. As Oprah Winfrey said, "no one ever reaches success on their own. They always have help," so I am here to help you. Ok, It's Test Time!Myers–Briggs Type Indicator (MBTI) is an introspective questionnaire that tells individuals their preferences in how they communicate, interact with others, perceive the world, and make decisions.  The test assigns a value to each of four categories: introversion or extraversion, Sensing or Intuition, thinking or feeling, and judging or perceiving. One letter from each category is used to generate a four-letter result which is your personality type, such as "INTJ" or "ESFP".Free Test: https://www.16personalities.com If you enjoyed this article, please share it with others, and be sure to join my free newsletter and have more articles like this delivered to your inbox.
SUBJECT/TITLE:

SUBJECT/TITLE:

Chris Vermeulen Chris Vermeulen 27.10.2022 15:51
A Valuable Lesson In Knowing Investors and Your Own Personality TypeI recently shared my Myers-Briggs personality test publicly, and I did this for a couple of reasons. For one, I enjoy sharing life experiences and who I am with the investors I work with. I believe in being open and honest with people and that I can learn something from everyone. Building a bond and trust with those who have similar passions and desires just feels good all around.My goal is to help as many individuals possible who believe what I believe and want to reach financial independence with new sources of income and grow their wealth with less effort and risk. I grew up going to Zig Ziglar events. I was up on stage with him when I was only 12 years old, and Zig's simple philosophy, which I believe in, is: "You can have everything in life you want if you will just help enough other people get what they want." And two, if you understand how people's brains work and how they think and react, including your own personality, you have a huge edge when it comes to trading and investing, which is what I will show you in this article.  Have you ever taken the Myers-Briggs personality test? Well, you should know your personality type, but before you do the test to figure out "thyself," finish reading what I must share here as it ties directly into your investing success.  There are 16 personality types, and the ones with the highest distribution are:ISFJESFJISTJISFPESTJISTPESTPESFPA common thread among these top personality types is the "S," which stands for Sensing vs. "N," for Intuition.When it comes to trading and investing, Earl Nightingale's quote could not be more accurate: "If you don't have a good model for success, just look at what everybody else is doing and do the opposite." As we know, the majority of traders lose money. A study showed after tracking 10,000 trading accounts for a year, shows that more than half of the accounts LOST money during a one-year bull market rally. I believe emotions are the culprit. What is the difference between Sensing and Intuition?Sensing focuses on what you can detect with your five senses.Intuition focuses on the impressions and patterns gathered from information. (data, technical analysis, chart patterns, statistics, logic, etc.)  Statistics show that 73.3% of individuals are "Sensing," And, if you know anything about the financial markets and how they move, it's all based on people's emotional reactions. News and opinions get into investors' minds and trigger emotional trading and investing actions.  Why do people trade on emotions and get sucked into news and opinions? Because stories sell ideas and, if told well, can trigger the senses in our brain to see, feel, smell, and even taste the things being explained in a detailed story/news clip. The "sensing" personalities tend to follow stories that should be ignored, which I consider news to be useless noise.  Now, let's take things another step further. The second most common personality trait is "Feeling" at 59.8%, which falls under the pair Thinking or Feeling category and also plays a role in our success as investors. What is the difference between Thinking and Feeling?This pair describes how you make decisions.Thinking focuses on objective principles and impersonal facts.Feeling focuses on personal concerns and the people involved. If you have an "F" in your personality type, you must be aware that you will likely be more emotional as an investor, which can also lead to poor timing for your investment decisions.  Warning: If you have an "S" and "F" in your results, I believe it is vital that you embrace knowing who you are and take action to create a plan, steps, and rules to follow when trading and investing. It's much easier for you to get sucked into news, opinions, stories, hype, and have constant FOMO because it is just how your brain works. If you know your results already and have either or both traits, don't panic! Being a Sensing and/or Feeling person are wonderful traits, heck I wish I had more of them because I'm the polar opposite. I'm more like the actor Data on Star Trek. Also, I should be clear that none of this has to do with your IQ or experience. This personality test tells us how our brains are equipped to handle long-term thinking and/or seeing the big picture. Now, I bet you are excited or maybe even nervous to know what your personality type is… But wait, there's more! Let me share a little about how you can benefit from my personality to make more money. I am one of the rarest personality types, the INTJ. Also known as "The Scientist" or "The Logistician." I'm the opposite of a touchy-feely person. With that said, my personality is highly romantic, but we won't go there… What I am trying to say here is that we could be a match made in heaven. Why? Because I ignore all the noise, stories, lies, and BS the market dishes out on a daily basis. I process the data and find logical, high-quality trade and investment opportunities that put the odds in favor of reliably making money trading stocks, bonds, commodities, and currencies. In general, successful people are future-oriented and create goals and visions of where they WILL be someday. They think outside the box and dance to the beat of their drum. These individuals are driven and follow their natural skills and passions, which for me, happen to be stock market analysis and investing. I deal with a lot of emotional people in my line of work. The good, the bad, and the ugly, but I understand what most are going through. Making or losing money and listening to strong news stories spark emotions and they always will, it comes with the territory. Based on helping individual traders and investors since 1997, I have a pretty good feel from talking with them or reading their emails if they are an "S," "F," or possibly both. People who tend to cancel their trade alert subscription with me (rare, but it happens) probably have one of those two characteristics. Why do they cancel? Generally, they struggle to think for themselves to find and manage trades and their emotions. They don't see the boring logic behind my research, they lack the patience to wait for lower-risk opportunities, and they make rash/emotional decisions instead of examining how those decisions will affect them in the long run. Things like trading around news/hype, or always wanting to buy just one stock or sector, or holding on to losing trades because they can’t man-up and take a loss and move on to better and brighter things.  For example, a classic Sensing/Feeling newsletter cancellation email reads something like:“Hi Chris,Thanks for all the education you have provided; it has been really useful. However, I need to cancel my subscription.It's not your trades. It's just I ended up being the bag holder on a number of MY positions. Now my strategy is just to wait for a few years. It is not worth closing the trades at these prices, plus I believe in most of my positions ;)”Another email,  "Chris, I love your newsletter and have learned a lot. However, there are not enough trades, and I feel that we should be making lots of money from these big daily price swings in the market. I'm worried about what the Fed will do, and with the war and other scary news, I don't know what to do, but I don't have time to wait for your slower trade signals. So please cancel my subscription."  Its this sort of thinking and email that triggers my eyes to roll to the back of my head and grumble, because it makes absolutely no sense to me. I'm an "Intuitive Thinker" who logically filters out noise, has strategies in place, and who only wants to bet on the markets when the odds are clearly in favor of making money, and I ignore the rest. But, let me be clear about one thing, some of the best traders in my newsletter who have been with me for years are very Sensing and Feeling people.  What makes them different is that they know they need rules, systems, and guidance to navigate the market safely. They lean on me for that and are very appreciative of it. I won't lie. It feels nice to be praised for my work by these individuals. They have a way of wearing their heart on their sleeve. If you want to turn your trading and investing accounts around and watch your account grow, you need to make a change. I can provide you with everything you need, from ETF trading signals from my consistent growth strategy to owning the hottest sectors during stock market rallies. I even provide autotrading, so if you don't know anything about the markets or don't have the time to learn or follow the trade signals, you can have them traded for you in your brokerage account at no additional cost from me. Learn More… Recently I asked subscribers to tell me what I helped provide them with, overcome, figure out, learn, avoid, and master. These are the top things they said represented in a word cloud because it takes hundreds of comments and testimonials and turns it into bite size data for you none intuitive thinkers.I will now hand the reins over to you. Take this quick test, figure out how your brain works, read your complete personality profile, and let it sink in. Be proud of who you are and what makes you unique.  It does not matter which personality you are; we can all reach financial success together. As Oprah Winfrey said, "no one ever reaches success on their own. They always have help," so I am here to help you. Ok, It's Test Time!Myers–Briggs Type Indicator (MBTI) is an introspective questionnaire that tells individuals their preferences in how they communicate, interact with others, perceive the world, and make decisions.  The test assigns a value to each of four categories: introversion or extraversion, Sensing or Intuition, thinking or feeling, and judging or perceiving. One letter from each category is used to generate a four-letter result which is your personality type, such as "INTJ" or "ESFP".Free Test: https://www.16personalities.com If you enjoyed this article, please share it with others, and be sure to join my free newsletter and have more articles like this delivered to your inbox.
Real Estate: Prepare For Massive Wealth Creation In 2023

Real Estate: Prepare For Massive Wealth Creation In 2023

Chris Vermeulen Chris Vermeulen 24.10.2022 14:53
Entrepreneurs and investors should prepare for one of the most significant wealth-creation opportunities of their lifetime in 2023. It will be similar to the COVID housing bubble in terms of watching your home value rise quarter after quarter, but this time it will be sustainable and carry you into retirement with more than enough cash flow to live your retirement like a billionaire.Real estate is one of the most significant investments we make as individuals. A home is one of the best assets anyone can have, but there will be times when real estate will lose value, which we’ve recently started to see happen. Conversely, there will also be tough times when real estate can increase in value by leaps and bounds, which we experienced in 2021 through to February 2022 when housing prices topped out. I recently had a basement apartment built in one of my rental properties. And boy, was that a mistake. I was quoted $35K, and it ended up costing $100+K, and it is still not completed. The labor rates and quality of labor these days are piss poor. Everyone is gouging and overcharging, and no one completes their jobs. They all seem to leave the last 10% of the job, the final finishing portions (the most important part and where quality skills come into play), and vanish to move on to the next easy job for quick money.I’m bitter about my build, I got taken to the cleaners, and it is going to take years to recoup that extra expense. If you are an investor or entrepreneur, then you understand the pain of a $65+K hit because money does not grow on trees, and we know the hours, stress, creativity, and grit required to make that money.Silver Lining of Low-Quality Tradesman and Reno Companies Gouging Home BuildersKarma has a way of coming back to those who do wrong. The pending housing and building collapse, I expect in the near future, will be a breath of fresh air for savvy investors and entrepreneurs who can preserve their capital during the stock, bond, and real estate correction over the next 12-36 months.You see, in my small town, there is only a small group of truly skilled home builders and reno/repair people. Everyone I know has had terrible building experiences since COVID. It seems everyone stopped working for free money, or they picked up a hammer, called themselves a builder, and started charging $45-75 per hour without knowing what they were doing and inflating material costs.You can’t have good times without tough times, and with mortgage rates more than doubling in a year and leading expert Christopher Whalen saying we should brace for 10% mortgage rates, the housing market and builders are going to be in for a rude awakening. When mortgage rates rise, home prices fall, similar to the bond market. As the Fed raises rates, bond prices come tumbling down. Since the Fed started to raise rates, the price of bonds has fallen over 47%, wiping out over a decade of investor growth. I feel the same is about to happen to the housing market, but the only difference is that the real estate cycle moves much slower and lags behind the stock market and recession by 1-3 years.While most homeowners in the USA are lucky as they locked in a 30-year rate to keep costs low, the real issue and driver of falling home prices is the fact that most Americans live paycheck to paycheck and are overleveraged. With layoffs already starting to show up by large companies every week, and labor rates topping out, it is just a matter of time before tens of millions get pay cuts and laid off, and then they cannot afford their homes and be forced to sell and rent. This will drive house prices lower, but it's going to make time to mature.In addition, new homeowners trying to pick up these houses will be forced to pay 10+% mortgage rates and thus demand a lower home price to make it feasible to own or rent as an investment property.Home building will come to a screeching halt, and the faux tradesmen who have burned every bridge with all their one-time customers will be left scrambling and jobless.Real Estate Investors Stopped Buying in September 2021Savvy real estate investors stopped buying a long time ago, which we can see from this chart I posted in my last real estate article.Real Estate Investors Dumping Ownership October 2022This updated chart shows how the price broke down from our 2021 support level and continues to fall. This ETF allows us to see what the most active real estate investors are doing with their money.It seems they are raising cash, just as we have been doing at TheTechnicalTraders, to avoid the “bear market blues” of falling stocks, bonds, and real estate.Technical Analysis Tells Us When To Buy And Sell Real EstateIf you have followed me, then you know technical analysis is my thing. I don’t care about economic data, politics, news, or fundamentals. All that matters for us as investors is that we own assets rising in value, which is exactly what I specialize in doing with my CGS ETF Portfolio.Imagine if you see the trends of assets and know immediately if you should own it or ditch it. Do you think you could avoid market corrections and bear markets? Do you think you could profit from rising and falling prices? See my Nasdaq 100 (QQQ) daily chart below for a visual.Concluding Thoughts:In short, I don’t want us to go through this pending recession and financial reset. It is not going to be fun, but it will create an opportunity to buy assets at or below their fair value, which is a massive opportunity for anyone cash-rich waiting like a lion to pounce when the timing is right.For example, I bought and built my dream home on the water during tough times, and I remember our builder and architect telling us how lucky we were to be building then and how cheap everything was.I also bought other properties and built high-end rental homes. I now have over 75 tenants for great monthly cash flow. I plan to double my real estate investments in due time because it’s cash for life if you do it correctly and don't overpay or get over-leveraged.I could start buying in the next 12 months or in three years. Not sure. We just need to wait and let the market dictate when to take action. I use technical analysis and follow price trends which makes it simple to know when something is rising or falling in value, and if you know me at all, then you know I only buy investments rising and ditch stocks and bonds falling in value.Another story, in 2009, I bought a Canadian utility ETF that paid me a 16% dividend, and the price of the fund rallied over 100% within a couple of years. I no longer own it, but these types of opportunities are everywhere when the masses are suffering and forced to sell everything they own. The good news is you can also own the best stocks during the next market rally. Follow me to success and ride my coattails over the next few years as we embark on this wild, thrilling, and lucrative investment adventure!If you enjoyed this article, please share it with others, and be sure to join my free newsletter and have more articles like this delivered to your inbox.
Gold and Silver Forecast Followers Are Destined For Disaster

Gold and Silver Forecast Followers Are Destined For Disaster

Chris Vermeulen Chris Vermeulen 13.10.2022 14:58
I'm often asked if everyone could be a profitable trader or investor. My answer is no, and the message I received from what I call a forecast follower paints the perfect picture, and I'll share that with you here.Some people just do not have the knowledge, emotional strength, and self-discipline to succeed, and many are unwilling to put in the hard work. It's unfortunate that if you lack any of these three critical things, you fall victim to trading other people's forecasts and predictions which is a losing strategy, and I'll explain why that is.I recently presented to a group of 900+ Traders and investors about challenging the status quo buy-and-hold method and how to create a bear-proof investment strategy. Before I started, I made it very clear to everyone that trading and investing, in general, is only suitable for a very select group of individuals. And if you don't fall into the first category, you are more likely to fail. But on the other hand, if you happen to check both boxes, the higher your chance of building a sizable trading and retirement account you can live off of.Those who can be exceptionally good traders and investors are:Successful professionals (doctors, lawyers, pilots, engineers, dentists, etc.), entrepreneurs, and retirees. Why? Because these individuals have the drive to learn, the grit to do what is needed, and the focus to execute detailed plans. Each of these traits is critical for success in business, and trading and investing is a serious business.  People with large account sizes. As we know, it takes money to make money, and those who already have a substantial amount understand the value of protecting your capital and the power of compound growth.Not a successful professional, entrepreneur, or retiree? Here's how I did it.I was fortunate to grow up in an entrepreneurial family. My parents were professionals and owned their own hearing, and dental businesses, lots of real estate, and other very unique and lucrative ventures. I grew up watching my dad listen to audio cassette courses of all types, and my sister and I were dragged out to several weekend events around motivation and success. I saw Zig Ziglar a couple of times in Toronto and got pulled up on stage with him. I think I was only like 12 years old then. Even now, I still enjoy listening to Zig and Jim Rohn and have my kids (10 and 12) listen to it. Even though they don't really know what it's fully about, I see them picking up on the core points with this Jedi mind trick type of education.Please keep reading, as this story is leading us to the main point on gold and silver forecasts and how I made my fortune in the financial industry by creating a mindset for success. If you don't have the correct mindset and understanding of the markets, you'll end up following forecasts and predictions until you are broke.Going back to all those success talks I was exposed to as a kid sparked a fire within me. I have read all the great books and many more. Think And Grow Rich is a must-read if you want to figure out who you are, what you truly desire, and what your calling is. My calling was to become a highly successful trader and to create the best strategies to help others manage their own money so they can be financially free and live off their investments without having to work. I feel I've almost achieved it with my strategies to do this, but I know there is room for more improvement. It's never too late to start fresh and turn a new leaf, whether that's to start a new profession you are passionate about or dump your portfolio positions that are causing stress and wiping out your retirement plans. "You can do anything; you just need to want it bad enough," as Jim Rohn always says.Thankfully I learned what my calling was at 16 and have been trading and investing for over 25 years.But with that said, I know a gentleman who retired in his 40's, then went bankrupt in his 50's, then a few years later, he was 10X wealthier than when he retired the first time because he was able to start fresh and follow his passion and use his skills and energy to the fullest extent. Other great books to become a well-rounded, successful individual:-         Richest Man in Babylon (My favorite book about money/wealth – I save)-         The Millionaire Next Door (I see what this book talks about happening all the time – I'm not flashy)-         Investing in Duplexes, Triplexes, and Quads: The Fastest and Safest Way to Real Estate Wealth (I built a full retirement income in 5 years – cash for life, with massive nest eggs)Have you ever done a personality test? You should, it will help your trading. Well, depending on the website that tests you, I am called a Scientist or a Logistician (INTJ or ISTJ). I'm not a follower. I can't stand rules, regulations, or being told what to do. I prefer to do my own thing. I build, test, and break things, and I do it well as the introvert that I am. I'm not so much of a leader but will stand up for what I believe in if something does not make sense and seems incorrect because my personality type states that I also believe that I am generally right when it comes to things I put my focus towards. In a way, I almost see myself as the character Data from Star-Trek, as I run on logic and try to make the best decisions for success. Unlike Data, I do have feelings and emotions, which play a critical role in my trading and investing models, and are part of what makes what I do successful, so don't be fooled; emotions are useful when it comes to trading strategies.Anyways, while I may not be focused on being a leader when people follow me, I'm more than happy to help, and I love sharing what I do with like-minded individuals, and I do this at TTT.The bottom line, once you understand what it takes to be successful, you have that skill for life, and the more things you do, the more times you try, the more successful you will be. This leads us to what happens to those who lack stock market, trading, and position/risk management knowledge. If you don't live and breathe the financial markets, you are almost destined to fail unless you have systems and rules or professional help. With all the data, news, and opinions littered across the web, it's easy to get sucked into the hype, forecasts, and predictions that are aligned with an asset you like. There is no room for love in the financial markets. You can't buy and hold an asset just because you love their product and hope that it rises because some article or blog post paints a pretty picture of it rocketing higher to a price that will allow you to retire. Instead, we need to look at our investment positions as rental properties. We buy an asset (rent it) until we make the return we expected or it is no longer trending in our direction, at which point we sell it back to the market. There should be zero relationships or love for your investments. Rent it, make your money, get out – wham-bam, thank you, market!I have been sharing articles and forecasts online since 2001, and I have seen my fair share of bitter traders who blindly follow free content, dump all their money into a trade with no regard for risk, and do nothing to manage their position. You know what happens when the asset fails to move as expected. The trader sends a raging email about how wrong the forecast was, a lot of blaming, and usually some colorful name-calling from the individual, I think you get my point here.Don't get me wrong, I get they are upset, they may or may not have lost money, and they need to vent, so why not send an email to someone nice, trying to help and share ideas/possibilities, which are NOT specific trades. In short, if you don't fully understand how the markets move and how to find your own trades and manage them, then you need to follow a professional who does. If not, you end up cutting corners and making trades based on some really interesting articles you stumbled across because you like its forecast of where the price may move to in the near future. But that is no reason to enter a position, and I don't recommend following this method of trading.If you know anything about how I trade and invest, then you know I follow price trends. I will never buy something in a downtrend, and I don't short something in an uptrend. Sounds simple right? You would be surprised how many people lose money in a raging bull market. A study I recently read said that out of 10,000 brokerage accounts in the USA, only 26% of the accounts outperformed the stock market. Over 50% lost money, and the remaining 24% didn't really make anything during a multi-year bull market rally. In a perfect environment to make money, most people lose money. Trust me, people love to bet against the market, there is a gambler in all of us, and I know I'm a gambling man, but I can control those urges most of the time because the "Data" in me reminded me of the odds of losing my money.A recent email from a gold forecast follower who is bitter To paraphrase what it said:"Two years ago, you and your team forecasted gold to be $3500 within a few months, I'm still waiting, and there has been no remorse, or apology for the spectacular miss. I'm still waiting for the research team to recant that forecast. I should have bet against your forecast, that's on me…"Yes, I posted about $3500 gold, in fact I know I posted about $5500, and $7400 as well in some of my articles a few years ago. They are just opinions and interesting angles if the stars were to align, and that could possibly happen, but as we know, the stars don't typically align for anyone. Examples of some interesting gold analysis, but none of these are a strategy or trade, just visualized data.Also, while this person is convinced this was an official trade I made. If you know me at all, then you know I manage every trade very closely and close trades that are not working out. There is no two-year-old gold trade open waiting for a $3500 target that I can assure you. But, I do think that there will be a great trade in gold in the coming months once the price confirms and gives us a new signal, which will hopefully be at a much lower price from where it is now.Remember, free content online needs to be different, interesting, or extreme to get people to look at it. News and articles are nothing more than noise (garbage) for the educated and successful investor who already has proven strategies like BAN or CGS  to make money and build their wealth. We trade with the trend, not our hearts and emotions.Concluding Thoughts:The reason why I focus on helping already successful individuals is that they get it. Attitude is everything. The raging forecast followers with minimal understanding of how the markets move and risk management are generally very frustrated, angry, and bitter people. I no longer work with anyone who is negative or rude to my team or I. It is that simple. I learned many years ago that you can't make people successful. You can't lift or pull people into becoming successful, well maybe temporarily, you can get them pumped up and moving, but if they cannot keep themselves motivated, driven, and excited to get to where they want to be, they are destined to fail. I have helped many people like this, hoping I could help them. But the bottom line is, if someone can't carry their own weight while you are helping them, then they are simply slowing you down, and I do not like to be slowed down! This article, I feel, turned into more of a rant than about trading gold forecasts. I apologize if it's way out there in left field. Still, I wanted to share what was going through my head after receiving the forecast follower email and how knowledge, drive, and attitude are critical for all your successes in life.If you enjoyed this article, please share it with others, and be sure to join my free newsletter and have more articles like this delivered to your inbox.
The Losses You Are Experiencing from Your Investments in Layman’s Terms - 06.10.2022

The Losses You Are Experiencing from Your Investments in Layman’s Terms - 06.10.2022

Chris Vermeulen Chris Vermeulen 06.10.2022 11:07
The past two years have been nothing short of extreme in terms of price swings for all types of investments and our resulting emotions. Traders and investors have been tangled up in the perfect storm to lose a record amount of money in 2023.While I follow and greatly appreciate Ray Dalio and his principles, it has always blown my mind that his All-Weather portfolio does what every other portfolio does - holding stocks and bonds and riding out any market gyrations. His stance was “Cash Is Trash,” but I have never thought that. Cash, in fact, is one of the most powerful positions to have in certain market conditions and one I have embraced more so than others in the past year.Here’s a simple question for you. If the stock market and bonds were both falling in value would you:1. Hold both and ride them lower and be down roughly 22% this year.2. Sell all positions, move to cash, and buy assets rising and have a gain of 2.89% this year?Well, there is some good news. Ray Dalio finally came around to my “Cash Is King” belief after his All-Weather portfolio continued to lose value for its investors. I’ll touch more on this position later, which, if you don’t embrace at some point, you will likely regret that decision.I recently wrote about the big losses coming in the article Worst Case Financial Scenario for Retired or Nearly Retired Investors where I stated:“The bottom line here is that the worst thing that could happen to most investors and capital in the markets now would be a multi-year bear market and drawdown, which would cripple anyone nearing retirement and those retired. Having your nest egg cut in half will send shockwaves worldwide to the largest group of investors, the baby boomers, and anyone retired. In addition, it will likely create a flood of people looking for jobs to subsidize their retirement and crush many dreams, and that’s just the beginning of potentially a big unraveling of the economy.”The Silent Killer – Your Emotions Just this year alone, there have been enough wild price swings with stocks and bonds to spark emotions and catch most investors off guard - like a deer in the headlights, just before its lights out and game over. This year, we all see fear among market participants because almost every asset is falling in value.First, the start of 2022 was the worst six-month start in 50 years for US equities. Right after that, we have the best start to a quarter since 1983. If the worst start to a year and the best start to a quarter don’t spark emotions, then I don’t know what will. Talk about mixed signals for everyone to try and figure out what to do. If you don’t have a game plan and proven strategy going forward, I wish you the best of luck.The cost of emotional trading and investing decisions goes much deeper than sleepless nights. Thinking about delaying or downgrading your retirement plans adds an enormous amount of stress and can actually become dangerous to your health. The emotional rollercoaster ride from falling stock and bond prices has been proven to cause health issues. For example, during the 2008 bear market, more than 10,000 suicides were tied to the economic crisis between 2008 - 2010. Watching your life savings vanish and your financial situation worsen month after month is no joke. Significant contributors are job loss, home foreclosures, and debt during recessions. While bear markets are very rare, they are a serious event that must be prepared for avoided with your investment capital.The good news is that there are ways to avoid bear markets altogether and even profit from falling prices and eroding economic conditions. An individual investor who follows my research and trade signals said this:“Chris,Thank you.  You have summed up the whole mental game of this crazy market.  Been a TTT member coming up on 2 years now.I am so glad that you have shared your thoughts, expertise, and advice, and I appreciate your ability to see the big picture, and share how by not jumping into the fray we can consistently grow our profits and escape the brutal bear market movements.I still have a long way to go - I do get frustrated when things go up and I am not in there sometimes, but I see the returns of BAN, and CGS over the years and it is just amazing how by stepping aside when the crazy volatility and trend exit comes, how one can be at peace knowing their nest egg is safe.Additionally during these times we can do those things we really want to do, instead of staring at screens all day. :)” A.LIs Your Money Disappearing? Status Quo Investing Has Always Been BrokenHow much money are you losing doing nothing but sitting on your hands and hoping stocks and bonds start to rise again? Well, if you are like 99% of investors, you know long-term treasury bonds are down over 40% from their 2020 high, and the S&P 500 index has fallen over 25%. No matter what stock/bond portfolio allocation you are sitting with, you are taking a beating.Its been my mission/goal for over 25 years to trade and invest my hard-earned money in a better way than doing what everyone else does, buy-and-hold. Sure, it works well during bull markets and for young investors, but once you pass the age of 40, shifting to tactical investing is hands down the way to build and preserve your wealth. The primary goal of every investor should be to preserve capital. You cannot prioritize a short-term battle over a long-term war. Without your capital, you have no means to access the upside potential that is offered by tactical investing. To preserve your capital, investors must: • Cut losses and not hold on to positions falling in value. • Own fewer positions to reduce costs and generate market-beating returns. • Wait for quality trends and positions to present themselves. • Use cash as one of the most powerful positions during specific market conditions (extreme volatility, mixed bull/bear markets). The New Status Quo Investing MethodMy 25+ years of research on this, supported by my strategy results, have proven we can reduce losses and drawdowns and generate above-average returns in a way you likely never thought possible. You see, I believe following the price charts is the key to reliable investment returns. Price does not lie; the only way we, as traders, make money is if the price of an asset moves in our favor. During the 2001 bear market, I thought that by owning stocks, because of positive fundamentals and news, my investments would rise in value. Boy, was I wrong! Even stocks that had been growing quarter after quarter got decimated, and I blew up my investing account. I am now 100% certain that following price using technical analysis and position/risk management is how you can best grow your trading account. Sure, fundamental economic data and news will move asset prices, but any move they cause is typically a short-lived price blip on the chart and favors the underlying technical trends. Put simply, I learned the hard way to ignore random noise and other market opinions and follow price.Taking things one step further, I have created a hierarchy of assets to know when and what to invest in at any given time - no matter if the markets are trading up, down, or chopping sideways. The USA stock indexes are #1; if they are not in favor, I look to long-term treasury bonds. If they are not in favor, I look to the US dollar index UUP and UDN. If nothing there is favorable, I earn interest with the short-term T-Bill ETF or cash in my brokerage account and sidestep the chaos completely. There is a white paper that covers this in more detail on how to build a bear proof portfolio here.The key here is that we only hold assets that are rising in value and exit things moving sideways or falling. Also, as volatility increases each of these assets have reduced volatility to help decrease risk from that standpoint.New Status Quo Investing – Only Owning Assets Rising In ValueYou may be saying, well, this is all great, but how am I supposed to do this with my portfolio? The straight up answer is you can follow my exact portfolio trades and allocations. And to take things one step further, you can have these ETF trades autotraded in your self-directed brokerage account so you can spend your time enjoying life or building your business as an entrepreneur.The results below show what technical investing and knowing what to own, and when to sit in cash can do for you. Concluding Thoughts:In short, I have packed a lot of information here with some great links for more education on what to do and why you must ensure you avoid further losses. Based on technical analysis, it looks like this is just the beginning of much lower stock and bond prices.I recently talked to an investor who said, "I'm stuck, because I'm down so much already." I get that point of view and feeling because I have been there. In fact, I blew up three trading/investment accounts in my lifetime to learn what needs to be done and, more importantly, what not to do. As we age, we cannot afford multi-year drawdowns, and we definitely do not want to lose more of our hard-earned money. While it's a tough pill to swallow and taking a loss on a portfolio is not easy, I know from experience that it's much better to exit a losing trade when it's clearly not working (and is down 15-25%) than is it is to hold on for dear life. Doing this can land you in a scenario where you will watch your portfolio fall another 20-40%, and then you'll have to wait 3-10 years to get back to breakeven. Moving money to cash and then into a new asset rising in value is better than doing nothing and having to live with the emotional and financial consequences that will come with it. I hope this article has helped you in some way. My team and I are here to help!
The Losses You Are Experiencing from Your Investments in Layman’s Terms

The Losses You Are Experiencing from Your Investments in Layman’s Terms

Chris Vermeulen Chris Vermeulen 05.10.2022 22:03
The past two years have been nothing short of extreme in terms of price swings for all types of investments and our resulting emotions. Traders and investors have been tangled up in the perfect storm to lose a record amount of money in 2023.While I follow and greatly appreciate Ray Dalio and his principles, it has always blown my mind that his All-Weather portfolio does what every other portfolio does - holding stocks and bonds and riding out any market gyrations. His stance was “Cash Is Trash,” but I have never thought that. Cash, in fact, is one of the most powerful positions to have in certain market conditions and one I have embraced more so than others in the past year.Here’s a simple question for you. If the stock market and bonds were both falling in value would you:1. Hold both and ride them lower and be down roughly 22% this year.2. Sell all positions, move to cash, and buy assets rising and have a gain of 2.89% this year?Well, there is some good news. Ray Dalio finally came around to my “Cash Is King” belief after his All-Weather portfolio continued to lose value for its investors. I’ll touch more on this position later, which, if you don’t embrace at some point, you will likely regret that decision.I recently wrote about the big losses coming in the article Worst Case Financial Scenario for Retired or Nearly Retired Investors where I stated:“The bottom line here is that the worst thing that could happen to most investors and capital in the markets now would be a multi-year bear market and drawdown, which would cripple anyone nearing retirement and those retired. Having your nest egg cut in half will send shockwaves worldwide to the largest group of investors, the baby boomers, and anyone retired. In addition, it will likely create a flood of people looking for jobs to subsidize their retirement and crush many dreams, and that’s just the beginning of potentially a big unraveling of the economy.”The Silent Killer – Your Emotions Just this year alone, there have been enough wild price swings with stocks and bonds to spark emotions and catch most investors off guard - like a deer in the headlights, just before its lights out and game over. This year, we all see fear among market participants because almost every asset is falling in value.First, the start of 2022 was the worst six-month start in 50 years for US equities. Right after that, we have the best start to a quarter since 1983. If the worst start to a year and the best start to a quarter don’t spark emotions, then I don’t know what will. Talk about mixed signals for everyone to try and figure out what to do. If you don’t have a game plan and proven strategy going forward, I wish you the best of luck.The cost of emotional trading and investing decisions goes much deeper than sleepless nights. Thinking about delaying or downgrading your retirement plans adds an enormous amount of stress and can actually become dangerous to your health. The emotional rollercoaster ride from falling stock and bond prices has been proven to cause health issues. For example, during the 2008 bear market, more than 10,000 suicides were tied to the economic crisis between 2008 - 2010. Watching your life savings vanish and your financial situation worsen month after month is no joke. Significant contributors are job loss, home foreclosures, and debt during recessions. While bear markets are very rare, they are a serious event that must be prepared for avoided with your investment capital.The good news is that there are ways to avoid bear markets altogether and even profit from falling prices and eroding economic conditions. An individual investor who follows my research and trade signals said this:“Chris,Thank you.  You have summed up the whole mental game of this crazy market.  Been a TTT member coming up on 2 years now.I am so glad that you have shared your thoughts, expertise, and advice, and I appreciate your ability to see the big picture, and share how by not jumping into the fray we can consistently grow our profits and escape the brutal bear market movements.I still have a long way to go - I do get frustrated when things go up and I am not in there sometimes, but I see the returns of BAN, and CGS over the years and it is just amazing how by stepping aside when the crazy volatility and trend exit comes, how one can be at peace knowing their nest egg is safe.Additionally during these times we can do those things we really want to do, instead of staring at screens all day. :)” A.LIs Your Money Disappearing? Status Quo Investing Has Always Been BrokenHow much money are you losing doing nothing but sitting on your hands and hoping stocks and bonds start to rise again? Well, if you are like 99% of investors, you know long-term treasury bonds are down over 40% from their 2020 high, and the S&P 500 index has fallen over 25%. No matter what stock/bond portfolio allocation you are sitting with, you are taking a beating.Its been my mission/goal for over 25 years to trade and invest my hard-earned money in a better way than doing what everyone else does, buy-and-hold. Sure, it works well during bull markets and for young investors, but once you pass the age of 40, shifting to tactical investing is hands down the way to build and preserve your wealth. The primary goal of every investor should be to preserve capital. You cannot prioritize a short-term battle over a long-term war. Without your capital, you have no means to access the upside potential that is offered by tactical investing. To preserve your capital, investors must: • Cut losses and not hold on to positions falling in value. • Own fewer positions to reduce costs and generate market-beating returns. • Wait for quality trends and positions to present themselves. • Use cash as one of the most powerful positions during specific market conditions (extreme volatility, mixed bull/bear markets). The New Status Quo Investing MethodMy 25+ years of research on this, supported by my strategy results, have proven we can reduce losses and drawdowns and generate above-average returns in a way you likely never thought possible. You see, I believe following the price charts is the key to reliable investment returns. Price does not lie; the only way we, as traders, make money is if the price of an asset moves in our favor. During the 2001 bear market, I thought that by owning stocks, because of positive fundamentals and news, my investments would rise in value. Boy, was I wrong! Even stocks that had been growing quarter after quarter got decimated, and I blew up my investing account. I am now 100% certain that following price using technical analysis and position/risk management is how you can best grow your trading account. Sure, fundamental economic data and news will move asset prices, but any move they cause is typically a short-lived price blip on the chart and favors the underlying technical trends. Put simply, I learned the hard way to ignore random noise and other market opinions and follow price.Taking things one step further, I have created a hierarchy of assets to know when and what to invest in at any given time - no matter if the markets are trading up, down, or chopping sideways. The USA stock indexes are #1; if they are not in favor, I look to long-term treasury bonds. If they are not in favor, I look to the US dollar index UUP and UDN. If nothing there is favorable, I earn interest with the short-term T-Bill ETF or cash in my brokerage account and sidestep the chaos completely. There is a white paper that covers this in more detail on how to build a bear proof portfolio here.The key here is that we only hold assets that are rising in value and exit things moving sideways or falling. Also, as volatility increases each of these assets have reduced volatility to help decrease risk from that standpoint.New Status Quo Investing – Only Owning Assets Rising In ValueYou may be saying, well, this is all great, but how am I supposed to do this with my portfolio? The straight up answer is you can follow my exact portfolio trades and allocations. And to take things one step further, you can have these ETF trades autotraded in your self-directed brokerage account so you can spend your time enjoying life or building your business as an entrepreneur.The results below show what technical investing and knowing what to own, and when to sit in cash can do for you. Concluding Thoughts:In short, I have packed a lot of information here with some great links for more education on what to do and why you must ensure you avoid further losses. Based on technical analysis, it looks like this is just the beginning of much lower stock and bond prices.I recently talked to an investor who said, "I'm stuck, because I'm down so much already." I get that point of view and feeling because I have been there. In fact, I blew up three trading/investment accounts in my lifetime to learn what needs to be done and, more importantly, what not to do. As we age, we cannot afford multi-year drawdowns, and we definitely do not want to lose more of our hard-earned money. While it's a tough pill to swallow and taking a loss on a portfolio is not easy, I know from experience that it's much better to exit a losing trade when it's clearly not working (and is down 15-25%) than is it is to hold on for dear life. Doing this can land you in a scenario where you will watch your portfolio fall another 20-40%, and then you'll have to wait 3-10 years to get back to breakeven. Moving money to cash and then into a new asset rising in value is better than doing nothing and having to live with the emotional and financial consequences that will come with it. I hope this article has helped you in some way. My team and I are here to help!
Don't Fight The Fed

Don't Fight The Fed

Chris Vermeulen Chris Vermeulen 04.10.2022 09:09
In 1977, the US Congress officially gave the Federal Reserve a multi-part mandate to maximize employment, maintain prices near an acceptable inflation target of around 2%, and moderate long-term interest rates. In general terms, Fed policies are supposed to stimulate the economy when it's weak and cool it when it's too hot. And ideally, economic metrics, on average, are "just right" most of the time.When faced with the significant economic contraction – some might say "collapse" – which became known as the Great Financial Crisis of 2007-2008, the Fed jumped in with every tool it had to save and stimulate the economy back to sustainable growth. The Fed added to its balance sheet by buying financial assets as a buyer of last resort. And they quickly reduced interest rates from above 5% to near zero to encourage investment and spending. The "near zero" interest rates continued until 2016, when rates increased progressively.We had the unexpected "Covid Crash" in the spring of 2020, and the Fed quickly shifted monetary policy back to stimulating the economy. Additionally, we had record stimulus with business supports and direct grants as part of Congressionally mandated fiscal policies. Those policies worked, and we saw a stunning economic recovery from the March 2020 economic "lockdown.""Don't Fight the Fed" is an old market cliché that was very applicable during the longest bull market in US history, which lasted almost 11 years following the Great Financial Crisis. The phrase embodied the sentiment that if the Fed was stimulating the economy with accommodative policies, commonly known as Quantitative Easing, it made little sense to bet against the market's bullish trend. Monetary and fiscal policies powered a "tailwind" for the economy. Businesses were growing, and consumers were spending as long as the accommodative fiscal and monetary policies were in place. "Long the markets" proved to be a winning position for businesses, consumers, investors, and the economy in general.The flip side of “Don’t Fight the Fed.”With inflation currently running over 8%, we’re clearly in an economy that has been running too strong. The Fed is in Quantitative Tightening mode and has embarked on a historically swift campaign of raising interest rates and selling assets from the Fed balance sheet. The Fed arguably may have been too slow to shift policy. But they are focused on taming inflation and getting price growth close to 2% annually.The phrase “Don’t fight the Fed” has now taken on its alternate meaning. When Fed policies are implemented to slow the economy, we are clearly in a different phase of the economy than what we’ve enjoyed for the last decade or so. With the inflation fight the top priority for the Fed, we should expect declining earnings, slowed spending, higher unemployment, a bearish stock market, and many other indicators of a contracting economy.While we’ve seen some signs of a slowing economy, we still have high inflation driven by strong employment. Current indications suggest the Fed may still have far to go in reaching its objective in this cycle.Preservation for Better PerformanceIt’s no secret that investing tends to be much easier, less stressful, and more profitable when markets are bullish and in a sustained uptrend. Volatile markets in a corrective phase can be difficult, costly, and frustrating. Gains that took years to accumulate but are yielded back to the market can take years, if not decades, to be recovered.We know approximately what part of the Fed cycle we’re in. We don’t know precisely when there will be a policy shift to accommodative policies again. But the signs will show themselves in good time. We don’t have to time this perfectly. It is much more critical that we protect our capital in this part of the cycle.As the economy works through this cycle, should investors be all in cash? For some, that may be the best answer. For others, it can be an excellent time to selectively put a small amount of risk capital in play. But we shouldn’t be putting the bulk of our capital at risk. There may be some bargains if we pick and choose carefully. Some short-term gains may be had if we’re nimble enough. The comfortable level of risk for all of us is very individualized. But again, it is not worth jeopardizing our financial futures by risking more than we are willing to lose right now.There will be one sector that we think will post large returns in the hundreds of percent when the time is right, and that will be in the precious metals sector, which Chris, the founder of Technical Traders Ltd., talks about here.ConclusionIn summary, we are well served if we only size up when conditions are favorable and size down when they’re not. And don’t fight the Fed.What To Learn More About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   Sign up for my free trading newsletter, so you don’t miss the next opportunity!If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. Brian, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!Brian BensonChief Options StrategistTheTechnicalTraders.com
Gold Starting Stage 4 Decline and What It Means for Investors

Gold Starting Stage 4 Decline and What It Means for Investors

Chris Vermeulen Chris Vermeulen 30.09.2022 23:06
Passive buy and hold Investors in general are starting to panic: XLU, dividends, bondsIt has been an interesting year with stocks down nearly 25% and the bond ETF TLT down over 40% since the 2020 highs. The passive buy and hold investor is becoming panicked and we can see this in the stock market through the mass selling of utility stocks dividend stocks and bonds.When the masses become fearful they liquidate nearly all assets in their portfolios which is why we see the Big Blue chip stocks selling off along with precious metals. As investors liquidate around the world they focus on where their money can be preserved. With most currency falling in value there is a flood towards the U.S. dollar index as the safety play.Gold Video AnalysisHere you can watch my detailed analysis along with both my short-term expectations and long-term supercycle outlook.Global Currency Trends – Monthly ChartsAs the US dollar index rises we tend to see precious metals fall. As you can see from the charts below almost all currencies are falling in value helping to send the US dollar index sharply higher this is a headwind for precious metals until it finds resistance in tops.Gold Monthly Chart Comparing 2008 Bear Market and 2022Let's take a look at the monthly chart of gold. I believe gold entered a new bullish supercycle in 2019, which is very similar to the Super cycle that started in 2001.I believe the bear market in equities we have started can be compared to the 2008 bear market. Technical analysis shows that gold could correct another 16% lower and match the same 34% correction we saw in 2008.the price of gold is threatening the 1674 support level. If price is broken on the monthly chart it will signal a large sell off to roughly the $1300 to $1400 level for gold.While the circumstances and economy are very different from 2008 the price charts are painting a very similar picture. I believe there's still a long way to go for gold to find support and it may take another 8 to 12 months to unfold. I also believe that the precious metal sector will be one of the first assets to bottom and then start a multiyear rally very similar to what happened during the 2009 to 2011 rally.while the 34% correction starting to take place may look very large it is in line with what we've seen in the past. While price charts don't repeat they do tend to rhyme so I'm expecting a similar type of scenario though I'm sure it will unfold a little differently and take a different length of time to mature.Price Stage Analysis – Gold Starting Stage 4 DeclineThe price of gold is on the verge of breaking down from a stage three topping phase. Once the breakdown is confirmed it will then be in a stage 4 decline which is known as a bear market. It's important to note that we can have bear markets within supercycles.Just like when gold started at new super cycle in 2001 which lasted to 2013 there can be large corrections and smaller bear markets within the bullish Super cycle.Dollar Index Rockets Higher and Has More Room to RunThe US dollar Index has been one of the hottest assets to own this year. I believe the rising value of the dollar index has been putting downward pressure on the metals sector all year. As you can see from the quarterly chart below, The US dollar index still has more room to run to match the high set in 2001.Keep in mind I still think there's another three to five more bars before the dollar forms a top and reverses direction. Each bar on the chart is 3 months because this is the quarterly chart so we still have potentially a year of sideways or lower gold pricing ahead of us.Gold Miners Will Be Under Pressure If Gold FallsIf gold breaks down and the bear market in equities continues, we will see gold mining stocks continue to sell off. The large cap gold stocks ETF GDX shows a potential of 44% decline in price over the next year. While this may sound bad it will become an extraordinary opportunity in do time.I believe silver and silver mining stocks will follow that of gold stocks as well.Concluding Thoughts:In short, I'm very excited for what is unfolding in the precious metals sector. And while it may still be early I'm keeping my eye on the sector for the start of a new super cycle rally in 2023 which could be life changing for investors.TheTechnicalTraders created the Consistent Growth Strategy that can be manually followed or autotraded in a self-directed retirement account for people who do not want to spend their valuable time in front of a computer. Save time to do what you love and lower stress to enjoy every moment of today. Take a look at what tactical investing can do when you only own assets rising in value. I challenge the status quo and do things differently. It may be slower and not as exciting and the precious metals sector but it preserves capital, and makes money when assets are trending higher, and side steps corrections and bear markets.
The Worst Case Scenario for Retired or Nearly Retired Investors Who Are 55+

The Worst Case Scenario for Retired or Nearly Retired Investors Who Are 55+

Chris Vermeulen Chris Vermeulen 22.09.2022 13:54
I just did some research and wrote about it. I should be clear that you may find this article a little unsettling if you are nearing retirement or have already retired. On the other hand, it's an eye-opener because the financial markets and different asset prices paint an interesting picture.But, I believe being armed with the proper information and knowledge leads to better outcomes, so I'm sharing this possible scenario that could unfold in the next 3-10 months and last for many years and directly affect our lifestyle.If you don't take proper action, you could be exposed to and experience something called the sequence of returns risk, which I will explain in great detail in my soon-to-publish white paper, so be sure to join the free newsletter. So, let's jump into things!There is a concept that the US Fed may be pushed into raising rates above nominal inflation rates to stall inflationary trends. Historically, the US Federal Reserve had raised rates aggressively to near or above annual inflation rates before the US economy moved away from inflation trends.The Potential Scenario As Told By The Charts and HistorySuppose US Inflation trends continue to stay elevated throughout the end of 2022 and into early 2023. In that case, the US Fed may continue to raise Fed Funds Rates (FFR) to unimaginable levels more quickly than many traders/investors consider possible. Could you imagine an FFR rate above 6.5%? How about 8.5%?What would that do to the Mortgage/Housing market? How would consumers react to credit card interest rates above 24% and mortgages above 10%? Do you think this could happen before inflation trends break downward?The reality is that the markets and future have a way of surprising us and doing what we once thought was not possible. So being open to some of these extreme measures and situations is something we should consider and consider what they could do to our businesses, lifestyles, and retirement.Historically, this must happen for the US Fed to break the persistent inflationary trends in the US – take a look at this chart.The best-case scenario given the historical example is that Annual Inflation trends move aggressively to the downside by Q1:2023 or earlier. That will allow the US Fed to move away from more aggressive rate increases, which could significantly disrupt US & Global asset markets (pretty much everything).Suppose Annual Inflation stays above 6~7% throughout the end of 2022 and into early 2023. In that case, I believe it is very likely the US Federal Reserve will be pushed to continue raising rates until a definite downward trend is established in inflation.Algos, Illiquidity, Derivatives Are Active CulpritsThere are two examples showing the US Fed acted ahead of a major downturn in inflation: one in the late 1980s and another in late 2007. Both instances were unique in the sense that the late 1980s presented similar sets of circumstances. Computerized trading, illiquidity, and excessive Derivatives exposure prompted the 1987 Black Monday crash and the 2007-08 Global Financial Crisis. (Source: https://historynewsnetwork.org/article/895)Current Stage 3 Topping Pattern May Turn Into Stage 4 DeclineMy research suggests the US markets are fragile given the current Inflationary trends and pending Federal Reserve rate increases. As I told above, the best-case example is to see Inflation levels dramatically decline before the end of Q1:2023. It is almost essential that current inflation levels drop back to 2~3% very quickly if we are going to see any measurable slowdown in Fed rate increases.Secondly, the continued speculation by traders/investors remains very high, in my opinion. Given the historical example, traders should be pulling capital away from risks very quickly and attempting to wait out any potential Fed rate decisions. Below, I’ve highlighted where I believe we are on the Stock Market Stages chart. This is not the time to become overly aggressive with your retirement account/nest egg.Many traders and investors are now buying this pullback in stocks, thinking it’s a buy-the-dip type of play. I think things are about to get ugly, and what we have seen thus far in 2022 is just the 12-year bull market ending, but the downtrend has not even started yet.The time to buy the hottest sectors, like in 2020, will eventually come, and when it does, the Best Asset Now strategy (BAN) can generate explosive growth for traders, but now is not the time.Proprietary Investor Strategy Confirms Cycle TrendsMy proprietary Technical Investor strategy (TTI) has moved into GREEN trending bars – aligning very closely with the MAGENTA ARROW on the Stock Market Stages chart above. I’ve drawn both a GREEN & RED arrow on this chart to highlight the potential trending outcomes that likely depend on how quickly Inflation levels drop.If Annual Inflation levels drop below 3% before we start Q2:2023, then I believe we may see a softer US Fed and more significant potential for a recovery in the US/Global markets over the next 18+ months. On the other hand, suppose Annual Inflation levels stay above 6~7% over the next 6+ months. In that case, I believe the US Federal Reserve will attempt to continue to raise rates aggressively – eventually resulting in a “bear market” breakdown event in the US/Global asset markets.Comparing 2008 Bear Market Breakdown With 2022 Price ActionThe last time we experienced a major Inflationary event where the US Federal Reserve was not actively supporting the US economy with QE policies was in 2007-08. This event prompted a -57% decline in the SPY before bottoming out and a -55% decline in the QQQ. Many of you lived through that market collapse and have strong feelings about how destructive that move was for everyone.2022 Bear Market BreakdownThis time, after 12+ years of QE, prompting the "Everything Bubble," – just imagine what could happen if my research is correct. But let me be very here. I am not forecasting, predicting, or saying this will happen. I do things differently when it comes to trading and investing. I only own assets and hold positions that are rising in value. I do this by following price charts and managing risk and positions.You won't ever catch me trying to pick a bottom, averaging down into losing positions, and you won't find me trying to pick a top, either. What you will experience if you follow my work is that I always research and know all the possibilities an asset could move, and I plan to navigate each one safely. Once the price charts confirm a direction, I position my portfolio to profit from the new trend, which can be up or down.A Tough Year Even for Experienced InvestorsThis year alone, the S&P 500 is down over 18%, and treasury bond ETF TLT is down 28%. As a result, anyone investor using the buy-and-hold strategy with any mix of stocks/bonds in their portfolio is under tremendous pressure and likely starting to worry about outliving their retirement funds. Here is a little background on the market markets for you. First, there have been 26 bear markets since 1929, with an average loss of 35.62 percent and an average duration of 289 days. Mind you, some of those bear markets were only a few months long, while others were multi-year declines, with some taking 5, 12, and even 17 years to return to breakeven. But the reality is breaking even with your assets is still a significant loss. After many years of being in a drawdown like that, don't forget you are paying 0.50% - 2% annual fees from ETFs, mutual funds, and possibly advisor fees. Simple math shows that with a 17-year drawdown spending 1+% year to hold these losing positions, you still have a 17+% loss when assets return to breakeven because of these costs.I know all this sounds bleak, and rightly so, it is. But there is good news. Market corrections and bear markets can be identified early and safely navigated if you know what to look for and follow the market VS. buy and hope, or try to pick market bottoms and tops.2022 has been a very tough year to make money from the markets, not because of the market decline but because of the stage 3 phase in which the stock market is currently. It does not know if it wants to find a bottom and rally or roll over and start a steep bear market swan dive.You can see how my Consistent Growth Strategy (CGS) has preserved our capital during these difficult times.Concluding Thoughts:In short, the world and even more so, the financial markets and assets have a habit of applying the maximum pain to investors before reversing direction. In fact, there is a "Max Pain" calculation in the options market to know where the maximum pain/losses will be for the stock market, and it's crazy scary how the market will reach this price level during options expiry days on many cases.The bottom line here is that the worst thing that could happen to most investors and capital in the markets now would be a multi-year bear market and drawdown in the markets, which would cripple anyone nearing retirement and everyone already retired. Having your nest egg cut in half will send shockwaves worldwide to the largest group of investors, the baby boomers, and anyone retired. In addition, it will likely create a flood of people looking for jobs to subsidize their retirement and crush many dreams, and that's just the beginning of potentially a big unraveling of the economy, I think.Labor rates will fall as millions of individuals look for work, we will be in a recession, and businesses will be laying off millions of employees, making it even harder to get a job. We are already seeing layoffs taking place. Then we could see the real estate market (residential and commercial) starting to fall apart. Things start to get a little depressing beyond that, so I'll stop here, but you get my gist, I hope.The average investor is positioned for higher prices with the buy-and-hold strategy. The critical thing I am trying to share with you is what could happen on the downside if things continue to erode and that you should think about how your lifestyle could change in the next 3-10 months if/when this happens and if you think you will be comfortable with your situation. Every week I remind investors I work with that now is not the time to expect to make money. Instead, it is about capital preservation. Focus on not losing; growth will naturally come in due time.If you have any questions, my team and I are here to help you safely navigate both bull markets and bear markets with our CGS Investing Strategy.
Will Inflation Data Result In More Aggressive Action By The FED?

Will Inflation Data Result In More Aggressive Action By The FED?

Chris Vermeulen Chris Vermeulen 15.09.2022 21:57
Recent CPI/Inflation data suggests the current wave of global inflation is far from “transitory” and may persist for many months – possibly years. Some believe it is primarily a supply-side issue related to the COVID shutdowns. I think it is a combination of factors driving higher inflation right now (capital creation, stimulus, a broad speculative phase that existed after COVID, and supply side issues).The result is the US Fed may now find itself pushed even further to raise rates aggressively to combat inflation trends. This may push the US/Global markets into a new downward price phase as we near a broad Pennant/Flag formation that apexes near December 15, 2022.Fed Decision Could Push Global Economies In Dangerous Downward Price PhaseThe CPI/PPI numbers inherently lag economic trends by 4 to 6+ months. I’m sure the US Fed is aware of the risks related to any further aggressive rate hikes. Yet, I’m also sure the Fed will do whatever is necessary to move ahead of perceived inflation trends.The two charts below, the CPI & PPI Year-over-Year data, clearly show the increasing cost factors for producers and consumers, which started nearly 9+ months after the COVID lockdowns in March 2020. The reality of the world at that time was that supplies were diminishing because almost everything throughout the world was shut down or operating at significantly reduced capacity.Now, as we move back into a mode where capacity and supply are rebuilding, we’ll see how quickly these inflationary trends weaken – if at all. The world is still dealing with supply-side issues, and the US economy continues to run stronger than many other foreign economies. Thus, the demand side may stay elevated for a while – unless the Fed turns aggressive with rate hikes and destroys consumer demand to some degree.(Source: https://www.investing.com/economic-calendar/cpi-733)(Source: https://www.investing.com/economic-calendar/ppi-734)SPY Moving Towards Apex Breakout/Breakdown Before December 15, 2022All eyes will be on the US Fed next week as traders/investors prepare for what may become a very big price cycle/phase. I believe traders/investors have continued to anticipate a different Fed with Powell at the helm. The strength of the markets over the past 30+ days suggests traders believe the Fed will be more cautious of bursting economic prosperity than it may have been in the past.After living through the DOT COM bubble, the 2008-09 Financial Crisis, and COVID, any new broad destructive economic phase brought about by the US Fed pushing rates too high could have catastrophic results.SPY Flag/Pennant Apexing Near December 15, 2022This Monthly SPY chart highlights the current strength of the US S&P 500 SPDR ETF – still +82.5% above the COVID lows and +16.70% above the pre-COVID highs.This Weekly SPY chart shows the same Flag/Pennant formation, yet I want to highlight the potential for a breakdown price trend targeting $359~361 (near the pre-COVID highs) and a deeper level near $312~318 (YELLOW LINE). Both levels represent 100% Measured Price Moves correlating to existing price trends from the peak near the start of 2022.If we do see a breakdown in price trend because of an aggressive Fed rate decision, traders and investors need to understand where the next support levels may be found. It is doubtful that inflation will persist past Q1 or Q2 2023 as supply capacity is restored and the post-COVID constraints return to normal. Yet, we still have many months of unknowns related to how the US Fed will act and if any new event will disrupt global supply channels (think energy, credit markets, debt).Right now, traders and investors need to stick with the first rule of trading: Protect Capital from excessive risks and only trade when the strongest opportunities exist.LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow the price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside, protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Natural Gas Price Drives Crude-SPY Trends When USD Is Appreciating

Natural Gas Price Drives Crude-SPY Trends When USD Is Appreciating

Chris Vermeulen Chris Vermeulen 08.09.2022 21:45
When the US Dollar is appreciating in value and trending upward, Natural Gas price trends upward as well to put moderately extreme pressures on the SPY & Crude Oil. As most energy transactions are conducted in US Dollars, this makes sense. Yet, with the recent agreement signed by Russia & China to conduct future energy transactions in Rubles & Yuan (Source: Nikkei Asia), will it result in more muted price trends in the future?When the US Dollar rises, Natural Gas bullish price spikes seem to inflict greater disruption events in Crude Oil and the SPY. It appears that when Natural Gas spikes excessively, global nations are trapped in a US Dollar based economic crisis to supply electricity, heat, and other economic essentials to their communities.US Dollar Strength May Disrupt Energy & Currency Valuations As Recession LoomsThis disruption in economic stability translates into greater risks for consumers, manufacturers, governments, and others. The shock of rising Natural Gas prices while the US Dollar is strengthening presents a real problem for many foreign nations dependent on importing energy.This is likely why the recent Natural Gas price spikes have helped drive the SPY lower over the past 6+ months. The concern that rising energy costs could work to break economic function in certain nations becomes very real when Natural Gas moves to $3.50. It becomes even more critical when Natural Gas rises above $6~7.My research suggests energy will continue to play a significant role in driving future trends in the global markets that conduct business transactions in various currency forms. It will simply push buyers & sellers to hedge foreign currency risks related to US Dollar strength or weakness. In short, the energy transactions will still be executed in a US Dollar base valuation – although they will be executed in foreign currency denominations.Read our recent Crude Oil research article: Crude Oil Prices - Will They Hold Above Key Support Level Or Begin To Unwind? (thetechnicaltraders.com)There is one aspect of the deal between Russia & China that we’ll have to watch over the next 10+ years. Will this deal strengthen the Ruble & Yuan, or will it isolate these currencies and work to peg the Ruble/Yuan toward similar valuation levels? In a way, this is a bold move by Russia & China attempting to move their currencies into position to battle the US Dollar. But at the same time, if it fails to support the Ruble & Yuan, then it may work to devalue them in tandem.The currency alliance between Russia & China may act as an anchor between the two currencies where any future broad global trends may drive both the Ruble & Yuan in a similar direction. The result could be an Oil/Energy based Ruble/Yuan correlation to the US Dollar or British Pound.If Natural Gas begins to slide downward over the next 6+ months and breaks below $5.50, then I believe we may see a resurgent upswing in US stocks and other assets. Until then, I think the continued economic and global energy crisis will hang over the US markets headed into Winter 2022.There is a chance that US markets may start a Christmas Rally over the next 30+ days and attempt to move into some type of end-of-year rally phase. But the global risks related to energy prices, inflation, and the US Fed may continue to disrupt rally attempts closing out Q4:2022. In short, we may not see any real relief from energy/inflation pressures until Q1 or Q2 2023.Don’t try to be a hero with these market trends. Learn to protect your assets and target your trading style toward the best opportunities for profits. On another note, if you are holding stocks and bonds in your portfolio, I highly advise you to watch this video I did with Craig. Bonds could fall another 20-30% from here and will send most baby boomers back to work, killing their retirement plans if you are not proactive. LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow the price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside, protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Breaking Down ETFs - What They Are And How They Help Build Wealth

Breaking Down ETFs - What They Are And How They Help Build Wealth

Chris Vermeulen Chris Vermeulen 03.09.2022 00:06
The idea of pooling investment assets has been around for centuries.  Mutual Funds first appeared in the 1920s.  But it wasn’t until the 1980s that mutual funds became widely popular with mainstream investors. In recent years, ETFs have taken off as an alternative to mutual funds.An exchange-traded fund (ETF) is a “basket” of stocks, bonds, or other financial instruments that gives convenient exposure to a diverse range of assets.  ETFs are an incredibly versatile tool that can track anything from a particular index, sector, or region to an individual commodity, a specific investment strategy, currencies, interest rates, volatility, or even another fund.  You can do about anything with them -- hold a diversified portfolio, hedge, focus on a particular sector, or even profit in a bear market.The most significant practical difference between mutual funds and ETFs is that ETFs can be bought and sold like individual stocks —and mutual funds cannot.  Mutual funds can only be exchanged after the market closes and their Net Asset Value (NAV) is calculated.  Shares of ETFs can be traded throughout regular market hours, like shares of stock.Both mutual funds and ETFs have expense fees that can range from low to high.  Mutual funds can have front or backend loads or redemption fees in addition to management fees.  ETFs that trade like shares have commissions to buy and sell.  But some ETFs are so popular that brokers offer commission-free trading in them.So Many ChoicesThe sheer number and variety of ETFs can be a bit mind-boggling.  Over the last 20 years, we’ve seen just a couple hundred ETF offerings grow to more than 8,000 worldwide, encompassing more than 10 trillion in assets.A surprising number of ETFs have failed.  They started with an interesting focus (well, “interesting” to somebody) but failed to attract enough interest to remain viable.  For this very reason, I avoid narrow niche ETFs that trade with low volume.I eliminate many ETFs on poor liquidity alone.  I’m not interested if there’s not much volume in a product.  I don’t want to suffer high slippage from wide bid/ask spreads.  I want to get in and out quickly and at fair prices.To leverage or not to leverage?Inverse and leveraged ETFs often use derivatives like options, futures, and short-term contracts to achieve 2x or 3x the daily change in the assets they’re intended to track. These types of instruments have inherent time decay, and they tend to lose value over time, regardless of what happens in the index or benchmark that the ETF tracks. As a result, these products are best for very short holding periods or day trading.Options on ETFsMany ETFs have options (puts and calls) available.  But even if the ETF itself trades with decent volume, that does not mean that the options meet my criteria for liquidity. Sometimes I will use long options – puts or calls -- if a clear directional move is in play.  I also use many of my option premium selling strategies on popular ETFs.   Just like with stocks, options can be used with ETFs for additional leverage, collecting premiums for income, and risk management.An ETF PlaylistHere are some of my favorite ETFs and how I use them.SPY, QQQ, IWM – Major index ETFs with huge participation. I use options strategies with these to collect premiums or profit from longer-term directional moves.XLE, XLF, XHB, IYT, XLU, SMH – Sector Exposure. These can work well for directional trades in specific sectors. I like these sector plays as they can give a lot of protection against individual stock risk.DBC, USO, UNG, WEAT, GLD, SLV, COPX, GDX, URA – Commodity Exposure. All of these can work well when the underlying commodities are appreciating. I tend to use these with option premium selling strategies such as covered calls and diagonal spreads.TQQQ – Triple leveraged to the QQQ. This very popular ETF can work well to capture very short-term bullish moves in the Nasdaq 100 stocks.SQQQ – This is the companion inverse ETF to TQQQ. It is triple-leveraged and inverse to QQQ. Long calls on SQQQ can work well to capture gains from a very short-term down move. Timing is everything in short-term trading, so I get in and out quickly, with trades lasting no more than a few days.UUP – US Dollar Index. This can be a real winner when stocks are weak and the dollar is strong. Implied volatility on options is relatively low, so buying call options can work well if you catch a directional move. Using calls can give about 10x leverage; for example, a 3% increase in UUP might yield around a 33% gain for an in-the-money call option.Technical AnalysisWhether an individual stock or an ETF, my answer for when to buy or sell is always based on price action. We only want to hold assets that are increasing or at least keeping their value while avoiding assets that are in decline. And the toolset to evaluate price action is technical analysis. The same technical analysis we use for stocks works just as well for the more popular ETFs.Sign up for my free trading newsletter, so you don’t miss the next opportunity!WANT TO LEARN MORE ABOUT OPTIONS TRADING?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   Our Options Trading Specialist, Brian Benson, continues to knock his trades out of the park. His current win rate is 90%, meaning of the last 20 trades, 18 have finished in the money!If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. Brian, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
New Gold Apex Pattern - How Will The US Fed Rate Decision Affect This?

New Gold Apex Pattern - How Will The US Fed Rate Decision Affect This?

Chris Vermeulen Chris Vermeulen 30.08.2022 17:00
My research shows a new Gold Apex pattern is set up for September 11~15. Around September 11 or after, Gold will attempt to reach this new Apex level near $1766. This price pattern is important because the US Fed rate decision date is September 20~21, and a host of economic data reporting comes out the week before the Fed decision.My educated guess is Gold & Silver will begin a volatile breakout move, possibly rolling lower to retest support near $1672, before attempting to move higher as global fear starts to elevate. I believe the current lower support level is critical to understanding the opportunities in Gold. If the $1672 level is breached to the downside, it means that Gold has lost a critical support level and will likely trend lower.Given the statement by Powell last Friday, it seems the US Fed will not pivot and will do what is necessary to tame inflationary trends. Recently I posted two articles about Gold and the Fed that you should review as we move toward the September 11~15 dates.August 9, 2022: GOLD-TO-SILVER RATIO HEADING LOWER – SETUP LIKE 1989-03August 3, 2022: SHOULD WE BE PREPARED FOR AN AGGRESSIVE U.S. FED IN THE FUTURE?Weekly Gold ChartI suspect the $1766, the current Apex level, will play a critical role as new support/resistance going forward. The strength of the US Dollar should have weakened Gold more aggressively, but Gold is holding up quite well in the face of an ever-stronger US Dollar.Some major event may occur near September 11~15 – just before the Fed rate decision on September 20~21.Daily Gold ChartPrice Apex patterns, like this one in Gold, usually resolve with an aggressive volatility event before establishing any new trends. I often term these events a “washout rotation.”For example, look at the Apex of the previous (YELLOW) Flag/Pennant formation. A price neared the Apex, but it stayed low compared to the lower yellow boundary. Then, a price reached the true Apex, and a broad 6.5% price rotation took place, eventually settling near $1780.What happened next was price settled into a rally phase originating near $1780 and continuing up to $2077 – a +17.75% rally.Concluding ThoughtsI can’t predict the future any better than you can. But I do understand Flag/Pennant formations. I believe the current Pennant formation in Gold will resolve to the upside – possibly launching Gold into another significant rally phase.I continue to warn my followers that Gold and Silver must initiate a new upward price trend to break free of the current downward price trend. Yes, we saw a strong rally attempt in early 2022, but that topped out and slid down over the past 4+ months. Now, as we resolve the current Price Apex, we’ll need to see a substantial price rally above $1828 to confirm any potential for a new bullish rally phase in Gold.HOW CAN WE HELP YOU LEARN TO INVEST CONSERVATIVELY?At TheTechnicalTraders.com, my team and I can do these things:Safely navigate the commodity and crude oil trend.Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save your time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and more educational.Sign up for my free trading newsletter, so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Are The US Markets in Stage #4 Of The Excess Phase Peak Pattern?

Are The US Markets in Stage #4 Of The Excess Phase Peak Pattern?

Chris Vermeulen Chris Vermeulen 25.08.2022 21:31
In 2020 & 2021, we published a very well-received series of articles related to a longer-term pattern we called the Excess Phase Peak pattern. At that time, we highlighted the five (5) components of the Excess Phase Peak pattern and provided a number of examples showing how it usually played out for traders.You can review our first article: How To Spot The End Of An Excess Phase.One more article to review is Revisiting The Excess Phase Peak Pattern, which contains links to many of our previous Excess Phase articles. We received so many comments and emails from this article that we thought now would be a great time to bring it forward once more. It highlights how the SPY appears to be moving into a Stage #4 Excess Phase Peak pattern again. Recently we’ve seen the SPY move through Phases 1, 2, & 3. Now, we need to see if the next breakdown in price will start or confirm the Phase #4 price breach.Why Is The Excess Phase Peak Important?The Excess Phase Peak pattern is a very common transitional phase for the markets where psychology and economic trends shift over time. Global markets typically require periods of pause, reversion, or a reset/revaluation event to wash away excesses. We’ve seen these types of setups happen near the DOT COM and 2007-08 market peaks. What happens is traders are slow to catch onto the shifting phases of the Excess Phase Peak and sometimes get trapped thinking, “this is the bottom – time to buy.”The reality is that as long as the individual phases of the Excess Phase Peak continue to validate (or confirm), then we should continue to expect the next phase to execute as well. In other words, unless the Excess Phase Peak pattern is invalidated somehow, it is very likely to continue to execute, resulting in an ultimate bottom in price many months from now.The 5-Phases Of The Excess Phase Peak PatternThe Excess Phase Peak Pattern starts off in a very strong rally phase. This rally phase normally lasts well over 12 to 24 months and is usually driven by an extreme speculative phase in the markets.Once a price peak is reached and the markets roll downward by more than 7~10%, that’s when we should start to apply the five unique phases of the Excess Phase Peak Pattern. If each subsequent phase validates after the peak, then the Excess Phase Peak Pattern is continuing. If any phase is invalidated, then the pattern has likely ended. For example, if we start by completing Phase #1 & #2, then the market rallies to a new all-time high – that would invalidate the Excess Phase Peak Pattern.Here are the Phases of the Excess Phase Peak Pattern:The Excess Phase Rally PeakA breakdown from the Excess Phase Peak sets up a FLAG/Pennant recovery phase.Sets up the Intermediate support level - the last line of defense for price.Price retests #3 support & breaches the support level - starting a new downtrend.The final breakdown of the price is below the Phase 4 support level. This usually starts a broad market selling phase to an ultimate bottom.Now, let’s take a look at the 2007-09 SPY market peak to see how these phases played out.2007-2009 Excess Phase Peak PatternHighlighted on the chart below, Phase #1 & #2 played out perfectly, with a lower high for Phase #2 and a Phase #3 breakdown. By the time Phase #2 broke downward, we should have been keenly aware of the potential for a Phase #3 support level to set up and extend.Phase #3 can sometimes result in an upward-sloping support channel (like a Bear Flag), but in this case, it is validated as a horizontal support level. We could have used the May 2008 peak as a reversal/breakdown trigger showing us an early Phase #3 change in trend. Having said that, until the Phase #3 support level is breached – these could turn into false breakdowns.Once Phase #3 support is breached, and we clearly start a deeper downward price trend (moving into the Phase #4 search for the ultimate bottom), traders need to stay very cautious of risks. Phase #3 is one of the most troubling and difficult phases to navigate. It always seems like a “perfect new bottom in price” – until Phase #4 hits.Ultimately, a Phase #5 bottom sets up (the ultimate bottom), and this usually coincides with extreme selling pressures. Often, the US or foreign governments are involved in trying to contain global risks or address global corporate/financial concerns. We must wait for confirmation of a bottom before we can really take advantage of the lower price levels – but this can be accomplished using technical indicators and price theory.The Current 2022 Excess Phase Peak Pattern SetupOn the chart below, I estimate we are in the midst of an early Phase #3 potential reversal setup. We’ve already seen a very clear Phase #1 peak, a -13.80% downtrend setting up the Phase #2 bullish Flag/Pennant trend. Then we watch as the Phase #2 breakdown took place, resulting in another -21.60% price decline. Those lows set up the current Phase #3 base/support level near $363.I’m cautiously watching the blue-dashed trend line as a potential early warning trigger for the Phase #3 bullish recovery cycle. Usually, within a Phase #3 recovery, after establishing critical support, the rally phase becomes very important to validate/confirm the potential Phase #4 & #5 processes.If the Excess Phase Peak Pattern is going to invalidate at this point, the critical support level will stay unbroken, and a new upward price trend will be established from the Phase #3 support/bottom. So, this is when we need to watch very cautiously for any significant shift in central bank policies, foreign capital risks, shifting sentiment, or anything else that may provide the needed support for the markets to keep rallying higher. Otherwise, we should expect the Excess Phase Peak to continue unfolding.In ConclusionTraders and Investors should stay very cautious in this phase of the markets. Going “all-in” with a bullish or bearish expectation right now can be very dangerous to your bottom line.Learn why I rely on my proprietary CGS, BAN, and TTI strategies to assist in identifying opportunities in various market trends and how I use these to find opportunities to trade within the Excess Phase Peak Pattern. Volatility is still quite high, and there are opportunities for great trades if you understand risk factors.LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow the price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside, protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.Sign up for my free trading newsletter, so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Selling “Expensive” Option Premium

Selling “Expensive” Option Premium

Chris Vermeulen Chris Vermeulen 19.08.2022 21:27
Long before weekly options were a thing when ticks were still in 16ths, and we downloaded batches of chart data over a dial-up modem…  I “discovered” the world of options. Like most options newcomers, I first learned about buying options – either Calls or Puts – to hopefully profit in a directional move of the underlying stock.   I’d buy Calls to profit from an increase in the underlying’s price and Puts to profit from a decrease in the underlying’s price.  Simple, yes?  (Okay, maybe there’s a bit more to it than that.) And soon after, I learned about selling options – about how I could “outsmart” the market by being a seller of options rather than a buyer.   Ah, those were the days -- of option-selling thrills and sudden “learning experiences”. If your objective is steady, repeatable income, option selling strategies can work well.  Selling options rather than buying does have advantages.  As theta time decay works in favor of the option seller, premium sellers tend to have a higher probability of a profit.  The tradeoff is that the profit is limited to the amount of net option premium collected. Selling options – Puts or Calls – also comes with a potential obligation to either provide or buy the stock at the option strike price.  Those obligations could present substantial risk depending on the underlying stock, implied volatility, position size, and how the trade is structured. Being the “smart” young trader I was, I soon realized I could look for stocks with very high option premiums and focus on selling those.   My trading platform even made it easy to create scans based on high implied volatility to find them.  It’s not hard to find extreme option premiums on small stocks.  Quite often, there is a pending big news event.  For example, a small pharmaceutical company that has its only product in trials and has FDA approval pending.  In a situation like that, where the company’s whole future could be riding on approval news, we’re likely to find astronomical option premiums.   Don’t be tempted. What could possibly go wrong?  If the approval falls through for some reason, the entire company could be out of business in short order.  And option sellers can be left “holding the bag.”  It happens.  There are no giveaways in the options market.  When premiums are high, they are high for a reason.   When we buy options, we have risk up to the amount of premium paid.  When we sell options, we could have a much greater risk of buying soon-to-be-worthless shares at the strike price. Here are some tips for selling option premium… Avoid Illiquid Product If you see a stock with very thinly traded options, take it as a warning sign.  If you want steady, consistent results, stick with larger, more well-known stocks with good liquidity.  I regularly look at S&P 500 and Nasdaq 100 stocks for candidates.  That’s an excellent place to start when looking for premium-selling opportunities.  Stocks with weekly options, and reasonable participation in those options, tend to be better candidates. When there’s good liquidity in the options, you’ll see decent volume and open interest across a range of strike prices and expiration dates.  These options should have narrow bid/ask spreads, sometimes as little as a penny wide.  You can get in and out of trades or extend duration by rolling at fair prices.  When the bid/ask spreads are extremely wide, it could be just you vs. the option Market Maker.  Option Market Makers are the buyers/sellers of last resort.  Market Makers generally hedge their directional risk as their core business is to make money not from directional moves but rather from the bid/ask spreads.  So, if it’s just you and the Market Maker trying to agree on a price, don’t expect any mercy.   Market Makers have kids to get through college too. Avoid Extreme Premiums Learn to recognize when premiums are extreme.  The implied volatility will be high versus the historical volatility.   When premiums look too good to be true, look closer.  There is always a reason. This is not to say you can’t sell expensive option premium. But, for example, don’t sell Puts on more stock than you’re willing to own.  Even if the stock goes to $0.  Five Rules for Option Sellers Adopt a long-term mindset.  We want our option selling strategies to be repeatable and sustainable, so we can stay profitably “in the business” for the long term. Don’t sell premiums on the hottest stocks you can find just because the premiums are huge and tempting. On any trade, mind your position size.   If the stock makes an outsized move or even goes to $0, will you be able to shrug off the loss?  Size accordingly.  Always understand your worst-case risk.   Stock prices can do things that we thought very unlikely when we opened the trade. Trade liquid products.  I can’t emphasize enough how important it can be to get fair prices when buying, selling, or rolling.  We don’t want to start our trades with the distinct disadvantage of not being able to get “fair” prices. Sign up for my free trading newsletter so you don’t miss the next opportunity! WANT TO LEARN MORE ABOUT OPTIONS TRADING? Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.    Our Options Trading Specialist, Brian Benson, continues to knock his trades out of the park. His current win rate is 80% meaning of the last 20 trades, 16 have finished in-the-money! If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. Brian, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com. Enjoy your day!
Crude Oil Prices - Will They Hold Above Key Support Level Or Begin To Unwind?

Crude Oil Prices - Will They Hold Above Key Support Level Or Begin To Unwind?

Chris Vermeulen Chris Vermeulen 18.08.2022 15:43
Talk of a Global Recession may prompt a broad decline in Crude Oil prices as the excesses of the past 10+ years unwind. This unwinding process pushed to the forefront for traders and investors has been prompted by a massive inflationary expansion after the COVID-19 lockdowns. How will it play out in the short-term and long-term?Unwinding Excess Price Cycle Phase May Push Crude Oil Below $60 ppbI believe Crude Oil will contract as the initial reduction in demand associated with high-priced gasoline and oil products and the threat of a Global Recession recede. This decline in Crude Oil prices is complicated as China/Asia economic and COVID crisis events continue to disrupt consumer discretionary income and asset valuation levels.Crude Oil prices are an excellent measure of consumer engagement and activity worldwide. As an economy grows, demand for Crude Oil increases as manufacturers, suppliers, service & support companies, and shipping companies must keep up. When an economy slows, or consumers decrease spending habits, Crude Oil starts declining as overall demand decreases.The best way to interpret this is that consumers spend willingly when stocks and home prices skyrocket. Yet, they turn away from spending when stocks and home prices turn downward. It is a natural, psychological reaction to unknowns and stress.Critical Support Near $87 May soon Be BreachedThis Daily Crude Oil Chart highlights the key price highs and lows as Fractal levels. It is essential to understand that the nearest real support level below $87 is just above $61 for Crude Oil. If Crude Oil continues to slide downward, I believe a strong downward price trend may occur if the $87 support level is breached.This would also suggest that a broad energy sector decline could take place over a 30~60-day period as Crude Oil attempts to identify new support. Yet, I believe this downward trend will be temporary in the longer-term scope of Crude Oil trends.After the 2007-08 Global Financial Crisis, Crude Oil collapsed by -77%, from $145 to $34, then rallied +232% to over $113 by 2011. If a Global Recession phase continues through the end of 2022 or into 2023, I suggest the recovery phase will prompt a solid recovery in Crude Oil prices over the next 3+ years.Post-COVID Excesses Seem Similar To The 2007-08 Market PeakThe initial contraction in the US markets throughout the start of the 2007-08 Global Financial Crisis occurred during an extended peaking pattern in the US stock market. It began to gain downward momentum as the US financial system started breaking down (Lehman, Bear Sterns, & Others). The collapse in the financial markets broke consumer expectations and spending habits as demand for commodities collapsed.This same type of market malaise seems to be currently taking place as the post-COVID rally phase has run its course and the global markets slide into a sideways price malaise – waiting for the “Lehman Moment.”I suspect the current demand destruction related to inflationary trends, high gasoline prices, and the threat of another global house price peak may be sending consumers into a similar contraction cycle. This is why I believe Crude Oil will slide below the $87 price level and attempt to find new support near $61 before we see any real upward price trends in the energy sector.Alternate Energy May Surprise While Oil Moves DownwardProviding an opportunity for traders, Solar, Battery, and other new forms of energy may experience a boom cycle while Crude Oil contracts. Crude Oil is used in all forms of manufacturing, transportation, and other aspects of the global economy. Yet, while Crude Oil contracts, alternative energy sources may experience a rising price cycle.President Joe Biden just signed the Inflation Reduction Act into law, pushing a massive $369 billion into new energy security and climate change (Source: Smartasset.com). This new investment in alternative energy sources, green energy, and increased Crude Oil supply will dramatically shift opportunities within the Energy Sector.TAN, the Invesco Solar Energy ETF, may rally more than 15% to levels above $101 before possibly continuing higher to retest the $120 to $125 2021 highs.Learn how our Total ETF Portfolio strategies can help you more efficiently protect and trade these big sector trends while keeping you away from high-risk setups.LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow the price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside, protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.Sign up for my free trading newsletter, so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Gold-to-Silver Ratio Heading Lower – Setup Like 1989-03

Gold-to-Silver Ratio Heading Lower – Setup Like 1989-03

Chris Vermeulen Chris Vermeulen 09.08.2022 16:08
Fear is starting to become an issue. Traders are starting to realize inflation, CPI, PPI, and global currencies are reacting to the sudden policy shift by the US Fed and global central banks. This fear is showing up in the Gold-to-Silver ratio as well.My research suggests the closest comparison to the current Gold/Silver setup may be found by looking at the early 2000~2003 US markets. Let’s investigate this setup a bit further.Gold-To-Silver Ratio Peaks Above 1.2 During COVID crisisOver the past 5 years, Gold consolidated from 2017 through the COVID Virus event. This consolidation is prompting an extreme high in the Gold-to-Silver Ratio to levels above 1.2. The only other time in history when the Gold-to-Silver Ratio reached levels above 1.2 was in 1991~92. This is aligning with the fall of the Soviet Union.This extreme peak in the Gold-to-Silver ratio marks a very weak Silver price compared to Gold. Psychologically, this represents a very real lack of fear related to global currencies/economies. The threat of extreme inflation trends.Now, as inflation suddenly became a topic near the end of 2021, the Gold-to-Silver ratio has moved decided downward. This illustrates Silver is rallying compared to the price of Gold as fear begins to elevate across the globe. Traders, consumers, and others are moving assets into precious metals near recent price lows to hedge against uncertainty, inflation, and currency devaluation.The Fall Of The Soviet Union Was A Global Catalyst Event – Just Like COVIDThe collapse of the Soviet Union prompted a global shift in how global currencies, threats, and opportunities were perceived. It also ushered in a new wave of capitalism throughout Russia that prompted a massive credit/economic expansion phase aligned with the birth of the Internet in the early 1990s. This is why we see Gold price levels stay rather muted from 1989 through 2002-03. It was a time of very little fear when global traders chased deals, DOT COM stocks, and Real Estate instead of precious metals.After the DOT COM bubble burst, and the 9/11 terrorist attacks rattled global financial markets, fear and precious metals suddenly came into focus again. The rally that took place after 2001 in Gold prompted a nearly 600% increase (from $260 to $1923). The biggest portion of this rally took place after the 2007-08 Global Financial Crisis.Is today any different than 2000~2002 in reality?The similarities seem too obvious to ignore…I believe a continued decline in Crude Oil, as well as a continued strengthening of the US Dollar, will likely take place throughout the end of 2022. In the meantime, Gold attempts to climb back toward recent highs. The catalyst for the breakout rally in Gold and Silver will likely be some extended breakdown in the US/Global financial markets and stocks or some new War/Aggression that pulls the US/EU into a conflict.Overall, I believe global currencies will continue to recoil because of risk/devaluation factors related to inflation and disruptions within the global economy; very similar to the end of the Soviet Union in 1991.My thinking is that Gold will attempt to hold above $1700 as a base support level while Silver attempts to hold above $19.00 as base support. Any major crisis event, war, or global financial meltdown may prompt a retest of these base support levels within the next 12+ months.If Gold/Silver Are Repeating A 2002-03 Setup, What Can We Expect In The Future?Then the breakout trend starts in Gold, which could happen as early as 2023 or 2024, I believe the next rally target for Gold will be somewhere above $3100. Then, we start a dedicated climb to levels above $4500 and beyond.It is difficult to predict any date targets for this type of rally, but I’m trying to illustrate what I see related to the similarities of the 1989~2003 market conditions with what I’m seeing right now. If you were around to live through this incredibly exciting time, you may remember many of these events. I’m suggesting we may be starting to move through similar events right now and I suspect we are somewhere near August 2000 right now.HOW CAN WE HELP YOU LEARN TO INVEST CONSERVATIVELY?At TheTechnicalTraders.com, my team and I can do these things:Safely navigate the commodity and crude oil trend.Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter, so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Should We Be Prepared For An Aggressive U.S. Fed In The Future?

Should We Be Prepared For An Aggressive U.S. Fed In The Future?

Chris Vermeulen Chris Vermeulen 04.08.2022 14:33
Traders expect the U.S. Fed to soften as Chairman Powell suggested they have reached a neutral rate with the last rate increase. The US stock markets started an upward trend after the last 75bp rate increase – expecting the U.S. Fed to move toward a more data-driven rate adjustment.My research suggests the U.S. Federal Reserve has a much more difficult battle ahead related to inflation, global market concerns, and underlying global monetary function. Simply put, global central banks have printed too much money over the past 7+ years, and the eventual unwinding of this excess capital may take aggressive controls to tame.Real Estate Data Shows A Sudden Shift In Forward ExpectationsThe US housing market is one of the first things I look at in terms of consumer demand, home-building expectations, and overall confidence for consumers to engage in Big Ticket spending. Look at how the US Real Estate sector has changed over the past five years.The data comparison chart below, originating from September 2017, shows how the US Real Estate sector went from moderately hot in late 2017 to early 2018; stalled from July 2018 to May 2019; then got super-heated in late 2019 as extremely low-interest rates drove buyers into a feeding frenzy.As the COVID-19 virus initiated the US lockdowns in March/April 2020, you can see the buying frenzy ground to a halt. Between March 2020 and July 2020, Average Days On Market shot up from -8 to +17 (YoY) – showing people stopped buying homes. At this same time, home prices continued to rise, moving from +3.3% to +14% (YoY) by the end of 2020.The buying frenzy then kicked back into full gear and continued at unimaginable levels throughout 2021 as interest rates stayed near lows and FOMO increased. Over the past 7+ years, the excess capital meant buyers could sell their existing homes, relocate to a cheaper area, avoid COVID risks, and reduce their mortgage costs with almost no risks. This “great relocation” event likely sparked the high inflation/CPI trends we are battling right now.(Source: Realtor.com)Extreme Easy Monetary Policies May Prompt A Harsh U.S. Fed Action In The FutureTraders expect the U.S. Federal Reserve to softly pivot away from rate increases after reaching a “normal level.” I believe the U.S. Federal Reserve will have to continue aggressively raising rates to battle ongoing inflation and global concerns. I don’t believe traders have even considered what may be necessary to break this cycle – or are simply hoping they never see 14% FFR rates again (like we saw in the 1980s).The harsh reality is the excess capital floating around the globe has anchored an inflationary trend that may be unstoppable without central banks taking interest rates to extremes. There was only one other period where I see similarities between what is taking place now and the recent past – 1970~2003.Throughout that span of time, the U.S. Federal Reserve moved away from the Gold Standard and entered an extended period of money creation. This prompted a big increase in CPI and Inflation, leading to extreme FFR rates above 15% in 1982 to battle inflationary trends (see the charts below). CPI continued above 5% for another 15+ years after 1982 – finally bottoming in 2010.What if the extended money printing that started after the 2007-08 Global Financial Crisis sparked another excess capital/inflation phase just like the 1970 to 2003 phase? What’s next?Excess Money Must Unwind Over Time To Prompt A New Growth PhaseMy thinking is the 2000~2019 unwinding phase, prompted by the DOT COM bubble, 911 Attacks, and the eventual 2008-09 Global Financial Crisis, pushed the devaluation of assets/excess toward extreme lows. This prompted the U.S. Federal Reserve to adopt an extended easy money policy.COVID-19 pushed those extremes beyond anyone’s expectations – driving asset prices and the stock market into a frenzy. As inflation trends seem unstoppable, the Fed may need to take aggressive actions to thwart the global destruction of capital, currencies, and economies and avoid a massive humanitarian crisis. Run-away inflation will harm billions of people who can’t afford to buy a slice of bread if it goes unchallenged.The U.S. Federal Reserve may be forced to raise FFR rates above 6.5~10% very quickly to avoid rampant inflation's destructive effects. And that means traders are mistakenly assuming the U.S. Federal Reserve will pivot to a softer stance.Real Estate Will Be The Canary In The Mine If Fed Stays AggressiveI believe Real Estate could see an aggressive unwinding in valuation and future expectations if the U.S. Fed continues to raise rates over the next 12+ months aggressively. Once mortgage rates reach 8% or higher, home buyers and traders are suddenly going to question, “where is this going?” and “where will it end?”.The Fed may have to break a few things to battle inflation trends. This same thing happened in the early 1980s, and real asset growth didn’t start to accelerate until the last 1990s (amid the DOT COM Bubble).Real Estate & Financials May Show The First Signs Of StressI believe IYR and XLF are excellent early warning ETFs for a sudden shift in consumer/economic activity related to future Fed rate decisions. Once the Fed moves away from expected rates/trends, the Real Estate and Financial sectors will begin to react to economic contractions and weakening consumer demand/defaults.This potential trend is still very early in the longer-term cycle, but I believe traders are falsely focused on a possible U.S. Fed pivot, thinking the Fed will shift away from continued rate increases. I believe the U.S. Federal Reserve must raise rates above 5.5% FFR in order to start breaking inflationary trends. That means FFR rates need to rise 125% or more from current levels (250 bp+) – which may be higher.HOW CAN WE HELP YOU LEARN TO INVEST CONSERVATIVELY?At TheTechnicalTraders.com, my team and I can do these things:Safely navigate the commodity and crude oil trend.Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter, so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn
US Fed - The Battle Against Excess Global Captial Continues

US Fed - The Battle Against Excess Global Captial Continues

Chris Vermeulen Chris Vermeulen 29.07.2022 16:59
US FED IS BATTLING EXCESS GLOBAL CAPITAL – WHICH IS CREATING INFLATIONThe US Fed continues to bring the big guns, raising rates another 75 bp (0.75%) on July 27, 2022. Even though they stated the economy is softening, current Inflation and CPI data suggest otherwise. The US Fed may be forced into another 75~100 bp rate increase next month if the US economy continues to show strong CPI and Inflation trends. There is only one other time in recent history like the current market environment – 1998~2004.The DOT COM Bubble was unique in the sense that excess capital flowed into technology/internet companies’ hand-over-fist. It seemed all you had to do was register a URL, come up with some crazy business plan, and go talk to investors/VC. It was not a crisis like the 2008-09 Global Financial Crisis event. The DOT COM Bubble was a process of unwinding/consolidating excess capital away from a euphoric speculative phase in the markets.I believe the current Pre & Post COVID market rallies are, again, very similar to the DOT COM rally phase – although this time, the focus is on foreign/global economies.Fed May Have To Disrupt Global Currencies/Economies In Order To Tame US InflationThere are some similarities to the 1998~2004 DOT COM bubble scenario in the current US markets. First is the rise in CPI and the huge increase in Inflation. CPI continued to rise throughout 1998~2008 – all through the DOC COM bubble disruption and up to the peak in 2007. The same type of thing is happening in CPI right now.The reason why I believe the US Fed will continue to aggressively raise rates is because US Inflation is RED HOT, and the past few rate increases have done little to disrupt US economic trends.  Yes, housing, retail sales, and manufacturing are starting to see a shift in demand/activity. But the Fed is trapped in a very difficult situation where they must attempt to unwind the capital excesses throughout the world by adjusting rates and capacity here in the US.That means the global markets will react to what the US Fed is doing and attempt to chase opportunities in a stronger US Dollar until the US Fed is able to break this cycle (see the change of direction in currencies near 2003 below).The Big Bang Event For Global Currencies Should Be Less Than 12 Months AwayI’m not going to try to predict when global currencies/economies will relent to the extreme pressures inching forward by the US Fed, Inflation, and other trends. But I will state that the GBP & JPY are already at a combined lowest ratio level compared to the US Dollar over the past 25+ years. I can only imagine the intense economic/valuation pressures that are stressing many foreign global economies/currencies as the US Dollar continues to strengthen. Debts, liabilities, ongoing expenditures, and essential services all need to continue for the people affected.It may be just a matter of time before bigger cracks start to appear. We may see more uprisings and riots as we saw recently in Sri Lanka. We may see additional regional economic collapse events as at-risk nations strain to maintain their debts/liabilities. We’ll possibly see various aggressions ramp up as currency valuations get pushed toward the extremes.Look at the US Dollar Rally in 1998~99 on the chart (above). Even though we had the DOT COM bubble burst in 1999~2000 and the 9/11 terrorist attacks in 2001, the US Dollar continue to strengthen until it broke down in late 2002 – nearly two years after the peak in the US stock markets.If the US Dollar were to rally above 110 and potentially peak above 115, that would represent an additional +7% rally in the US Dollar – and possibly represent another -10%~-15% collapse in the JPY and GBP.Let the currency wars begin. The Fed must continue to try to break US Inflation. To do that, it may have to break multiple foreign currency capital functions and push global capital functions from one extreme (speculation) to another (contraction).LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow the price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside, protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Fundamental Vs. Technical Analysis - What's Your Style?

Fundamental Vs. Technical Analysis - What's Your Style?

Chris Vermeulen Chris Vermeulen 27.07.2022 16:07
In investing and trading, we often hear debates on the merits of fundamental vs. technical analysis. Both aim to improve our probability of a profit.  Both methods have their usefulness when correctly applied.They are not the same by any stretch, so it’s not a debate over one “apple” vs. another.  It’s a comparison of two completely different approaches, and the comparison is more of the “apples vs. oranges” variety.   Trading vs. InvestingBefore we get into the fundamental vs technical analysis, there are important distinctions to be made between investors and traders.  Investors are more long-term growth-oriented, while traders focus on immediate income or aggressive account growth.  Market participants tend to be focused on one approach or the other.  But many are a mix of both. Investing and trading are different worlds, and it can be challenging to master either domain, much less both.  The key is to know what style is best for your timeframe, to what extent, and why.Technicals vs. FundamentalsThe Technical ApproachTechnicians are students of price patterns.  Technical analysis looks at the price movement of a security and uses these data to predict future price movements.  In general, the more liquid the product, the more reliable the price patterns on the chart.   A high-volume index product like the SPY ETF will more reliably chart investor and trader sentiment than a thinly traded penny stock.Technicians focus on chart price action, often supplemented by choosing among literally thousands of “indicators” and combinations thereof.   I can’t tell you how often I’ve heard from hardcore nerd technicians something like, “This indicator (or set of indicators) works in all markets and all timeframes.”   Uh, no.  I haven’t seen that yet in over 30 years of trading. Beware of too much chasing of a holy grail set of indicators.  That “forest” is vast, and you may never find your way out.  A relatively small group of indicators and patterns can serve technicians well.  The key is to know under which conditions to apply them and how.    The Fundamental ApproachThe fundamental approach looks at economic and financial factors that influence a business over the longer term.  Fundamentalists study financial statements, analysts’ reports and ratings, earnings reports, and forecasts.  If a company has earnings “X” that are expected to grow at “Y%”, it is still up to market participants to decide what value to place on their assessment.  And they can be a moody bunch. Why I Lean Toward The TechnicalsMy opinion of a “correct” valuation is essentially meaningless.  But as a technician, I care about what the big money thinks and how they move their capital.  The price action from the chart is a reflection of what the big money thinks.  That’s our edge as technicians.  We’re following the money rather than our opinions on valuation.Technicians are all about picking high-probability entries and exits.   As a technical trader, do I even care about fundamentals? Perhaps not. The charts can tell me what I need to know about what the big money is doing.  Can technicians safely ignore fundamental analysis?  There’s a case to be made based on the assumption that everything currently known about fundamentals is baked-in into price.  Efficient market theory, as it were.  Technicians can be quite successful by focusing just on price action.  But chart patterns and indicators can and do unexpectedly fail.   So good risk management is always a requirement.A hybrid approach for Buy-and-Hold? A herd mentality often drives markets.  One of the classic texts about market behavior is “Extraordinary Popular Delusions and the Madness of Crowds,” written by Charles Mackay and initially published in 1841.  It’s been commented on and analyzed ever since, and it seems not much has changed about human behavior.  History rarely repeats precisely, but it does tend to rhyme.If you’re a long-term investor of the “buy and hold” variety, you could dismiss technical analysis.  But you’d be doing yourself a disservice.  Why?  Because the economy and markets are cyclical and there are times when it is best to move to the sidelines to avoid large drawdowns.  Fundamentals can be far out of sync with price action when fear and greed take over.  “The Market can be irrational for longer than you can be solvent.” Staying fully invested through major economic and price corrections can be costly to long-term results.  At other times, technical analysis can help buy-and-hold investors to see when a security is oversold, bottomed out, and may have a high-probability re-entry.   Again, good risk management is essential to protect our capital.Fundamental vs. Technical analysis - summaryWhich is better for you?  It depends not just on your time horizon but also on what suits your personality better.   I doubt I can do fundamental analysis on a public company and gain some insight that few others see.  That would make me a first-order participant with no edge vs. an army of institutional professionals.  As a technician, I’m a second-order participant.  My goal is simply to assess the price action as accurately as I can and make decisions accordingly.HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Safely navigate the commodity and crude oil trend.Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Do Fed Rate Decisions Affect The Price Patterns For Gold?

Do Fed Rate Decisions Affect The Price Patterns For Gold?

Chris Vermeulen Chris Vermeulen 21.07.2022 21:26
Many traders are focused on Gold as price has contracted over the past 5+ weeks, and the $1700 level is being retested. This prompted my team and I to do some research related to the US Federal Reserve’s recent rate increases and how Gold has previously reacted to rising and falling interest rates.Exploring Price Patterns Between Gold and Fed Rate DecisionsI knew from the 2008-09 Global Financial Crisis and the 2020 COVID-19 event that Gold initially moves downward as extreme selling pressures drive almost all assets lower. Yet, in both cases, Gold quickly rebounded and began to move higher within 5+ weeks after setting up a bottom.I started my research by outlining “Normal Fed Activity” and “Extended QE Fed Activity” to see if I could identify any difference in how Gold reacted to fear and uncertainty in these phases. My thinking was that Gold would react more muted in a price range in Normal Fed Activity phases because crisis events and economic uncertainty are more muted overall. When the Fed enters an expansive QE phase, this activity is associated with a US/Global economy that requires extraordinary measures to prompt expected normal capital functions.I quickly learned that Gold tends to stay fairly muted through Fed rate increases and decreases in the absence of Fed QE functions. Yet, I learned something even more extraordinary about how Gold trends within extended Fed QE Functions: The Two-Stage Capitulation Bottom.The Two-Stage Gold Setup In QE Fed ActivitiesThis unique pattern seems to be associated with extended fear related to the US Fed (and global central banks) decisions to print extended capital and provide extraordinary capital support for global equity markets and the economy.  It does not appear to happen in credit contraction phases. So keep this in mind as we continue to watch global central banks navigate future economic concerns.My belief is that extended central bank QE functions are already baked into the current Gold price pattern and will continue to drive the two-stage pattern over the next 24+ months.Defining The Two-Stage Gold PatternThis pattern is relatively simple to understand when one considered the psychology behind the price moves. It starts with a Fed Funds Rate Increase after an extended period of lower Fed Funds Rate levels. When the Fed starts to raise rates, Gold tends to experience an almost immediate rally. Here are some recent examples:DatesFFR Rate IncreaseGold IncreaseOct-93 ~ Feb-963% ~ 6%+22%Apr-99 ~ Jul-994.75% ~ 6.5%+33%Apr-04 ~ Jul-061.0% ~ 5.25%+95%Oct-15 ~ Aug-190.13% ~ 2.42%+46%Mar-21 ~ Now0.07% ~ 1.21%+24%Each of these Gold rally phases was accompanied by a second-stage Gold rally when the US Fed suddenly reversed direction and started lowering Fed Funds Rates. It appears this panic by the Fed sends a jolt of fear into the markets – driving Gold & Silver into a potential parabolic price trend if the conditions are right. Here are some examples.DatesFFR Rate IncreaseGold IncreaseOct-93 ~ Feb-96 ~ Dec-983% ~ 6% ~ 4.63%+22% ~ -28%Apr-99 ~ Jul-99 ~ Dec-034.75% ~ 6.5% ~ 1.0%+33% ~ +67%Apr-04 ~ Jul-06 ~ Sept-111.0% ~ 5.25% ~ 0.08%+95% ~ +245%Oct-15 ~ Aug-19 ~ Apr-200.13% ~ 2.42% ~ 0.10%+46% ~ +49%Mar-21 ~ Now0.07% ~ 1.21% ~ Unknown+24% ~ UnknownExamples Of This Two-Stage Precious Metals Rally PatternThe most recent examples of this two-stage precious metals rally pattern happened in 2008-09 and 1999-2001. The COVID-19 example is still a valid example, yet that setup/cycle concluded very quickly as an anomaly event.Global Financial CrisisIn 2008-09, after the initial rally phase prompted by raising rates from Apr-04 to July-06, Gold collapsed as the 2008-09 GFC crisis unfolded. Gold quickly recovered back to near previous highs over an 18-week span after establishing a bottom. Then, Gold consolidated for 33 weeks before launching into an incredible parabolic rally phase – close to 10 months after Gold bottomed in October 2008 (see the Green Arrow Rally on the Gold Chart Below).RecessionFrom 1999-2001, a similar price pattern unfolded in Gold. This time, the bottom in Gold setup in February 2001, and it took an additional 67 weeks for Gold to rally back to near recent highs before stalling and rallying further upward as the US Fed reacted to the 9/11 attacks.Current Gold Price ActionCurrently, Gold has collapsed to price levels near $1700 after trading above $2000 just a few months ago as the US Fed aggressively raised interest rates attempting to combat inflation. I’m not trying to guess if/when the Fed will change course, but I do believe Gold is poised for a very significant rally from any bottom set up by the current two-phase price pattern.If history is any example, this current contraction in Gold and Silver is very likely a reaction to the sudden inflation crisis event and may prompt future price rally anyone’s imagination. Global central banks around the world are continuing to push QE in some form while the US Fed is attempting to raise rates. If the US Fed suddenly shifts towards more Dovish policies, I believe a new wave of fear will drive Gold higher – starting the second phase of the rally.If the Fed raises rates one or two more times before changing policy, that would simply build more momentum for any future breakout in precious metals.Concluding ThoughtsAs long as some quantifiable measure of stimulus or QE exists throughout the US/EU/Chinese economies, I believe this expansionary two-stage cycle in Gold & Silver will continue to play out.We have already experienced the early rally phase associated with the initial Fed rate increase. Now, we are in the contraction price phase where a bottom will set up – which may take many weeks or months still. We are waiting for the Fed to “flinch” and begin to decrease rates. That will start the new bullish price phase for Gold and Silver – and possibly send us into another parabolic price phase.HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Safely navigate the commodity and crude oil trend.Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Will U.S. Dollar Uptrend Slow Foreign Real Estate Investment In The US?

Will U.S. Dollar Uptrend Slow Foreign Real Estate Investment In The US?

Chris Vermeulen Chris Vermeulen 18.07.2022 21:29
The U.S. Dollar uptrend has been going on since January 6th, 2021:U.S. Dollar is at a 14-year high2020-2022 U.S. Presidential Cycle: USD appreciated +18.33% to date2016-2020 U.S. Presidential Cycle: USD depreciated – 12.80%2012-2016 U.S. Presidential Cycle: USD appreciated +37.20%International investors interested in buying U.S. real estate are having issues as converting their country's currency into the USD significantly reduces the amount of real estate they can purchase.According to an article by Patrick Clark of Bloomberg on July 11, 2022, "Across the country, nearly 60,000 homes sales fell through according to an analysis by Redfin Corp." "That was equal to 15% of transactions that went into a contract that month, the highest share of cancellations since April 2020, when early Covid lockdowns froze the housing market."Redfin NASDAQ RDFN, which offers a full-service real estate brokerage discounted service, has suffered a staggering loss of -92.80% in its stock price after putting in its February 2021 high.D.R. Horton NYSE DHI, America's largest homebuilder as of January 20, 2022, responsible for 71,292 home closings totaling $21.5 billion in revenue for 2021, has dropped -46.44% from its high.Other housing-related commodity markets such as copper -38.09% and lumber -70.24% are also signaling a recession.U.S. DOLLAR +18.33%UUP +18.33% U.S. Dollar ETFFXC -3.14% Canadian Dollar ETF; Spread CAD to the USD 21.47%FXA -10.73% Australian Dollar ETF; Spread AUD to the USD 29.06%FXF -11.06% Swiss Franc ETF; Spread CHF to the USD 29.39%FXB -12.33% British Pound ETF; Spread GBP to the USD 30.66%FXE -18.42% Eurodollar ETF; Spread EUD to the USD 36.75%FXY -25.86% Japanese Yen ETF; Spread JPY to the USD 44.18%INVESCO DB USD INDEX BULLISH FUND ETF • UUP • ARCA • DAILYREDFIN -92.80%February 2021 to present-$91.84 per share or -92.80%68 weeks down; 476 days downREDFIN CORPORATION • RDFN • NASDAQ • WEEKLYDR HORTON -46.44%December 2021 to present-$51.42 per share or -46.44%26 weeks down; 182 days downD.R. HORTON INC. • DHI • NYSE • WEEKLY COPPER -38.09%March 2022 to present-$1.91 per pound or -38.09%18 weeks down; 126 days downCFDS ON COPPER (US$/LB) • XCUUSD • OANDA • WEEKLYLUMBER -70.24%May 2021 to present-$1218.50 per board foot or -70.24%57 weeks down; 399 days downRANDOM LENGTH LUMBER FUTURES (US$/BOARD FOOT) • LBS1 • CME • WEEKLY VALUABLE INSIGHTS FROM SUCCESSFUL TRADERSThe New Market Wizards by Jack D Schwager (www.Amazon.com) is packed with insights from successful traders who have shared their wisdom based on firsthand trading experiences. The following snippets are from his super trader interviews that seem relevant for today’s market:Randy McKay:“I realized that prices moved based on the psychology of the people who were trading.” “You could actually see anxiety, greed, and fear in the markets.”“I never try to buy a bottom or sell a top.” “You don’t want to have a position before a move has started.” “You want to wait until the move is already underway before you get into the market.”“When I get hurt in the market, I get the hell out.” “It doesn’t matter at all where the market is trading.” “I just get out, because I believe that once you’re hurt in the market, your decisions are going to be far less objective than they are when you’re doing well.” “If you stick around when the market is severely against you, sooner or later they’re going to carry you out.”“I basically learned that you must get out of your losses immediately.” It’s not merely a matter of how much you can afford to risk on a given trade, but you also have to consider how many potential future winners you might miss because of the effect of the larger loss on your mental attitude and trading size.”LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow the price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside, protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
What Are The Driving Forces Behind The Shift In Global Market Risks?

What Are The Driving Forces Behind The Shift In Global Market Risks?

Chris Vermeulen Chris Vermeulen 14.07.2022 21:33
Global market risks have shifted dramatically over the past 90+ days. It almost seems as though the global markets turned 180 degrees overnight, generally going from moderately soft monetary policies to very extreme monetary policies and conditions. This sudden shift caught many traders and investors off guard and resulted in -20% to -25% losses for many.The driving forces behind this sudden shift are inflation and excess capital (M2) because of nearly a decade of near-zero US interest rates. Much of the excess capital created over the past decade has been deployed into global equities, infrastructure, and various speculative instruments (art, homes, cryptos, collectibles, and others). However, without a doubt, the recent burst of inflation is also a result of COVID restrictions. Such restrictions reduced supply capabilities and the resulting interruptions of manufacturing/supply have been felt throughout the post-COVID global recovery.Deleveraging Capital Excesses Causing Global Assets To Unwind Faster Than US AssetsThe US & Global markets have contracted by more than 25%~35%. The following Custom Global Market Index highlights the extensive devaluation in global assets compared to US assets. US assets have fallen -23% from recent highs. Global assets have fallen -32% from recent highs – and are breaking downward again.If this overall trend continues, it is very likely that Chinese & Asian markets could lead to a global contagion event related to extended credit/debt liabilities, economic expectations (GDP/Consumers), and real asset valuations. Over the past 5+ years, I’ve published many articles showing how China/Asia was uniquely positioned to take advantage of the US easy money policies. Results from this could extend credit/debt risks far beyond reasonable expectations. Is this global inflation event driving a global devaluation of assets?Excess Phase Peak Consumption Can Lead To Extreme Risk EventsThis excess phase consumption of cheap credit prompted many nations to engage in very high-risk multi-billion dollar infrastructure projects and other excesses.  The Belt-Road project is a perfect example of one nation extending billions of credit to at-risk nations to leverage cheap credit into future opportunities. As evidenced near every market peak, optimism near the peak of excess phases can be very addictive and dangerous.Global debt levels have skyrocketed over the past 5+ years. With the US prompting extreme easy money policies, many foreign nations extended debt levels far beyond reasonable expectations when COVID hit. The following chart from the IMF shows consumers and corporations increased debt levels at an excessively higher rate in 2020. The excessive global debt levels are now evidently working as a liability for many Asian & Emerging markets.(Source: https://www.imf.org/en/home)Protecting & Growing Wealth When Markets Are In ChaosI receive many questions from investors and traders every week. Generally, the most common question is “what can I do to profit right now from what is happening throughout the world?”. The simple answer to that question is to not extend any greater risk within your portfolio than necessary.This chart from Bank of America Investment Strategies shows how aggressively World Government Bonds are reacting to inflation and global central bank rate increases. The short story of this chart is that Bonds are pricing in very unfavorable growth and capital function conditions over the next 3 to 5+ years. World Government bonds have reached risk levels we’ve not seen since post-WWI (1918+) or the Great Depression (1930+).(Source: BankofAmerica.com)Research & Technology Highlighted Risks & OpportunitiesMy research team and I have posted articles over the past 5+ years highlighting how global markets were taking advantage of the US monetary policy and inadvertently gorging themselves on cheap credit to address infrastructure, industrial, and consumer demand.  We’ve been warning of this moment and have strategies/technology to help you protect and grow your wealth as this chaos continues.April 1, 2020: Concerned That Asia Could Blow A Hole In The Future Economic RecoveryJanuary 19, 2019: Will China Surprise The US Stock Market?July 9, 2018: China, Asia, and Emerging Markets Could Result In ChaosThis Bloomberg Gold vs. Global Bonds chart highlights how aggressively global Bonds have adjusted to extreme risk factors. What this is telling traders/investors is that global central banks appear to have very few tools to efficiently manage inflationary trends – and these reflect in extreme risk factors in global bonds. Quickly raising rates to combat inflation trends may aggressively compound risk factors at this point. This chart is clearly showing us that global risk factors have never been this extreme, or disconnected, over the past 8+ years.(Source: Bloomberg.com)I suggest taking immediate action while this market chaos continues. Even though it may seem frightening, this is one of the best opportunities for you to take control of your assets, and also learn how to better protect and grow your wealth while the markets deleverage and resettle. Eventually, a market bottom will confirm, and global assets will begin another rally phase. Before this happens, though, all traders/investors need to begin taking immediate actions/steps to manage, protect and grow their wealth as efficiently as possible.WHAT STRATEGIES CAN HELP YOU NAVIGATE THE CURRENT MARKET TRENDS?Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors. Also, learn how we identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market. The markets have begun to transition away from the continued central bank support rally phase. A revaluation phase has started as global traders attempt to identify the next big trends. Precious Metals may start to act as a proper hedge as caution and concern begin to drive traders/investors into safe havens.Historically, bonds have served as one of these safe havens. This isn't proving to be the case, so if bonds are off the table, what bond alternatives are there? How can they be deployed in a bond replacement strategy?HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Safely navigate the commodity and crude oil trend.Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.
Automotive: Problems With The Supply Of Chips! Could You Buy Tesla Or Toyota Easily?

Automotive: Problems With The Supply Of Chips! Could You Buy Tesla Or Toyota Easily?

Chris Vermeulen Chris Vermeulen 13.07.2022 15:54
Summer is here, and it’s time for a vacation. But this year, flight schedules are anything but reliable, and that new car for the road trip is probably not available at the local Toyota, Honda, Tesla, General Motors, Ford, etc dealership. Due to chip shortages and other issues, most car dealerships have little to no inventory to sell. High inflation and rising interest rates combined with high gasoline prices are causing people to rethink or pay more attention to their monthly budget expenditures. Furthermore, if you do decide to buy a used car, be prepared to pay top dollar. In some cases, a 3-year-old model may cost you as much as a new one. Historically autos almost always depreciate, but we are in an unusual market phenomenon where many used cars have appreciated significantly. What about the auto company stocks themselves? Cash is looking great versus owning one of these auto brands. Before we motor into the auto company stocks, let’s take a quick look at cash (the U.S. Dollar). U.S. DOLLAR +18.81% U.S. Dollar making a new 14-year high 2020-2022 U.S. Presidential Cycle: USD appreciated +18.74% to date 2016-2020 U.S. Presidential Cycle: USD depreciated – 12.80% 2012-2016 U.S. Presidential Cycle: USD appreciated +37.20% US DOLLAR INDEX • DXY • CAPITALCOM • WEEKLY TOYOTA -26.93% January 2022 to present -$56.77 or -26.93% 22 weeks or 154 days down The bear market has more room to drop; if you own it consider selling on rallies and going to cash TOYOTA MOTOR CORPORATION • TM • NYSE • WEEKLY HONDA -27.57% August 2021 to present -$9.19 or -27.57% 47 weeks or 329 days down The bear market has more room to drop; if you own it consider selling on rallies and going to cash HONDA MOTOR COMPANY, LTD. • HMC • NYSE • WEEKLY TESLA -47.38% November 2021 to present -$582.69 or -47.38% 32 weeks or 224 days down The bear market has more room to drop; if you own it consider selling on rallies and going to cash TESLA, INC. • TSLA • NASDAQ • WEEKLY GENERAL MOTORS -50.18% December 2021 to present -$31.91 or -50.18% 27 weeks or 189 days down The bear market has more room to drop; if you own it consider selling on rallies and going to cash GENERAL MOTORS COMPANY • GM • NYSE • WEEKLY FORD -55.71% January 2022 to present -$14.11 or -55.71% 22 weeks or 154 days down The bear market has more room to drop; if you own it consider selling on rallies and going to cash FORD MOTOR COMPANY • F • NYSE • WEEKLY VALUABLE INSIGHTS FROM SUCCESSFUL TRADERS Market Wizards by Jack D Schwager (www.Amazon.com) is packed with insights from successful traders who have shared their wisdom based on firsthand trading experiences. The following are some of Jack Schwager’s thoughts after his first set of super trader interviews that seem relevant for today’s market: Jack Schwager: “Sometimes, being out of the market may be nearly as important to success as the investments made.” “The critical lesson is that it is important not to be involved in the market when the opportunities are not there.” “Many super traders consider risk control more important than the methodology.” HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELY At TheTechnicalTraders.com, my team and I can do these things: Reduce your FOMO and manage your emotions. Have proven trading strategies for bull and bear markets. Provide quality trades for investing conservatively. Tell you when to take profits and exit trades. Save you time with our research. Proved above-average returns/growth over the long run. Have consistent growth with low volatility/risks. Make trading and investing safer, more profitable, and educational. Sign up for my free trading newsletter so you don’t miss the next opportunity! We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Does Selling Put Options During A Market Downturn Provide A Safety Net?

Does Selling Put Options During A Market Downturn Provide A Safety Net?

Chris Vermeulen Chris Vermeulen 08.07.2022 16:41
In a significant market downturn, bearish sentiment, if not outright fear, can drive down the share price of good companies rather drastically.  When the market is in a sustained selling mood, there can be a substantial disconnect between the long-term fundamentals and the technical price action we see on the chart. The Temptation to Bottom FishWhat can we do when good companies are trading at what appear to be bargain prices?  We could “stick our toe in the water” and buy shares.  But what if we’re wrong about whether a bottom in the share price is in place?  Or what if the stock takes a very long time to build a base and goes nowhere for an extended period?Selling PutsRather than buying shares, we could sell put options instead.  It’s a strategy famously used by Warren Buffett to acquire shares at a discount.First, a quick review of put options.  Someone who owns or is “long” a put has paid a premium to have the right, but not the obligation, to sell shares to the counterparty at the strike price.  But that right exists only until the option expires. The counterparty who has sold, or is “short” a put, has an obligation to buy shares at the strike price.  That obligation is eliminated when the option expires, and the put seller gets to keep the premium collected whether they have shares “put to them” or not.Although selling puts can be a way to acquire shares at a discount, traders (as opposed to investors) may just be interested in collecting the put premium as an income strategy.Rules to RememberWe must like the stock at or around the strike price and believe it will recover over time.  Even if we’re just selling puts to collect premiums, keep in mind that we could end up owning shares. Of course, there must be options available on the stock.  The options should have good liquidity – decent volume, open interest, and bid/ask spreads that aren’t too wide. The strike prices near the current share price should have hundreds, if not thousands, of open interest contracts.  The bid/ask spreads on the options should be just a few pennies wide.  It’s usually a good sign of option liquidity if weekly, not just monthly, options are available.What Makes a Good Candidate?Look for companies with a long history of good earnings that have rebounded after many economic cycles.   The company sells a product or service that will likely remain in demand for the foreseeable future.  (No “buggy whip” manufacturers.)  A good candidate will likely weather the current storm and come out okay when the economy recovers.Ideally, the share price is under $25, preferably under $20.   At that price level and below, the option premiums relative to the share price make for efficient use of capital and an attractive return on risk. Example SetupSay company “ABC” was trading for $34 a share before the general market selloff but now is trading for roughly half that at $15.60.   There is “blood in the streets,” but overall sentiment may be improving.The price action on the chart shows some tentative signs of bottoming.  A gap up with increased volume is a good sign.  A recent earnings report that wasn’t as “bad” as expected is another good sign.In this example, the premium for the $15 put is $1.20 for an expiration 42 days away.  While the $15 strike is currently out-of-the-money (OTM), if we had shares put to us at $15, our cost basis would be $15 - $1.20, or $13.80. If the shares were trading at $14 at expiration, we’d have shares put to us.  But we would still be ahead on the trade with a profit.  We could turn around and sell those shares at $14 and have a profit of $0.20.As options sellers, we’re selling time value that decays as the expiration date approaches.  We know that regardless of what happens with the share price, the time value we sold will be $0 at expiration. As an alternative to risking assignment, we could roll the trade forward rather than wait for shares to be put for us.  We could buy back the option on or near the expiration date and sell another option further out in time.  We can typically do that for a net credit.  In this example, we might be able to collect another $1 in premium.  So now our risk in the trade is reduced to $15 - $1.20 - $1.00 = $12.80.   SummaryPut selling can be a savvy way to go “bottom-fishing” for good stocks, either to acquire shares at a discount or just collect option premiums.   Selling puts gives us a way to get “paid” while we wait for the share price to recover.  We can make a profit if the share price goes up, sideways, or even down a bit. Sign up for my free trading newsletter so you don’t miss the next opportunity!WANT TO LEARN MORE ABOUT OPTIONS TRADING?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   Our Options Trading Specialist, Brian Benson, continues to knock his trades out of the park. His current win rate is 80% meaning of the last 20 trades, 16 have finished in-the-money!If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. Brian, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
Crude Oil Collapsed Below $100PPB - Has The US FED Broken Inflation?

Crude Oil Collapsed Below $100PPB - Has The US FED Broken Inflation?

Chris Vermeulen Chris Vermeulen 07.07.2022 16:55
On Tuesday, July 5th, Crude Oil collapsed very sharply, down over 10% near the lows, in an aggressive breakdown of the price. The $97.43 lows reached that day were more than -14% from recent highs (set on June 29, 2022) and more than -21% from highs set on June 14, 2022.Consumer Discretionary Spending Likely To Fall FurtherIn a recent research article (published June 9, 2022: CRUDE OIL PRICE AND CONSUMER SPENDING – HOW THEY ARE RELATED), we shared a similar breakdown that took place in Crude Oil in 2009 and how tightening consumer spending often correlates with peaks in Crude Oil when crisis events happen.Within that research article, I shared this chart highlighting the collapse in the Consumer Discretionary sector that preceded the downward collapse in Crude Oil. The interesting facet of this chart is we can see the inflationary price pressure in Crude Oil (and the general economy) countered by pressures put on consumers in the lower IYC price chart.Consumers Lead The Global Economy – Watch IYC CloselyAs prices rise, consumers are put under extreme pressure to keep their normal standard of living. As inflationary pressures continue, consumers make necessary sacrifices to manage their budgets – often going into debt in the process.Eventually, this cycle breaks, and inflationary trends end. This is clearly evident on the chart below in July 2008 – as IYC, the Consumer Discretionary sector, collapsed by more than 27% before Crude Oil finally peaked and broke downward.Since November 2021, IYC Has Fallen More Than -37%This current Weekly Crude Oil & IYC Chart shows IYC has collapsed by more than -37% from the November 2021 highs – well beyond the -27% collapse in 2008 that preceded the 2008-09 Global Financial Crisis event. Is the current collapse in IYC a sign that a broad global crisis event has already begun to unfold beneath all the news and hype? Will Crude Oil collapse below $75ppb as the global economy shifts away from inflationary price trends and bubbles burst?The Deflationary Price Cycle Is Not Over YetIf IYC falls below $55 in an aggressive downward price move, I would state the risks of a global deflationary price cycle (or extended recession) are still quite elevated. Currently, the $55 price level in IYC aligns with early 2019 price highs and reflects an extended price advance from the $12~$15 IYC price levels in 2008-09.If the $55 IYC price level is breached to the downside, I expect the $37.50~$40.00 price level to become future support – as that price level reflects the COVID-19 event lows.Still, these lower price targets represent an additional -32% decline in IYC and reflect a total of a -57% collapse in the Consumer Discretionary sector from the November 2021 peak levels. The potential target range of $37.50~$40.00 correlates with the 2008-09 GFC collapse range when IYC fell from $18 to lows near $8 (nearly -57%).We are still very early in the shifting deflationary cycle phase after the US Fed started raising interest rates. Learn to protect and profit from this global event with my specialized investment solutions. Visit, www.thetechnicaltraders.com to learn more.LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow the price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link: www.TheTechnicalTraders.com to learn how.
U.S. DOLLAR TRENDING HIGHER AS PRIMARY GLOBAL RESERVE CURRENCY

U.S. DOLLAR TRENDING HIGHER AS PRIMARY GLOBAL RESERVE CURRENCY

Chris Vermeulen Chris Vermeulen 06.07.2022 16:28
The U.S. Dollar is one market that continues to stand out as a stronghold for traders and investors. The world's primary reserve currency, the USD, remains solidly above all other major global currencies.As we move into the summer, the stock indices have not only been choppy but continue to trend lower.Commodities, metals, and energy appear to be topping and experiencing distribution. www.finviz.comCash is King as traders are now placing a value on liquidity. As losses mount and capital evaporates, traders are liquidating many different assets to meet margin calls and raise needed cash.Going to cash and salvaging what is left is a survivalist strategy. It has many benefits providing peace of mind as well as the future potential to generate significant returns down the road. If a trader does nothing and their capital continues to evaporate, it can be fatal to a trader’s overall attitude and hinder their ability to generate future profits.Markets go up, and markets go down. What makes the big difference is how we manage risk and how well we do in following the direction of price. Knowing and controlling one’s emotions dictates how long we can play the game or how successful we will be.Now is not a good time for traders to become complacent or ignore their basic money management and risk principles.U.S. DOLLAR 14-YEAR UP TRENDU.S. Dollar has been up 14.28 years from 2008 to 2022.2012-2016 U.S. Presidential Cycle: USD appreciated +37.20%2016-2020 U.S. Presidential Cycle: USD depreciated – 12.80%2020-2022 U.S. Presidential Cycle: USD appreciated +17.35% to dateU.S. Dollar New 14-year highUS DOLLAR INDEX • DXY • CAPITALCOM • WEEKLYU.S. DOLLAR ‘UUP’ ETF +16.96%January 6, 2021, to present USD ETF UUP + 16.96%Pullbacks or corrections have typically been 3-4%Pullbacks or corrections have typically lasted 20-50 daysPrice target extensions for potential resistance are at $36, $42, & $48INVESCO DB USD INDEX BULLISH FUND ETF • UUP • ARCA • DAILYU.S. DOLLAR VS U.S. EQUITY INDICESComparative Percentage Chart: U.S. Dollar ETF VS U.S. Equity Indices ETFsTimeframe: January 6, 2021, to present372 bars, 539 days, 77 weeks, 17.9 months, or 1.47 years+10.65% USDU ETF: Wisdom Tree Bloomberg U.S. Dollar Bullish Fund+2.75% SPY ETF: S&P 500+2.61% DIA ETF: Dow Jones Industrial Average-8.15% QQQ ETF: Nasdaq 100-12.01% IWM ETF: Russell 2000Maximum spread equals 22.66% (+10.65% USDU vs -12.01% IWM)Forecast is that the spread will continue to expandWISDOMTREE BLOOMBERG U.S. DOLLAR BULLISH FUND • USDU • ARCA • DAILYVALUABLE INSIGHTS FROM SUCCESSFUL TRADERSMarket Wizards by Jack D Schwager (www.Amazon.com) is packed with insights from successful traders who have shared their wisdom based on firsthand trading experiences. Here are a few of our favorites:Tom Baldwin:“My secret to trading success is perseverance.”“You have to love it to do it.”“You cannot let ego get in the way of a trade that is a loser; you have to swallow your pride and get out.”Tony Saliba:“You can make money in any kind of market if you are using the right strategy.”“I scale in and scale out of my positions so that I can spread out my risk.”“I do not like to do all of my orders at any one price in or out.”Dr. Van K Tharp:“Good rules, cut your losses short and let your profits run.”“Stress is not good as our brains have limited capacity in processing information and can shut down during periods of high stress.”“You have to take some hits if you are going to be successful, just keep them small.”“Many people allow their emotions to control their trading.”LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link: www.TheTechnicalTraders.com to learn how.
Consumer Confidence Dips Low In The Face Of Inflation

Consumer Confidence Dips Low In The Face Of Inflation

Chris Vermeulen Chris Vermeulen 30.06.2022 17:01
As the Fed continues to posture future rate increases to battle inflation, recent economic data shows Consumers are in a state of shock as price factors continue to skyrocket. Food, gas, materials, etc have shot up in price over the past 24 months – with no end in sight.Consumers Are Recoiling Away From Traditional Spending HabitsThe natural reactions of consumers fall into two categories: Grow or Survive. This is similar to how plants and trees operate. In healthy environments, plants and trees enter a growth phase – flowering and prospering. In an unhealthy environment, plants and trees enter a survival phase – directing resources toward anything essential for survival.Global inflation is putting pressure on central banks to thwart excesses in the markets after 8+ years of easy money policies and nearly 2+ years of COVID stimulus. Consumers thus seemed to have switched into Survival mode very quickly over the last 6+ months. This reaction could have very telling outcomes for global GDP and regional economies over the next 24+ months.In August 2021, we published an article highlighting the shift in consumer activity. It brings attention to how important Consumers are to the overall health of the global economy.Consumer Confidence Dips Below 100After the 2008-09 GFC, Consumer Confidence took more than 5 years to rally back above the 100 level (in 2015). The 2015-16 range was a US Presidential election year cycle – which usually disrupts US economic activities a bit.In early 2017, Consumer Confidence started to rally higher – eventually reaching a peak in October 2018 near 137.90. Historically, the only other time Consumer Confidence reached higher levels was in 1998-99 (DOT COM Peak).(Source: Investing.com)IYC May Start A Wave-5 Downtrend – Targeting $45-47 As A BaseTraders should consider the broader scope of the market trends while attempting to understand the opportunities that will come by waiting out the risks of trying to buy into a falling market. The Fed has clearly stated they intend to continue raising rates to break the inflationary cycle. Consumers will reflect these new risks by moving further away from traditional spending habits (Survival Mode) while attempting to wait out the risks to the environment.It appears IYC has formed a moderate Wave-4 peak, which is below the Wave-1 bottom. From a technical perspective, it appears IYC will attempt to move below the $47 level over the next few weeks – attempting to establish a new base/bottom.US Real Estate Showing Signs Of A TopNo matter how you slice the data, more homes are flooding the US markets right now. Sellers are trying to “cash-out” at sky-high prices. Yet, buyers are staying very cautious because of rising interest rates and borrowing costs. Price Reductions on listed homes have risen to the highest levels over the past 8+ years. Sellers with homes on the market longer are aiming to tempt buyers with a discount. The race to the bottom has started. The Fed is going to add more fuel to the declines with another rate increase.Recent Mortgage Refinance Index data shows the current 726.1 print is the lowest level since July 2000. This means the purchase and refinance are the most unfavorable for buyers over the past 22+ years (not since the peak of the DOT COM bubble).(Source: Investing.com)A reversion of home prices is almost a certainty at this point. I suspect a surge of new foreclosures and slowing sales will compound with layoffs and other economic contraction trends to present a “perfect storm” type of reversion event.IYR Targeting $70 to $75 As Assets UnwindIYR is likely to continue trending lower, targeting $70 to $75, before finding any real support. The reversion of asset valuation levels is still very early in the process of the Fed attempting to battle inflation. Depending on how the global markets react to the overall economic environmental change, we could see an extended contraction in assets lasting well into 2023 – possibly into 2024.Traders should stay cautious of trying to chase the falling market trends. Real opportunity for profits exits when the reversion event is complete and when opportunities for less volatile extended trends resume.Protective Patience May Be The Best Trader/Investor Attitude Right NowThe US markets are already down by more than -25% overall. Any extended decline from current levels could push many traders/investors into a crisis. When the bottom sets up and is confirmed, we’ll begin to allocate capital back into sector trends. In the meantime, we avoid this massive drawdown event by waiting on the sidelines and being ready to deploy capital.My strategies pulled capital out of the markets very early in 2022. Since then we have been sitting in CASH as a protective market stance while the global markets continued to decline. Protecting capital is the first rule for any trader/investor. Learning when to trade and when to be patient should be rule #2.As Consumer Confidence continues to decline, Consumers have moved into a protective/patient (Survival) mode. Traders and Investors should consider the longer-term risks of not adopting a similar stance right now. WHAT STRATEGIES CAN HELP YOU NAVIGATE THE CURRENT MARKET TRENDS?Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors. Also, learn how we identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market. The markets have begun to transition away from the continued central bank support rally phase. A revaluation phase has started as global traders attempt to identify the next big trends. Precious Metals may start to act as a proper hedge as caution and concern begin to drive traders/investors into safe-havens.Historically, bonds have served as one of these safe-havens. This is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there? How can they be deployed in a bond replacement strategy?HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Safely navigate the commodity and crude oil trend.Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link: www.TheTechnicalTraders.com to learn how.
Is The Inflation Boom Quickly Turning To An Inflation Bust?

Is The Inflation Boom Quickly Turning To An Inflation Bust?

Chris Vermeulen Chris Vermeulen 27.06.2022 16:58
We are only 6-months into the year, and it seems like the inflation boom is quickly going bust.The last few months have been very interesting as we see traders (rotating) moving out of one investment or market and into another. But as losses mount and capital diminishes, traders are eventually forced to liquidate even their favorite holdings to meet margin calls and raise needed cash.As followers of pricing, our opinions or forecasts are not of much value. What is important is price, as price directly determines our trading profits or losses.When market conditions change or at times when our trading begins to rack up losses, the best thing we can do as a professional is to go to cash. Going to cash allows us to get our perspective back. It allows us the possibility to enter the markets once more and provides the potential to make a lot of money.Markets go up, and markets go down. What makes the big difference is how we manage risk and how well we do in following the direction of price. Knowing and controlling one’s emotions dictates how long we can play the game or how successful we will be at it.As we review a few interesting and relevant long-term weekly charts, we realize that for many of us, the best option is simply to go to cash, watch, and wait.FOOD: WHEAT -23.74%Wheat had a 5-year run gaining more than $8 a bushel.From December 2021 to March 2022, it gained more than $4 a bushel.In March 2022, it made a 14-year double top at $12.From its peak, it has now been trending lower for 31 weeks.Wheat is a good indicator of the level of consumer food inflation.WHEAT CFD • WHEATUSD • OANDA • WEEKLYHOUSING: LUMBER -67.14%Random length lumber futures experienced a 14-month exponential rally.From its March 2020 Covid low it has rallied $1403 for a 500%+ gain.It is now down $1125 or -67.14% from its May 2022 peak.Lumber is a good indicator of the health of the new housing construction market.RANDOM LENGTH LUMBER FUTURES • CONTINUOUS • LBS1! • WEEKLY AUTOS: PLATINUM -29.15%Platinum experienced an 11-month rally that now has fizzled rather quickly.From its Covid 2020 low its price had more than doubled.It is now down -$376 per ounce or -29.15% from its February 2021 peak.Platinum is a good indicator of the health of the new automotive sales market where most auto manufacturer stocks have also lost more than -30% from their price peaks.PLATINUM USD • XPTUSD • OANDA • WEEKLY VALUABLE INSIGHTS FROM SUCCESSFUL TRADERSMarket Wizards by Jack D Schwager (www.Amazon.com) is packed with insights from successful traders who have shared their wisdom based on firsthand trading experiences. Here are a few of our favorites:Jim Rogers:“There is no such thing as a paper loss.” “A paper loss is a very real loss.”“When government measures are implemented to counteract a trend, you should sell the rally after the government action.”“The markets are the same, they go up and down.”Mark Weinstein:“Knowing when to stay out of the markets is as important as knowing when to be in them.”“Limit losses quickly.”“When institutions and specialists sell out, they don’t sell out at one price level, they scale out as the markets go up.”Brian Gelber:“It doesn’t matter if my opinion is right or wrong.”“All that matters is whether I make money.”“It is a good habit to wipe the slate clean and start fresh.”WHAT STRATEGIES CAN HELP YOU NAVIGATE THE CURRENT MARKET TRENDS?Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors. Also, learn how we identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market. The markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.Historically, bonds have served as one of these safe-havens. This is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there? How can they be deployed in a bond replacement strategy?HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Safely navigate the commodity and crude oil trend.Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Crude Oil Breaks Downward – Rejecting The $120 Price Level

Crude Oil Breaks Downward – Rejecting The $120 Price Level

Chris Vermeulen Chris Vermeulen 23.06.2022 16:39
The recent downward price trend in Crude Oil may have caught many traders by surprise. Just before the US Fed raised interest rates on June 15, 2022, Crude oil was trading above $120ppb. Less than 5 days later, it collapsed -12% and has continued to trend lower. Currently, Crude Oil is near -17% lower than recent highs.It appears Crude Oil has confirmed resistance near $120 and is devaluing as consumers pull away from traditional driving/spending habits while the Fed aggressively attempts to burst the inflation bubble. This type of contraction in Crude Oil is very similar to what happened in 2008-09 when the Global Financial Crisis (GFC) hit – Crude Oil collapsed more than -70% after IYC started trending lower in 2007.Consumer Discretionary Spending May Be Leading Crude Oil DownwardOn June 9, 2022, I published a research article (CRUDE OIL PRICE AND CONSUMER SPENDING – HOW THEY ARE RELATED) highlighting the correlation between Crude Oil and the Consumer Discretionary ETF (IYC). In this article, I suggested any breakdown in IYC, below $60, may prompt a broad downward price trend in Crude Oil – possibly targeting the $75 to $85 price level.Looking at this chart from our June 9, 2022 article, we can see IYC has already fallen more than -34% from recent highs. In 2007, peak oil prices were reached well before IYC declined more than -22%. So, in this case, the recent decline in IYC may already be predicting a downward price trend in Crude Oil – possibly targeting levels below $80 eventually.(Our Crude Oil/IYC Chart from the June 9, 2022 article)Aggressive Fed Action May Prompt Extreme Consumer ActionsIn an oddly similar way, the 2008-09 GFC represented an extreme excess/speculative phase in the US Credit/Housing markets. Today, we see many similar facets after the COVID-19 event – where house prices skyrocketed from +25% to +45% in some areas. Additionally, prior to 2007-08, we saw moderately high inflation levels, Crude Oil was trading above $100 ppb, certain commodities were in very high demand, and consumers were spending aggressively on almost everything.Today, we see a combination of some factors from the GFC as well as the DOT COM bubbles. Not only have house prices and raw commodities seen incredible rallies over the past 5+ years, but the Technology and Innovation sectors have also been leading market gains as well. Bitcoin rallied from under $1000 to a high of nearly $70,000 over the past 5+ years. The excessive speculation in the global markets recently is clearly evident in many various sectors and assets.Global Central Banks Are Running The Show (Again)I believe the US Federal Reserve will continue to raise rates aggressively in an attempt to tame inflationary trends. At the same time, we are likely to see many Global Central banks attempt to follow the US Fed in raising rates. This creates an economic environment many traders are unprepared for – an extended stagflation/recession period.The downward trend in Crude Oil and IYC may be the “canary” for the global economy and what to expect going forward. When consumers pull away from traditional pending habits, we are likely to see a broad contraction in global GDP and other economic factors.Traders and investors need to stay cautious of various global market trends and move back towards a more traditional method of managing their capital. The global markets are still 3x to 5x more volatile than at any time in recent history. Any aggressive trading style could lead to massive losses – as we are likely to see in many global Hedge Funds and managed accounts.LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market trend environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside, protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
As Market Trends Continue To Drop - Where Is A Good Place To Invest?

As Market Trends Continue To Drop - Where Is A Good Place To Invest?

Chris Vermeulen Chris Vermeulen 21.06.2022 21:52
Market trends continue to drop due to investor concerns about geopolitical events, record inflation, rising interest rates, slowing housing, plummeting auto sales, increasing retail inventories, expanding consumer credit, and pending layoffs.Even stocks that had previously held up or remained strong now seem to be showing signs of topping and breaking down. This is normal behavior for a bear market trend where the initial wave of vulnerable markets takes a hit which then causes traders to shelter their remaining cash in more robust markets. But as losses mount and their capital diminishes, traders eventually are forced to liquidate even their strong market assets to meet margin calls and raise needed cash.As we review the following market trends, we quickly realize that the best option for most traders is to simply go to cash, watch, and wait.BERKSHIRE HATHAWAY -25.34%BRK was one of the few companies in the early part of Q1 2022 that bucked the downtrend and had remained strong. By the end of Q1 2022, BRK had put in a top that was greater than 200% of its Covid 2020 low. Now, as we approach the end of Q2 2022, BRK has lost -25.34% and is down -10.34% year-to-date.BERKSHIRE HATHAWAY INC • BRK.A • NYSE • DAILYQQQ NASDAQ 100 ETF -33.16%QQQ put in its top at the very end of Q4 2021 primarily due to rising inflation and the strong US dollar. After its initial Q1 2022 drop of -21.6%, QQQ had a rally back up, which was a 61.8% correction to put in a lower top. Now, as we approach the end of Q2 2022, QQQ has lost -33.16% and is down -30.98% year-to-date.INVESCO QQQ TRUST SERIES 1 ETF • TBF • ARCA • DAILYRUSSELL 2000 INDEX -32.23%The Russell 2000 index (comprised of 2,000 small-cap companies) put in its top at the very end of Q4 2021 due to rising inflation and the strong US dollar. After its initial Q1 2022 drop of -20.93%, the Russell had a rally back up, which was a 38.2% correction to put in a lower secondary top. Now, as we approach the end of Q2 2022, the Russell has lost -32.23% and is down -25.81% year-to-date.US RUSSELL 2000 STOCK INDEX • OANDA • DAILYBITCOIN -71-87%Bitcoin put in its final top at the very end of Q4 2021. Bitcoin had a 68-day rally back up, which only corrected about 35% of its initial down move to put in a lower secondary top. Now, as we approach the end of Q2 2022, Bitcoin has lost -71.87%.BITCOIN / US DOLLAR • BTCUSD • BITFINEX • DAILYVALUABLE INSIGHTS FROM SUCCESSFUL TRADERSMarket Wizards by Jack D Schwager (www.Amazon.com) is packed with insights from successful traders who have shared their wisdom based on firsthand trading experiences. Here are a few of our favorites:Willian O’Neil: “You have to cut your losses fast.”“You should be able to win even if you are right only half the time.”“The key is to lose the least amount of money possible when you are wrong.”David Ryan:“A rigid stop-loss rule is an essential ingredient to the trading approach of many successful traders.”Marty Schwartz:“One of the tactics in the Marine Corps officer’s manual is either go forward or backward.”“Don’t just sit there if you are getting the hell beat out of you.”“Even retreating is offensive, because you are still doing something.”“As a trader, you a forced to confront your mistakes because the numbers don’t lie.”“The most important thing is money management, money management, money management.”“I try not to go against the moving averages; it is self-destructive.” “Is the price above or below the moving average?” “That works better than any tool I have.”LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market trend environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside, protecting our hard-earned capital is essential to our survival and success.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Investors Who Are Liquidating To A Cash Position - What To Do Next?

Investors Who Are Liquidating To A Cash Position - What To Do Next?

Chris Vermeulen Chris Vermeulen 13.06.2022 22:13
Bank of America, Michael Hartnett, Chief Investment Strategist recently stated, “The bear-market rally for stocks has disappeared as investor concerns about inflation and interest rates linger.” “We’re in a technical recession but just don’t realize it.”Freight Waves, Henry Byers reported, “US import demand is dropping off a cliff as inbound container volumes to the US are reverting to pre-pandemic levels.” Byers went on to say that “The consumer is getting crushed as conditions for the consumer seem to be getting worse and worse as inflation takes hold and prices get more and more expensive.”We have quickly moved from seeing the dark clouds on the horizon to the start of entering the initial storm wall. The USD put in a major low on January 6th, 2021. Since then it has been in a strong uptrend as global investors seek safety with the uncertainties about geopolitical events, record inflation, rising interest rates, slowing housing, plummeting auto sales, increasing retail inventories, expanding consumer credit, and pending layoffs.Source: www.finviz.comUS DOLLAR ETF: UUP +16.69%UUP remains in its uptrend as the price continues to move up from its base of accumulation.After having a brief 2-week pullback of -3.45% UUP has found support and is now looking to extend its bull market trend.Investors who are liquidating stocks and moving to a cash position could consider UUP to capitalize on the strengthening US Dollar.INVESCO DB USD INDEX BULLISH FUND ETF • UUP • ARCA • DAILY20+ YEAR TREASURY INVERTED ETF: TBF +38.89%TBF remains in its uptrend as the price continues to move up from its base of accumulation.After having a 3-week pullback of -6.21% TBF has found support and is now looking to extend its bull market trend.Investors who are liquidating stocks and moving to a cash position could consider TBF to capitalize on the FED raising interest rates to try and curb inflation.PROSHARES SHORT 1X 20+ YEAR TREASURY ETF • TBF • ARCA • DAILYS&P 500 SHORT INVERTED ETF: SH +19.33%SH remains in its uptrend as the price continues to move up from its base of accumulation.After having a 2+-week pullback of -7.19% SH has found support and is now looking to extend its bull market trend.Investors who are liquidating stocks and moving to a cash position could consider SH to capitalize on the falling stock market.PROSHARES SHORT 1X S&P 500 ETF • SH • ARCA • DAILYVALUABLE INSIGHTS FROM SUCCESSFUL TRADERSMarket Wizards by Jack D Schwager (www.Amazon.com) is packed with insights from successful traders who have shared their wisdom based on firsthand trading experiences. Here are a few of our favorites:Paul Tudor Jones:“If you have a losing position that is making you uncomfortable, the solution is very simple; get out, because you can always get back in.” “There is nothing better than a fresh start.”Ed Seykota: “There are old traders and there are bold traders, but there are very few old, bold traders.” “Losing a position is aggravating, whereas losing your nerve is devastating.” “Good traders; Many are called, and few are chosen.”Larry Hite:“We always follow the trends, and we never deviate from our methods.” “I have two basic rules about winning in trading as well as in life; If you don’t bet, you can’t win.” “If you lose all your chips you can’t bet.”WHAT STRATEGIES CAN HELP YOU NAVIGATE THE CURRENT MARKET TRENDS?Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.Historically, bonds have served as one of these safe-havens. This is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there? How can they be deployed in a bond replacement strategy?Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies which include a real estate ETF. We can help you protect and grow your wealth in any type of market condition. Click the following link to learn more: www.TheTechnicalTraders.com
Trading the Calm Before the Storm - Consider Putting On A Long Strangle

Trading the Calm Before the Storm - Consider Putting On A Long Strangle

Chris Vermeulen Chris Vermeulen 10.06.2022 22:04
There are times when markets consolidate and move sideways in a relatively narrow range.  We often see low volatility, little trending, and “choppy” price action when the market is slow. Range-bound, consolidating markets eventually resolve in one direction or the other. Breaking out of a narrow range often takes a catalyst event like a highly anticipated economic report or – in the case of individual stocks – something like an earnings report or FDA approval. Quite often, it is the anticipation of the event itself that keeps price range-bound.  Without knowledge of the event outcome, both bulls and bears are waiting it out before making large commitments.Buying a long StrangleA long strangle consists of buying both an out-of-the-money call and put on the same underlying with the same expiration date.   A long strangle is opened for a debit and can profit from a large move in the underlying. The profit potential is unlimited on the upside and can be substantial on the downside. The potential loss can be as much as the total cost of the strangle. Both options will expire worthless if the stock price is equal to or between the strike prices at expiration.Since we are buying all-time value on both options, we might expect volatility crush and rapid theta (time value) decay after the price has broken out of the range. Therefore, we want to close such a trade after the price breakout but well before the option expiration date.It can be tempting to have a simplistic view of buying a strangle and thinking it should be profitable regardless of direction. But there are no such giveaways in options markets.We often see that implied volatility is high ahead of known upcoming events. That “juices” the options prices ahead of the event, and then there can be a volatility crush when the event has passed. That can make it very challenging to profit from a long strangle, which is why I rarely do them.To consider putting on a strangle, I’m looking for a particular setup where the price is range-bound, and volatility is low before the catalyst event. That puts the probability of profit much more in my favor.To Strangle or To Straddle?A straddle is similar to a strangle, but the strike prices on the put and the call are equal. Traders often debate which strategy is better. The cost and maximum risk are lower for a strangle than for a straddle. The breakeven points for a strangle are further apart than for a comparable straddle. There is also a greater chance of losing 100% of the cost of a strangle if it is held to expiration. Long strangles are more sensitive to time decay than long straddles. When there is little or no price movement, a long strangle will experience a greater percentage loss over a given time period than a comparable straddle.An advantage for a straddle is that the breakeven points are closer together than for a comparable strangle. There is less of a chance of losing 100% of the cost of a straddle if it is held to expiration. Long straddles are less sensitive to time decay than long strangles. When there is little price movement, a long straddle will experience a lower percentage loss over time than a comparable strangle.I generally lean towards the strangle because of the lower debit and risk.  And since I put on the trade because I’m expecting a large move, I don’t see much wrong with my strikes being a bit away from the underlying. If I’m right and there is a significant move in price, the straddle should also perform well.  Example SetupThis chart shows prices consolidating sideways in a narrow support/resistance range (shaded area).   This is a zone to look at putting on the strangle. At the yellow arrows, we see a well-qualified entry point. The price action is slow, and the volatility (purple line) is low.Then we see the price break – in this case, to the downside along with an increase in volume (green arrows).  As price breaks out of the range, we see an increase in volatility. At this point, we may have a profit in the trade. Don’t be greedy. Take what the market gives and move on. This particular trade had a >23% return on risk in a matter of hours when the price broke down.SummaryIf a market is range-bound before an expected catalyst event and volatility is low, consider putting on a long strangle (or straddle).  The relatively low volatility is an essential part of the setup that tilts the odds in our favor.  We don’t want volatility crush and rapid time decay to rob us of the profit opportunity.  The key is to put this trade on before the price breaks out and before the implied volatility is elevated.  Once the range is broken, take profits quickly. Sign up for my free trading newsletter so you don’t miss the next opportunity! want To Learn More About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   Our Options Trading Specialist, Brian Benson, continues to knock his trades out of the park. Since he has joined our team at The Technial Traders he has a 78% win rate, and of the last 27 trades, 23 were winners equalling an 85% in-the-money finish!If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. Brian, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
Crude Oil Price And Consumer Spending - How They Are Related

Crude Oil Price And Consumer Spending - How They Are Related

Chris Vermeulen Chris Vermeulen 09.06.2022 15:11
Crude Oil & Gasoline prices have been a hot topic for almost everyone recently. As inflation surges, consumers are feeling the increased pricing pressures from all sides right now. It is starting to reflect in the use of credit cards, discretionary spending habits, and summer holiday travel plans.As the US Fed adjusts rates to burst inflation trends, consumers are left trying to navigate a minefield of unknowns. How far will the Fed have to raise rates – and how quickly? Will this affect the jobs/housing markets? How will this affect credit/borrowing costs? Will a US recession risk a bigger collapse in US jobs/economy – creating broader issues for consumers?The natural reaction of consumers at times like these is twofold. First, they pull away from making huge purchases. Second, they watch every penny being spent. Therefore, we are seeing consumer discretionary spending, auto sales, vacation rentals, and other types of spending sharply falling right now.IYC Collapsed In 2007-08 – Just Before Peak Oil PricesI remember watching the Consumer Discretionary ETF (IYC) collapse throughout most of 2007-08, just before the Global Financial Crisis (GFC) hit. As the US Fed continued to raise rates in 2005-06, and as the US economy started to weaken, Consumers acted like a “canary in a coal mine” – pulling away from normal spending habits as fear and uncertainty levels rose.What I found interesting about the rising Crude Oil prices at that time, was that they appeared to compound the speed at which consumers pulled away from the economy. This resulted in a much more aggressive collapse eventually. As you can see from the Crude Oil/IYC chart below, is that Crude Oil rallied more than 100% (from $70 to above $140) at the same time consumers were pulling away from the economy. The speed of the rally seemed to push consumers further away from normal activities. In a way, this is like a self-fulfilling price event.Are we seeing the same thing happen right now?IYC Collapsed More Than -34% Already – Are We At Peak Oil Now?When the GFC finally hit, IYC collapsed another -55%, and Crude Oil fell from $147 to $33 ppb, more than -77%. The GFC resulted in one of the biggest market declines since the Great Depression.The increased volatility and peak in oil prices seemed to take place as the end of an excess phase bubble was starting to unwind. Consumers were already pulling away from the economy at that time.More recently, IYC has been falling since early November 2021 (for over 7 months). Crude Oil has already risen from $62 to $130.50 (more than 100%). This begs the question: have we already reached peak oil prices while the consumer discretionary sector is nearing a major breakdown event (see chart below)?The Three Factors At Play: Consumers, Refiners, US FedIn 2008, when the GFC crisis started, the factors that initiated the collapse were related to consumer/institutional/global finance and credit markets. The US Fed played a role by raising interest rates above 5% while the excess of the housing market boom (an excess phase bubble) started to unwind.Now, we have different factors at play. The US Fed is still a major player in this equation – attempting to raise interest rates to combat inflation. Consumers are still doing what they do – reacting to the fear and uncertainties of a changing economic future while trying to provide for their families.  This time, COVID and supply-side issues drive some aspects of Oil/Gas price levels. Yet we have to also understand the excessive stimulus and capital creation that has taken place over the past 3+ years.In some unique way, the current global economic situation is not that different than what was taking place in 2006-08 throughout the globe. The primary difference this time is the COVID virus event and the disruption of supply across the globe.$120 Peak Oil Appears Likely – Watch IYC For A BreakdownWatch IYC for any continued breakdown below $60 as a sign the US/Global economy, and Oil may start to breakdown as well. Remember, Consumers are the “canary in the coal mine”. We will likely see a big shift in consumer spending, and how much credit they are using to pay their bills before we see a big breakdown in Crude Oil.Watching IYC move lower over the past 7+ months and seeing the -34% price decline recently suggests the $120 Crude Oil price level may be the critical resistance level going forward. Watch for Oil to retest and fail near $120 as confirmation of this potential peak level.WHAT STRATEGIES CAN HELP YOU NAVIGATE THE CURRENT MARKET TRENDS?Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.Historically, bonds have served as one of these safe-havens. This is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there? How can they be deployed in a bond replacement strategy?Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies which include a real estate ETF. We can help you protect and grow your wealth in any type of market condition. Click the following link to learn more: www.TheTechnicalTraders.com
Strong U.S. Dollar Biting Into Multinationals

Strong U.S. Dollar Biting Into Multinationals

Chris Vermeulen Chris Vermeulen 06.06.2022 16:58
“A hawkish Federal Reserve and heightened geopolitical tensions have driven a 14% gain in the U.S. dollar against a basket of currencies over the last year, forcing companies such as Cocoa-Cola Co (KO.N) and Procter & Gamble (PG.N) to temper expectations for the rest of the year.”Microsoft is one of the latest companies to warn of a fourth-quarter currency headwind.The following was reported by Reuters on June 2, 2022: “Microsoft warns of forex hit; cuts forecast”“Microsoft Corp (MSFT.O) on Thursday cut its fourth-quarter forecast for profit and revenue, making it the latest U.S. company to warn of a hit from a stronger greenback.”Source: www.finviz.comU.S. DOLLAR PAIRS • FOREX.COM • DAILYUSD ETF UP +16.31%Over the course of the last year, the U.S. dollar Bullish ETF (UUP) has gained +$3.94 or +16.31%. This is at a time when the U.S. stock indices have a current year-to-date loss of DJIA 30 -9.46%, S&P 500 -13.80%, and Nasdaq 100 -23.11%.Since the U.S. Dollar was put at a major low on January 6, 2021, the trend has been solidly up.INVESCO DB USD INDEX BULLISH FUND ETF • UUP • ARCA • DAILYUSD RETRACEMENTS ARE IN THE 2-4% RANGEAs professional traders who study prices, we see that the maximum pullback in the U.S. dollar has been 57 days and -4.4%. The recent pullback in the UUP (US Dollar Bullish ETF) has only been 15 days, or -3.24%. This 3-week pullback or more importantly the retracement of -3.24% is safely within the previous retracement data sets.UUP (USD) remains in an uptrend and until the price confirms otherwise we should consider this trend will continue. There are significant headwinds ahead for stocks and especially multinational companies whose revenues and earnings are being diminished by the strong USD.INVESCO DB USD INDEX BULLISH FUND ETF • UUP • ARCA • DAILYUSD HEADWINDS CAUSING PROBLEMS FOR NASDAQ COMPANIESThe NASDAQ QQQ ETF remains solidly in a bear market as the U.S. dollar continues to batter revenue and earnings for these global companies.It should come as no surprise that the recent bounce in the QQQ occurred at 50% of the post-Covid bull market rally. This bull rally was +$235.83 and 50% of this is $117.91. The QQQ found temporary support about -$1.00 below the 50% level with its drop of -$118.90.Due to globalization, most if not all of the NASDAQ 100 QQQ companies will feel the effect of the USD headwinds. Most of the group is a true multinational but for those whose business solely focuses on the U.S. market, their revenues and earnings will still be impacted by the non-USD origin of their products and or support services (manufacturing, cost of goods, etc.).Note: Inflation is causing increases in company product/service increased pricing resulting in consumer cutbacks that may cause “The Perfect Storm” in the fourth quarter.INVESCO QQQ TRUST ETF • QQQ • NASDAQ • DAILYVALUABLE INSIGHTS FROM SUCCESSFUL TRADERSMarket Wizards by Jack D Schwager (www.Amazon.com) is packed with insights from successful traders who have shared their wisdom based on firsthand trading experiences. Here are a few favorites:Michael Marcus – “A good trader has to be open and flexible, willing to see anything.” “When in doubt, get out, get a goodnight's sleep, you can always come back.”Bruce Kovner – “You have to be willing to make mistakes regularly; there is nothing wrong with it.” “I know where I’m getting out before I get in.” “In a bear market, you have to use sharp countertrend rallies to enter positions.”Richard Dennis – “The secret is being as short term or as long term as you can stand, depending on your trading style.” It is the intermediate-term that picks up the vast majority of trend followers.” “The best strategy is to avoid the middle like the plague.”LEARN FROM OUR TEAM OF SEASONED TRADERSIn today’s market environment, it’s imperative to assess your trading plan, portfolio holdings, and cash reserves. Experienced traders know what their downside risk is and adapt as necessary. Successful traders manage risk by utilizing stop-loss orders, rebalancing existing positions, reducing portfolio holdings, liquidating investments, and moving into cash.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recover.A 50% loss requires a 100% gain to recover.A 60% loss requires an even more daunting 150% gain to simply break even.Recovery time also varies significantly depending upon the magnitude of the drawdown:A 10% drawdown can typically be recovered in weeks to a few months.A 50% drawdown may take many years to recover.Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Proved above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity! We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies which include a real estate ETF. We can help you protect and grow your wealth in any type of market condition. Click the following link to learn more: www.TheTechnicalTraders.com
Tim 'Cycles Man' Wood Podcast - Cyclical Technical Analysis

Tim 'Cycles Man' Wood Podcast - Cyclical Technical Analysis

Chris Vermeulen Chris Vermeulen 03.06.2022 15:26
Sign up for my free trading newsletter so you don’t miss the next opportunity!Introduction: 00:00Your stock and commodity supercycles, technical analysis, proprietary trading strategies, live mentoring, and an active community of traders excite you. Are you looking for proven trade alerts complete with portfolio allocation, entry, price, target, and protective stop levels? Find out why thetechnicaltraders.com is the best source for active traders and investors to learn and earn. Visit www.thetechnicaltraders.com today. Welcome to the Technical Traders podcast. The show that brings you technically proven strategies and trade ideas from experts around the world. We're going to help you make more money with less risk so you can take your trading to the next level. Now here's your host, Jim Goddard.Jim Goddard: 00:47My guest is Tim "Cycles Man" Wood, editor of Cycles News and Views on Cyclesman.com. Welcome to the Technical Traders podcast.Tim Wood: 00:57Jim, thanks for having me.JIM GODDARD: 00:59TIM, BEFORE WE GET INTO THE INTERVIEW, CAN YOU TELL US A LITTLE BIT ABOUT CYCLES NEWS AND VIEWS?Tim Wood: 01:06Well, Cycles News and Views, I don't call it a newsletter. It's a research letter to try to help people gain insight and an understanding of the market through the use of cycles, and cycles are really nothing more than trend quantification. And then you wrap some statistics around it, and you can develop statistical expectations. And then, I also use the kind of in the background as a broader perspective with Dow theory.JIM GODDARD: 01:40SO TIM, HOW DID YOU GET INTO TRADING OR INVESTING?Tim Wood: 01:45Well, that's an interesting story. I haven't thought about it in a long, long time - you're making me go back, but I guess it all started in college. I took it was; actually, I don't remember the name of the class, but it was; I remember it was a senior 400 level economics class or finance class, and man, it was fundamentals of analysis, I think, or something to that effect. And I remember we, we were deriving equations and this professor he's writing on the board and we're doing all this math and all this stuff, and there was one chapter on technical analysis. And when we're doing all this stuff, and I realized that I see the philosophy, I'm exposed to the philosophy of technical analysis, that it's all discounted in price, and it made sense to me.Tim Wood: 02:38And so, from there, it became self-study. I bought some books and John Murphy's books and Bob Proctor's material back in the day F&N was on TV, and you had Real Analysis on TV. And actually, we got it on a satellite back in the day. And you know, Peter Lites was on there. Bob Proctor and then Richard Russell. I got into Dow theory, and Richard Russell actually helped me obtain some of the original old writings from Robert Ray. Robert Ray, I think he and William Peter Hamilton put Dow theory on the map. Dow never actually wrote a book. He died in 1902. William Peter Hamilton worked for Dow. And, you know, he wrote one book and some articles and stuff.Tim Wood: 03:35And then, Robert Ray worked for him in the thirties, and he was the leading Dow theory person during the 1930s; and Robert Ray wrote a lot of material. Anyway, Russell helped me get that. I had a relationship with him, and it's kind of cool. It's like reading the dead sea scrolls or something. You know, original old technical analysis and was able to put things together and see how cycles in the Dow theory, there was a common element in that. I discovered that every primary trend change, be it bullish or bearish, coincided. There were actually dates. William Peter Hamilton, I think it was--; gave dates in his book. And I saw that I'm like, oh my God, that's four-year cycle tops and bottoms. And so I saw how the two theories meshed, and you know, the rest is history.Tim Wood: 04:31From there, I was able to make some calls. I had an article published in 2000 or 2001. It's a technical analysis of Stocks, Commodities Magazine calling the top and end the decline. I said that we would go down below a certain level, and we exceeded that level by 200 points. So my target was met, and the rest was history. And from there, Cycles News and Views began.JIM GODDARD: 05:01IS THERE ANYBODY YOU REALLY ADMIRE OR WHO INFLUENCED YOU TO BECOME INVOLVED IN THE FINANCIAL MARKETS?Tim Wood: 05:07Yeah, I think the guys that I mentioned, Bob Proctor, Peter Lites, and Richard Russell, all three, I think, were huge. Bob Proctor, I've actually physically met at an investor conference in New Orleans early on. He kind of took me under his wing, super super guy. And so is Peter; I'm not taking anything away from any of them. They were very complimentary. To tell the story about Peter Lites, I sent him an article, the article that was published, actually, I don't remember if it was published yet, but I sent the work; I just did the work. And I left out one, backing up the cycles work I discovered through Walter Bressert's work and took a course from Walter Bressert. It took about a year to get through that correspondence course hands-on with Walter Bressert.Tim Wood: 06:03He was a real pioneer in the cycles world. And at the time, there was an Institute; it was called the study for the foundation of cycles. I think they were headquartered in Chicago at the time. And Bressert was on the board. I think Proctor was on the board for a while. And Peter was involved with that as well. Well, anyway, after taking that course, that's where I got involved with the cycle stuff. So I was able to use all of that material. And like I said, it worked like a champ, identified the top. It was published in Stocks, Commodities Magazine. Well, anyway, I sent the material to Peter Lites. Don't remember how or why? I don't remember the whole story about it. I sent it to Peter Lites, and he said that he saw it, and he thought, oh boy, here we go. But he read the article and called me, and he was very, very complimentary, and we became friends then. So those guys were like rock stars in my world back in the day, you know? And this was in the mid-eighties, late-eighties, and early-nineties timeframe.JIM GODDARD: 07:06WHAT'S YOUR TRADING PHILOSOPHY? WHAT SET OF PRINCIPLES, BELIEFS, OR EXPERIENCES DRIVE YOUR DECISIONS?Tim Wood: 07:14The same thing I just said; the cycles and Dow theory, and I tend to err on the side of conservatism. I'm not a big risk-taker, and that has its pros and its cons. Sometimes you can be too conservative or too cautious. But then sometimes not. So, you know, everything cuts two ways, but I believe in the theories that I have they work. I guess the one issue is that all of the old historians and old school technicians have paid these prices. It seems like anybody who's known the most about the market has been more cautious, and being in this bubble environment, you know, that's, that's been somewhat costly because nobody that I know imagined that we would see this thing blown up into the bubble that it has been blown up into. And so, in that respect, I think many of the old school technicians have underestimated the magnitude that the bubble could be blown into, but it is a disastrous bubble.JIM GODDARD: 08:31HOW IMPORTANT IS IT TO HAVE AN INVESTMENT PHILOSOPHY?Tim Wood: 08:34Well, I think you have to have a discipline of proven discipline that works, and you have to stick to it because I think one of the problems that people get into is that if they skip around from discipline to discipline if you abandon something. Let's say you have something that works. As an example that you know is pretty successful, 70% of the time, well, that's probably a winning strategy. Still, if you abandon it whenever you hit a bad streak, at 30%, by the time you go onto the next strategy. You keep looking, you know, I think that's a recipe for disaster rather than making yourself an expert and understanding a given philosophy. And for me, that's cycles and statistical analysis. Because like I said, once you understand it, the cycles, it's basically just trend quantification. So you can wrap statistics around that and develop expectations. And so it is a statistic and, cycles, contract, they expand, but on balance you know, there are averages, there are norms. And I think that's where the answer lies.Jim Goddard: 09:42We'll have more with Tim wood right after this.TheTechnicalTraders: 09:45Do you want to make money by copying the same trades a professional is taking? Well, now you can. Since 1997, Chris Vermeulen has focused on building technology to help himself become more profitable. He now shares his swing trading and passive investing signal with others. Like him, you let these technically proven strategies protect your assets while profiting from the biggest trends. No matter if the market is rising or falling. Visit www.technicaltraders.com to learn more.JIM GODDARD: 10:14WELCOME BACK. WE'RE SPEAKING WITH TIM "CYCLES MAN" WOOD. TIM, HOW DID YOU GET, I DON'T WANT TO USE THE TERM NICKNAME, BUT IT IS KIND OF BECAUSE WE USE IT ALL THE TIME, THE TERM "CYCLES MAN," TIM "CYCLES MAN" WOOD. WHERE DID THAT COME FROM?Tim Wood: 10:29Well, there was a guy at the time, when I published the article in Stocks and Commodities magazine, you have to go back to the year 2000, 2001, when the Internet was new. My first memory of the Internet was 96, 97. And I mean, it was kind of a taboo thing. There wasn't a lot of stuff on the Internet, and anyway, I needed a name, and there was a guy on Fox News at the time. Fox business news, or maybe it was CNBC, I don't even know, but he said he called himself the Chart Man. And I remember I'd see those things from him, and so I literally just pulled it out of the air, Cycles Man. And I just kind of ran with it and had that name ever since.JIM GODDARD: 11:17WHAT'S YOUR FAVORITE TYPE OF ANALYSIS OR INDICATOR YOU FIND THAT HELPS YOU TIME YOUR TRADES OR INVESTMENTS?Tim Wood: 11:24The cycles analysis. Definitely the cycles analysis and some of the proprietary indicators that I've developed over time. I mean, as I said, you have a statistical window where you're looking for a low or a high or whatever the case may be. So you have that target if you will. And then you have indicators that you wrap around price to help you zero in on when that actual cycle of whatever degree has top or bottomed. And so that's it, cycles and the indicators that I use.JIM GODDARD: 12:01WHAT'S SOMETHING YOU WISH YOU WOULD'VE KNOWN BEFORE YOU STARTED TRADING AND INVESTING.Tim Wood: 12:07That's a tough question. I would say the foresight to have imagined; I go back to this bubble that we're in, that it could have been blown into the bubble that it has, maybe that's just unimaginable when you look back. This is something they've been fighting literally for 20 years and done a magnificent job holding things together. But to elaborate on that just a minute. So someone understands what I'm saying. When you look at, you know, volume characteristics of the market, job participation and other economic measures, the real economy, and for people who are old enough to really remember it, I think they'll agree with this. Still, it sort of all peaked with the Dot Com bubble.Tim Wood: 13:00And then, as we rolled over into the 2002 low, we saw the market and economy were trying to deflate. It was trying to breathe. It had been in a tremendous run; like I said, we'd run up into with Dot Com era, and the telecom was on fire. Then I was working in the telecom business, and the economy had really moved into a top at that time. But then coming out of the 02 low, where it started was, you know, that's when I think the Fed really stepped into the market and started taking a more hands-on approach, trying to hold things, bridge the gap, as they say, and what they did was they created, if you think back, coming out of the 02 low, in my world. They pushed that advance into the '07 top. That was the longest advancing four-year cycle in history.Tim Wood: 13:52And what happened as a result of that? They created the worst financial crisis since the great depression. Not my words, Google it; that's what they called it, the decline into the '09 low. And that was a direct result of, I mean, the market was trying to top, and they wouldn't let it breathe. It just needed to breathe. It needed to unravel a little bit. We needed to skip along the bottom and, you know, flush things out and let it correct. Well, that was never really allowed to happen. And then the market was pushed into that bubble top at that time. And it created the backlash, as was the decline into the '09 low. Well, then, coming out of that low, what has happened? What did they do? More of the same on steroids, as they say.Tim Wood: 14:36We push up into the 2020 top, and then we start to try to unravel again. And then here we go with all the stimulus and so having not underestimating the power of the Fed and their ability to push this into the largest bubble ever, I think has caused a lot of technicians in the sense that they just simply, it was unimaginable that we would be in this position. Now that does not change the fact that I believe that we are in, as a matter of fact, I'm convinced without a shadow of a doubt, we sit at the top of the biggest bubble financial bubble in history, and it has to be dealt with, it will be dealt with it has to unwind. And it will; I think the question is how well can they continue to hold it? And then the consequences, who knows, but I think we face a tremendous unwinding with this bubble, absolutely.JIM GODDARD: 15:41WHAT'S THE BEST ADVICE YOU EVER RECEIVED?Tim Wood: 15:45From a trading perspective? One thing that comes to mind that Richard Russell told me, and he said, it was about your discipline and perseverance. Stick to your discipline and perseverance.JIM GODDARD: 16:09WHAT'S THE BEST CALL YOU EVER MADE THAT OTHER PEOPLE THOUGHT WASN'T THE RIGHT CALL, OR THEY MADE FUN OF YOU OR DENIGRATED IT IN SOME WAY.Tim Wood: 16:19Actually, I have several of those. The top in 2000, you know, anytime you stick yourself out in the public, you're subject to criticism. But I remember making the call in 2000 saying we were going to go below the 98, 4-year cycle low. And I think that was right at a 40% decline. I don't remember the numbers now, but 39, 40%, whatever on the Dow. And I remember at the time people when the article came out, and it was like I said, the Internet was young and people, you know, they threw rocks at me and thought I was crazy, but it happened. And like I said, that kicked off Cycle's News and Views. The next great call, I don't know which one was better, but as they advanced into the '07 top took form, I kept saying, it's stretched, it's stretched, it's a bubble, it's a bubble. They're pushing; it's a four-year top. And I didn't have an indicator. I didn't have a cell.Tim Wood: 17:19I remember to the day I remember where I was standing getting phone calls from people asking me in August of '07, is this it? Is it top? And I'm like, no, we need one more push because the structure wasn't right. And we declined into the summer there and then made one more push up late summer and then made one more push up in October, and then boom, it clicked. It had the Dow theory, and the primary bearish trend changed. The cyclical structure fell in place. And I had said then that we would go below the 2002 low, and we did. So that was a great call.Tim Wood: 17:51And then another one was, and this call was made on the air on a talk show and on my own website and some podcasts the week after the tippy top. The following week, I saw what I needed to see and made the call-in oil. Everybody was talking about peak oil, peak oil, peak oil. And I said, no. I had statistics that said we would go back below the previous three-year cycle in the CRB, which meant we would just see a collapse. So that was an excellent, excellent call. So there's a number of them.Tim Wood: 18:31In housing, I got the housing call right. In 2000, I remember talking to a builder. We lived in the neighborhood, we just moved, and the builder came in, and he was kind of a macho arrogant guy. And I remember in 2006; I'd already seen the signs, late 2005, early 2006, the signs that housing had peaked. I remember sitting in a board meeting with him and trying to, you know, kind of warn him about it, talk to him about it. He wanted to be smart. He said, well, what do you know about housing? And I said I don't know anything about housing, other than I can read a chart. I told him what I saw coming. And, of course, he thought I was an idiot. And they ended up abandoning the neighborhood as a builder a few years later. So that was actually a pretty good call; it made me feel good.JIM GODDARD: 19:23TIM, YOU USED TO DO A LOT OF FINANCIAL TELEVISION SHOWS, AND ALL OF A SUDDEN, THAT DRIED UP. IS THAT BECAUSE, AS WE HEARD IN THAT FAMOUS MOVIE, YOU CAN'T HANDLE THE TRUTH.Tim Wood: 19:37I think there was a lot of that. I don't know what shut that down. You know, Peter Lites, Robert Proctor, a lot of us guys. I think a lot of that is just a function of the bubble environment. I don't know all the moving parts; you make great calls, it's a thankless business. You make fantastic calls like those over the years. And then you get into an environment where the market is a number of things. There're so many so-called experts out there now on the Internet, and the Internet's matured. People making YouTubes, and everybody can put stuff out for free. And, as a rule, you get what you pay for. And so I think that's probably a factor. Another factor is when you sit, warn from a long-term historical perspective, and talk about the bubble that it's been and the bubble that it is and how crazy the environment is, you know, people tend to dismiss that over time.Tim Wood: 20:34It becomes the new norm to see this bubble environment. It's normal for commodity prices to be where they are. It's normal for housing prices to be where they're back to; and it's normal to see the market. And in reality, that's not normal; it's an extreme. But people don't recognize the extreme because we've been in this environment for so long. So I think it's also a function of falling out of favor because people don't understand. I think that reckoning will come where people will come to understand. And then, of course, I know what they'll say. Well, a clock is right twice a day. But, I think it's a number of those things. But I think primarily, and I'm guessing that I would say that between, the maturity of the Internet and so many people out there putting out stuff, it's hard for people to find what's valid and what's not. I mean, when you're looking for truth, looking for analysis, how do you know what to pick from, or how do you really know?Tim Wood: 21:42And then the other thing, like I said, when you talk about the crazy environment that we're in and people don't see it, they can't see it, then after a while, it just falls on deaf ears. But on that note, let me give you an example of the magnitude of this bubble. I'm saying this from memory because I don't have the math in front of me, but everybody that's market people, I say everybody, most market people are familiar with the south sea bubble. I did some math, it's probably been close to a year ago now, but I was looking at the size and scope of the south sea bubble. And what it was, the south sea bubble was a dead expansion scheme. It was a partnership between private industry and England to the English government for exclusive trading rights in the south seas; they were going to basically monetize their debt and take on their debt. England could continue to expand the debt. It's all about expanding the debt like Richard Russell used to say, in-flight or die. And so they did, they did that.Tim Wood: 22:51And I saw an estimate; I think it was between 30 and 50 million pounds, I believe was the size of the debt at that time. So to put that in perspective, I had some 1904 encyclopedias, and I looked up to the south sea bubble. Sure enough, it was in there. And as a 1904 dollar, it was estimated to have been. And I don't remember the numbers, but it was like 150 million or something like that, whatever the case was. That's irrelevant anyway, whatever the number was, I just don't remember on the fly, but then I found a conversion, you know, just Googled, okay, 1904 dollars equals whatever, and found out what the dollar equivalent would be worth today.Tim Wood: 23:35And it was like the point being is that the bubble environment we're in today is based on the debt. It's an asset bubble, but it's been debt-driven. The debt bubble today, looking at the US government's debt. That's on the balance sheet; you can go to the Fed site and Google the number. And it's like, I don't know, Reddit 30 trillion, it was over 6,000 times that of the south sea bubble. So that's what I'm saying when you're in an extreme environment for an extended period of time, you don't even recognize the extremity of the environment that you're in because it's normal. That's what we face. This has to be unwind and be dealt with. And that's what the Fed has been fighting and trying to hold, and I understand that. And on the one hand, you're trying to prevent it, but at the same time, the prevention is making it even worse. But as they say, if you can kick that can down the road and let it happen later, I guess that's what you do. And so I get it. But anyway, I don't remember the question now, but the bubble is enormous.JIM GODDARD: 24:52NOW FOR YOUNG TRADERS. MANY OF THEM HAVE NEVER EXPERIENCED A RECESSION. THERE HASN'T BEEN AN OFFICIAL ONE SINCE 2008. IF THINGS GO BAD, DO YOU THINK THEY WOULD PANIC? WOULD THEY LOOK AT THE PAST AND SEE WHAT YOU SHOULD DO? OR DO THEY REALLY BELIEVE THE FED HAS YOUR BACK? NOTHING BAD CAN GO WRONG.Tim Wood: 25:11I think people have been trained that the Fed has your back so much; as I said, since 2002, this has been going on for 20 years, and I think that's ingrained in people. And I guess, I guess my advice to younger people is, it may sound taboo. It may sound old school may sound whatever, you know, square as they used to say in the seventies. But my thinking is that it is a grounding. It's kind of like martial arts. You know, I took traditional martial arts, and it was like basics, basics, basics, basics, basics, basics, basics. It's boring, basics, more basics, but you did it. And all of a sudden, you realize that you have built a foundation that is basically muscle memory. And it's just, you're like, wow, where did this come from? You've programmed your brain, you've built a foundation.Tim Wood: 26:07And so that's the way I see technical analysis and historical technical analysis, more importantly. You know, it's one thing that Peter Lites said to me when he read that article - I'm talking about my article in 2001. He said most people go back. If they go back 20 years, they think they've done some analysis. And this analysis went back to 1896, the inception of the Dow Jones Industrial Average. And so that's why I'm saying that when you have a foundation in history and some statistical basis, statistical analysis wrapped around that history, you can look at a situation like this and recognize it for what it's for. But if you don't have that perspective, there's no way to see it.Jim Goddard: 27:04One of the people I interviewed was Eric Haddock from InsideTrackTrading.com. He said history doesn't repeat, but it often rhymes.Tim Wood: 27:13I would agree with that, absolutely.JIM GODDARD: 27:15I AGREE WITH THAT. SO YOU HAVE SIMILAR CIRCUMSTANCES, BUT THE OUTCOME ISN'T EXACTLY THE SAME, BUT ROUGHLY IT WILL BE. SO IF WE'RE DOING AN ECHO OF HISTORY. WHAT DO YOU THINK IS HAPPENING RIGHT NOW?Tim Wood: 27:28Well, again, I think we're dealing with the unwinding or the eventual unwinding. It's a process. And like I said, it's not a conspiracy. It's not an excuse. It's a fact. Anyone can look at the market fairly and see that there is, I mean, why do they raise interest rates? Why are they lower interest rates? It is a deliberate attempt to hold this thing. And I get that. I mean, if you or I were in their shoes, we'd be doing the same thing because we know the inevitable. So the thing is that there's more of a hands-on approach to the market, so there have been more outside influences, which is, in turn, like I said, it's good and bad. It's good in that it's prevented this; it's bad in the sense it's made it worse. And so I lost my train of thought on what was your question? I was going somewhere with that. What was your question?Jim Goddard: 28:29Well, it's just that we call them youngsters because we're all old guys, but they haven't experienced this for 12 years. We haven't had a recession, an official one.Tim Wood: 28:39Exactly. And so my point was they don't have that perspective. I lost my train of thought for a second, but yes, that's exactly right.JIM GODDARD: 28:46DO YOU HAVE ANY ADVICE FOR THEM? IS THERE READING THEY CAN DO? SOME RESEARCH THAT HISTORY HAS A TENDENCY TO REPEAT ITSELF.Tim Wood: 28:57I think everybody's got to find their own niche, but cycles analysis, Walter Bressert's material, is no longer available. He was much older than me, and he died. Richard Russell wrote one or two little basic books on Dow theory, and I guess that's a start, but I didn't really learn Dow theory until I got those original writings. Unfortunately, it's kind of like finding a traditional martial arts school. To find these original writings, this old traditional technical analysis is kind of hard, but I think that's the direction people need to go. And I'm not talking about a book where you learn what a head and shoulders pattern is and a rising wedge and all this kind of thing. I'm saying some real technical analysis that you can wrap some statistics and history around. And that's hard to find these days because it's just kind of a lost art.JIM GODDARD: 30:07TIM, BEFORE WE GO, IS THERE ANY TOPIC OR FINANCIAL OR BUSINESS PRACTICE THAT YOU'RE REALLY PASSIONATE ABOUT?Tim Wood: 30:14Well, I love the markets. I absolutely love the markets, as frustrating as they can be. You know, the analysis, that's what I do; it's who I am; it's who I become. And I love the markets, but at the same time, when you see something like the bubble environment that we're in and knowing that we're in that environment and seeing it just stretch and stretch and stretch, that can also be frustrating. But no, other than that, that's about it.Jim Goddard: 30:46Tim, thank you so much for being on The Technical Traders podcast.Tim Wood: 30:51Thank you very much.Jim Goddard: 30:52My guest has been Tim "Cycles Man" Wood, editor of Cycles News and Views on Cyclesman.com. He was speaking to us from Gulf shores, Alabama. I'm Jim Goddard. Thanks for joining us this week on the Technical Traders podcast. If you found value in our show, subscribe and give us a rating or share it with a friend; that would be greatly appreciated as well. Thetechnicaltraders.com your stores for technically proven strategies to make more money with less risk. So you can take your trading to the next level comments made on the Technical Traders podcast or an expression of opinion only and should not be construed as investment advice or recommendations to buy or sell any financial instrument. This information is for general information and educational purposes. Guests on the show are not compensated for their participation. To view our full disclaimer, please visit our website at www.thetechnicaltraders.com.TIM 'CYCLES MAN' WOOD PODCAST VIDEOhttps://youtu.be/s9JJqnRuwVA
Where Is Gold Going From Here?

Where Is Gold Going From Here?

Chris Vermeulen Chris Vermeulen 02.06.2022 17:12
After briefly reaching highs above $2000, Gold has fallen to $1785 (-14%) following the deep selling in the US major indexes throughout most of April & May 2022.Interpretation Of The Current Consolidation In GoldMy team and I see the recent lows in Gold as similar to the April/May 2009 consolidation after the Global Financial Crisis. Also similar to the January 2013 consolidation before an extended -34% price decline took place – ending in December 2015.The primary difference between now and then is that the US Federal Reserve is currently initiating a new round of Quantitative Tightening (QT), raising rates, while battling Inflation. In both the previous examples, the US Federal Reserve was moving aggressively into Quantitative Easing, attempting to aid in the recovery of the US & the global economy.It seems to me, that the underlying factors driving the price of Gold have drastically changed. All it would take for Gold to break into a new trend, up or down, would be to see some new catalyst or contagion event come to life.Gold Weekly ChartGold Establishes An New Momentum Base While USD Rallied +15.75%The strength of Gold over the past 15+ months while combating the strength of the US Dollar has been impressive. I’ve shared my thoughts in many interviews over the past year suggesting Gold was in a consolidation range (moving downward) while still holding up impressively as the US Dollar continued to skyrocket higher.Trends in the US Dollar and Gold, I believe, are directly related to underlying global economic factors. These factors are prompting a shift away from traditional Growth sectors and pushing traders to reconsider the safety of precious metals. Another factor is that the US Federal Reserve has been actively telegraphing rate increases for nearly 12+ months as Inflation started to surge in early 2021.I see the extended consolidation in Gold over the past 15+ months, above $1700, as a new momentum base for the price – similar to what happened in 2009 and 2013. The next question is “will it break upward or downward?”.As time progresses, we’ll have to see how the US Dollar and Gold react to the Long-Term Resistance area I’ve highlighted on the chart above.Plan A vs. Plan B For Gold Throughout 2022I like to consider trading to take high probability opportunities within confirmed/defined trends. The smartest move for Gold traders right now is to wait for any future price confirmation before trying to guess which direction Gold will move.Plan APlan BWatch the $1775 level as critical supportWatch the $1735 level as critical supportConsider the current bullish price trend as Neutralif any daily close breaks below $1775Consider the current bullish trend as continued Bearish if any daily close breaks below $1680If the price recovers above $1775 after moving lower,adjust to a potential bullish price trend for gold.If the price breaks to below $1735, do not attempt to 'bottom-pick'.These Plan A and Plan B constructs are how I think of trading in general.  It is not worth trying to guess where the price may go or if I’m missing out on some opportunity.  Risking 5% or 10% of my capital on a guess is just not worth it to me. I could be wrong in my guess multiple times trying to chase an emotional belief that a bottom or top is setting up. This, in turn, could destroy 25% to 40% of my trading capital in the process.If I’m patient and wait for the market price to confirm a trend, then I’ll be able to execute a high probability trade with limited risk.Falling Back To Long-Term Technical Analysis As A GuideI created this chart in early 2021 highlighting my cycle expectations for Gold over the next 3+ years. Throughout most of 2021 and into early 2022, I expected Gold to trend downward – reaching a low price near $1625 sometime near February-May 2022. The recent low in Gold on May 16, 2022, was $1785. Prior to that, Gold reached a low of $1676.70 on March 8, 2021.Although my $1625 level has not been reached yet, I am eagerly waiting for the next phase of my prediction – the potential rally wave that should start in June 2022 or soon after. This next rally phase may target $2000~2050, then stall for many months before continuing to trend higher, targeting $2400+.Patience is the key to all trading and long-term success. Knowing there are opportunities for very short-term trades every day is fantastic if that is your style. I prefer to trade longer-term swing trades, protecting my capital and trading the most efficient setups.In my opinion, the best opportunity for Gold traders is to wait for price confirmation of my predicted cycles. Once this happens, then look for opportunities when we know Gold has exited this consolidation phase.WHAT STRATEGIES CAN HELP YOU NAVIGATE THE CURRENT MARKET TRENDS?Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.Historically, bonds have served as one of these safe-havens. This is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there? How can they be deployed in a bond replacement strategy?Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies which include a real estate ETF. We can help you protect and grow your wealth in any type of market condition. Click the following link to learn more: www.TheTechnicalTraders.com
Lessons Learned From A Trading Profit Made Shorting Stocks

Lessons Learned From A Trading Profit Made Shorting Stocks

Chris Vermeulen Chris Vermeulen 31.05.2022 17:09
Jesse Lauriston Livermore (July 26, 1877 – November 28, 1940) was an American stock trader who made a $100 million trading profit by shorting stocks in the great crash of 1929. He is considered a pioneer of day trading and was the basis for the main character of the best-selling trader’s book by Edwin Lefevre called Reminiscences of a Stock Operator (www.Amazon.com).Jesse Livermore stated: “When trading stocks I always look for favored groups to get weaker and collapse.” “This usually meant a correction was coming in the overall market.”This is how Livermore called the market turn in 1907, and 1929, as the market leaders rolled over first.Here are some additional Livermore quotes that are relevant to our current market environment:Stocks are manipulated to their highest prices possible and then sold (distributed) to the public on the way down by selling the stock into the rallies.”“The big money was not in the individual fluctuations but in the main movements—that is, not in reading the tape but in sizing up the entire market and its trend.”“The speculator who insists on trying to profit from daily minor movements will never be in a position to take advantage of the next important change market-wise when it occurs.”“After establishing my position all I had to do thereafter was just sit tight and let the market run its course.”“Cash was, is, and always will be king.” “Always have cash in reserve.” “Often money that is just sitting can later be moved into the right situation at the right time and make a vast fortune.”“There are times when a trader must be out of the market and waiting on the sidelines.”Livermore also correctly stated that “What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly built into human nature, that always gets in the way of human intelligence.”We don’t have to look too far to find favored stocks whose prices have completely collapsed. But to keep things reasonable let’s just look at Apple, a stock that was highly favored that has recently been experiencing weakness.APPLE DROPPED -27.36%Apple (NASDAQ: AAPL), is a popular American multinational technology company that specializes in consumer electronics, software, and online services. Interesting side note: Apple now has cash and marketable securities that exceed $200 billion.Apple was one of the most favored stocks in 2020-2021. It rallied from a March 2020 $53 low all the way up to its January 2022 $183 high. It then experienced a three-month sell-off where it gave up about --18.04%. However, it immediately followed that downswing with an impressive $30 rally of +20%. But that rally turned out to be nothing more than distribution at the top as the stock then plummeted by $50 per share -26.42% as it breached $132.APPLE INC • AAPL • NASDAQ • DAILY THE ANATOMY OF A TRADE USING PRICE - APPLE STOCK EXAMPLEWhen using price to trade, it is a good idea to measure the price swings and record their movements: $ amount, a percentage amount, number of bars, and number of days. We then utilize this information to let the market tell us what to do and when we should do it.The following examples will act as a price guide to walk us through the process of measuring, using, and benefiting from the knowledge we glean from looking closer at the price swing action:APPLE INC • AAPL • NASDAQ • 4-HOUR • DOWNSWING This downswing was from September-October 2021: it measured -$19.00, -12.06%, 38-bars, and 27-days.APPLE INC • AAPL • NASDAQ • 4-HOUR • UPSWINGThis upswing was from October 2021 – to January 2022: it measured +$44.66, +32.28%, 127 bars, and 91-days. It was more than two times greater in price and three-times greater in time than the previous downswing.APPLE INC • AAPL • NASDAQ • 4-HOUR • DOWNSWING This downswing was from January 2022 – to March 2022: it measured -$33.04, -18.04%, 94 bars, and 68 days. Its percentage of -18.04% exceeded the previous downswing of -12.06%. This increase in percentage is a big red flag as the price is telling us that the trend is changing.APPLE INC • AAPL • NASDAQ • 4-HOUR • UPSWINGThis upswing was from March 14, 2022 – to March 29, 2022: it measured +$29.62, +19.73%, 23 bars, and 15 days. This upswing gave us the perfect opportunity to liquidate our long position or at the very least downsize our position.APPLE INC • AAPL • NASDAQ • 4-HOUR • DOWNSWINGThis downswing was from March 2022 – to May 2022: it measured -$47.50, -26.39%, 73 bars, and 51 days. Its percentage of -26.39% exceeds both previous downswings of -18.04% and -12.06%. This increase in percentage confirms that we are now in a downtrend.As the market is currently working on an upswing, we should keep in mind that the previous upswing was +$29.62 or +19.73%. Apple is giving us another opportunity to liquidate any remaining holdings anywhere from our current price level to over $160.The Sign That The Trend For Apple Has ChangedIt should also be noted that the 2020 Covid downswing from January 29, 2020 – to March 23, 2020, was -$29.50, -35.85%, 74 bars, and 53 days.The current 2022 downswing from the $183 peak to the $132.50 low is -$50.68, -27.67%, 193 bars, and 139 days.The 2022 downswing exceeds the 2020 Covid downswing in both price and time: -$50.68 vs -$29.50, and 139 days vs 53 days. This is a major red flag signal that the trend in Apple has changed.Let us remember Jesse Livermore stated: “When trading stocks I always look for favored groups to get weaker and collapse.” “This usually meant a correction was coming in the overall market.”This is how Livermore called the market turn in 1907, and 1929, as the market leaders rolled over first.LEARN more about price action FROM OUR TEAM OF SEASONED TradersIn today's market environment, it's imperative to assess your trading plan, portfolio holdings, and cash reserves. Experienced traders know what their downside risk is and adapt as necessary. Successful traders manage risk by utilizing stop-loss orders, rebalancing existing positions, reducing portfolio holdings, liquidating investments, and moving into cash.Managing risk and expectations for both investments in real estate and the stock market is the key for long-term success. Do this, and you can avoid the rollercoaster ride of doing nothing to protect your investments.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recoverA 50% loss requires a 100% gain to recoverA 60% loss requires an even more daunting 150% gain to simply return to break even.Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or months, while a 50% drawdown may take years to recover. Depending on a trader's age, they may not have the time to wait on the recovery or the patience. Therefore, successful traders know it's critical to keep their drawdowns within reason. Most of them learned this principle the hard way.HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Provide above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies which include a real estate ETF. We can help you protect and grow your wealth in any type of market condition. Click the following link to learn more: www.TheTechnicalTraders.com
Managing Emotions - How FOMO Affects Your Trading And Your Life

Managing Emotions - How FOMO Affects Your Trading And Your Life

Chris Vermeulen Chris Vermeulen 27.05.2022 16:24
Managing emotions you say? Often we hear that we are supposed to trade without emotion as if we’re robots.   That’s a big fat myth. “If you can keep your head when all about you are losing theirs….” From "If,” by Rudyard KiplingWe’re in a challenging market.  Here are some thoughts on how to not just survive but thrive as we work through a significant peaking phase of the economic and market cycles. Know ThyselfIt’s critically important that we understand ourselves and what trading or investing style we’re best suited to.  We’re all different, and approaches to trading are not a one size fits all proposition.  Some people are suited to long-term investing, while others are better suited for the hyper-fast action of day trading.  Or something in between or a combination thereof.  Many traders and investors do not understand and accept their own biases, strengths, and weaknesses. Often they invest in the stock market as the trader they want to be rather than the trader they actually are. They may fail if they’re playing at the wrong place on the trading spectrum.If you’re a long-term investor, there’s nothing wrong with sitting on the sidelines in cash or mostly in cash.  A bullish trend will re-emerge eventually.  Relax.  Enjoy the pause.  Preserve capital.  Have cash and a shopping list prepared for longer-term holdings as conditions improve.  If you’re a daytrader, market volatility gives opportunities.  But you better be very good at what is a challenging game if you don’t want to blow up your account.   Shorter timeframes can be the most difficult to be consistently profitable. If you find that you can’t sleep at night, you’re exposing yourself to too much risk.  Get smaller if you need to and wait for more favorable conditions.  Pick strategies and sizes that can’t hurt you too badly.  You don’t want to have a huge setback and have to wait ten or twenty years or more to recover.Making Sense of the Information DelugeThe “Information Age” that was so heralded as I grew up, has become a raging “Mis-Information Age.”   The analogy of trying to drink from a firehose seems inadequate.   We’re in more of an information tornado these days.  We can easily let ourselves be inundated from all directions with too much information, prolific misinformation, and often conflicting and useless opinions.  How do we make sense of it all? What are we looking for? We’re, of course, looking for precious signals amongst the noise.  Those insights can help us to make good decisions consistently.   Such signals are there, but they can easily be drowned out and lost.I can’t consistently guess what the Fed will do, where money will flow, or what some talking head on TV or social media says.  Opinions, including my own, are not necessarily reliable.  But I can study and follow the visible signs of money flow in the charts.Here is where Technical Analysis keeps me on track.  Price and volume do not lie.  Support, resistance, trendlines, and other indicators give us essential clues to what is happening versus what is “supposed” to happen.   It’s critical that we not just see reality but also accept it and adapt our plans appropriately.Have a Trading PlanA well-thought-out plan is a roadmap that can keep us sane, solvent, and making progress.A good plan starts with a clear and realistic objective.  For most, that is long-term financial security and the preservation and growth of our resources.  For some, the focus is more on immediate income.The plan should detail how much and what kind of risk you’ll take on and how you’ll manage that in a way that can’t take you out of the game.Be willing to revise and improve that plan.  But be aware of changing your plan willy-nilly.  Don’t be a “holy grail” seeker constantly changing strategies in search of the perfect one.  It doesn’t exist. If we think we know it all, that’s a warning sign of missteps to come.  The words “I know that” can be very dangerous and keep us closed to further learning.  We should always be students.  We’re better off if we’re constantly learning, improving our approach, and executing as per our plans. Understand the role of emotions There’s a model of how the human brain works, with the left brain being analytical and the right brain being emotional.   The left brain tries to make logical sense of things through the dissection of data and rational analysis and is easily occupied with numbers and charts.If only it were that simple.The right brain is the source of emotional responses.  Try as we may, we can’t just shut that off. Many studies show that our decisions are greatly influenced by the right emotional brain, mostly made unconsciously.Rather than trying to suppress our emotions, I find it more helpful to observe and acknowledge them.  For example, when I’m feeling FOMO, it’s better to recognize what I’m feeling and maintain awareness of how that may affect my decision-making.  That works a lot better than pretending that I’m immune to FOMO altogether.  Take a Step BackIt’s essential to keep the big picture in mind.   Nobody likes to hear, “It’s only money,” and I don’t like saying it.  Money is important.  It’s the fungible resource that allows us to be more of who we are – for better or worse.   Money can provide abundance and financial security for ourselves and our loved ones.  It enables a good quality of life and the means to be generous.   Intrinsically, money is neither good nor evil.  How we obtain it and what we do with it is what matters.    Pursuing and preserving money is a noble cause for the overwhelming majority of us with noble intentions.   It is okay – actually imperative -- for us to do everything we can to be skilled at getting it and keeping it. We can’t forget to take care of our own mental and physical health.  We need to take care of ourselves to be here for those we care about.   Don’t neglect to spend quality time with friends and family.  For all of its usefulness, no amount of money can replace our health and loved ones.   Never forget to keep those ends in mind.  They are our raison d'être.ConclusionAfter many years of buying and selling options using a wide variety of strategies ranging from the simple to complex, I find that a simple strategy, like selling puts, can be one of the easiest to manage and most reliable for generating regular profits.  Don’t make it more complicated than it needs to be!Sign up for my free trading newsletter so you don’t miss the next opportunity! want To Learn More About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   Our Options Trading Specialist, Brian Benson, has been on fire. Of the last 24 trades he has made, 20 of them have finished in the money - that's a 77% win rate!If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. Brian, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
Let Price Action Show You What To Do In An Approaching Bear Market

Let Price Action Show You What To Do In An Approaching Bear Market

Chris Vermeulen Chris Vermeulen 24.05.2022 21:46
Traders have access to an overwhelming amount of market indicators. But does a trader really need any of these indicators to be successful at trading? At the end of the day, the price determines our loss or profit. Therefore, we should focus our research on price action rather than time lagging indicators or market fundamentals.Following and trading price simply means that the market tells the trader what to do and not the other way around. Being one with price deposits money into a trader's account. Whereas fighting price withdraws money out of a trader's account. The price action is “Always” right as it does not care what a trader’s opinion or bias is.Bull markets can go on for many years, but bear markets happen unexpectedly and can quickly destroy a trader’s profits or even their account. Bear markets move with a greater velocity than bull markets and they are accompanied by high volatility due to investor emotions (Fear, Greed, & Hope).The simple definition of a bear market is a drop in price of -20% or greater from its recent maximum peak. Therefore, once a market drops -by 20% or greater, it is a bear market.SUDDEN BIG price action UP DAYS CAUSE “FOMO”Bear markets behave differently than bull markets in that bear markets are known for having sharp rallies. These rallies may last from 1-2 days to a few weeks. When these rallies occur, they tend to be an irresistible trap for many investors who are experiencing the fear of missing out “FOMO” syndrome. Institutions and professionals use “FOMO” to liquidate existing holdings and/or short the market.History has shown that some of the greatest stock market percentage gain days have occurred during bear market periods. The following table is from Wikipedia and shows us that most if not all the extreme daily percentage gains or losses occurred within bear market time periods.LIST OF LARGEST DAILY CHANGES IN THE S&P 500 INDEXhttps://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_S%26P_500_Index“SUCCESSFUL INVESTING IS A BATTLE FOR FINANCIAL SURVIVAL” – G.M. LOEBVolatility generally has ruined many investors and traders. It’s one thing to trade a stock that experiences a 1-3% daily move. Trading in a stock, however, that is swinging 5-10% or has a sudden earnings surprise gap down of -20% is dangerous as it has the potential and high probability of eventually bankrupting most trading accounts.Gerald Martin Loeb (July 24, 1899 – April 13, 1974) was a founding partner of the E.F. Hutton & Co. brokerage firm, acquired by Shearson Lehman Brothers in 1987 for almost $1 billion. He was a renowned wall street trader and the author of The Battle for Investment Survival (www.Amazon.com).Loeb stated: “When I started investing about 1921, it seemed a peaceful enough occupation. By 1943, I started calling it a “Battle”, though a lot of people might have used the term much earlier from 1929 to 1932. But now in 1957, it seems to be a “War”.Here are some relevant quotes for our current market environment from Loeb’s book:“I favor doing one’s major forecasting from the tape or, to put it another way, from the price movement.” “This to me is elemental and necessary to success.”“The preservation of capital should be looked upon as something that normally costs a price.”“It is far better to let cash lie idle than to buy just to “keep invested” or for “income”.”“Losses must always be cut. They must be cut quickly, long before they become of any financial consequence.”“The lessons of the 1923 stock market break taught me what I had to know to not get caught in the crash of 1929 to 1932.”“There have been at least 8 periods since the turn of the century (1000) when the stock market, as measured by the Dow Jones Industrial Average, has dropped as much as 40%.” “It has happened before and of course will happen again.”Let’s review and study some current markets that are now in a bear market.SPY S&P 500 -20.58%SPY S&P 500 ETF – The SPY has experienced a sharp -18.04% sell-off during the last 51-days. Even though the SPY has not closed below the dreaded -20% peak-to-trough level, price action has violated this level intraday.If or when we are fortunate enough to get a sharp multi-day rally back up, we should be looking to liquidate any stocks that we are still holding. Depending upon the rally magnitude a trader may want to consider buying an inverse ETF of the SPY such as SH ProShares Short S&P 500 Inverse ETF (-1x).Market volatility remains high, and history has shown it may expand considerably. For most traders, the best advice is to go to cash and ride out this storm from the sideline. In case you think this statement seems extreme please review the accompanying stock charts.SPDR S&P 500 ETF TRUST • SPY • ARCA • 4-HOUR DEERE & COMPANY -29.01%Deere (NYSE: DE), is a major American multinational manufacturer of farm machinery and industrial equipment.Deere's price action, after taking out a 10-month triple top and making a new all-time high, plunged by -29.19% in just 30+ days. This is the worst drop in 14-years as Deere cited supply chain snags, rising inflation, and unfavorable currency translation headwinds.DEERE & COMPANY • DE • NYSE • 4-HOUR TARGET CORPORATION -43.42%Target (NYSE: TGT), is an American department store chain and the eighth largest retailer in the United States.  Target's price action has dropped about -40% in the last 30-days including a whopping -25% a single day. Target had missed its earnings forecast by -$1.50 citing inflation, and supply chain factors. This was the biggest loss in Target’s stock price since 1987.TARGET CORPORATION • TGT • NYSE • 4-HOURROSS STORES INC -47.23%Ross (NYSE: ROST), is an American chain of discount department stores.Ross price action has dropped more than -35% in the last 30-days including an opening price plunge of just shy of -25%. Ross’s massive opening price drop was precipitated by the company’s first-quarter 2022 earnings update where they reported comparable-store sales declined -by 7% due to inflation pressures impacting the retail consumer.   ROSS STORES INC • ROST • NASDAQ • 4-HOUR TESLA INC -48.95%Tesla (NASDAQ: TSLA), is an American automotive and clean energy company that designs and manufactures electric vehicles, battery energy storage from home to grid-scale, solar panels and solar roof tiles, related products, and services.Tesla's price action has dropped more than -44% in the last 45-days.  Only a few months ago Tesla's market cap was over $1 trillion. At its current level, Tesla’s market cap is now $687 billion which represents approximately a $400 billion loss in value from its early January 2022 high.TESLA INC • TSLA • NASDAQ • 4-HOUR LEARN more about price action FROM OUR TEAM OF SEASONED TradersIn today's market environment, it's imperative to assess your trading plan, portfolio holdings, and cash reserves. Experienced traders know what their downside risk is and adapt as necessary. Successful traders manage risk by utilizing stop-loss orders, rebalancing existing positions, reducing portfolio holdings, liquidating investments, and moving into cash.Managing risk and expectations for both investments in real estate and the stock market is the key for long-term success. Do this, and you can avoid the rollercoaster ride of doing nothing to protect your investments.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recoverA 50% loss requires a 100% gain to recoverA 60% loss requires an even more daunting 150% gain to simply return to break even.Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or months, while a 50% drawdown may take years to recover. Depending on a trader's age, they may not have the time to wait on the recovery or the patience. Therefore, successful traders know it's critical to keep their drawdowns within reason. Most of them learned this principle the hard way.HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Provide above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies which include a real estate ETF. We can help you protect and grow your wealth in any type of market condition. Click the following link to learn more: www.TheTechnicalTraders.com
Consumer Pressure - Is There An End In Sight?

Consumer Pressure - Is There An End In Sight?

Chris Vermeulen Chris Vermeulen 19.05.2022 16:56
The US stock market contracted sharply over the past 30+ days while traders attempted to identify the risks associated with the US Fed rate increase. Behind the scenes, consumer pressure is building due to higher costs on nearly everything. Gas, food, everyday items, credit card interest payments - almost everything costs more due to inflation and increasing fuel costs.I remember in 2007-08 when Oil reached levels above $140ppb and the seemingly high costs of everything just before inflation peaked and the markets turned bearish. Back then, much like today, a period of extreme speculation seemed to permeate buyers and investors throughout the US.What broke this trend was the Global Financial Crisis. When the economy started to unravel, excessive credit/debt levels suddenly became unmanageable for nearly everyone. What seemed like a reasonable and manageable amount of debt suddenly became excessive as the US Fed raised the Fed Funds rate from 1.0% to 5.5% - a 450% increase.Recently, we’ve seen the US Federal Reserve raise rates from 0.25% to 1.0%. The Fed may raise rates again soon, trying to tame inflation. I don’t have a crystal ball, but it is not difficult to understand how inflation, higher consumer costs, and increased debt servicing costs are going to panic many consumers, especially after many years of ZIRP and low inflation.Consumers Burdened By Higher Costs & Dwindling IncomesUS consumers are struggling to manage their finances as inflation and higher cost of living expenses continue to eat away their extra cash. Remember, what happens on a consumer/retail level is often the “canary in the coal mine” type of scenario related to broader economic trends.  As consumers shift their spending habits, news travels quickly to other consumers about how the economic conditions are threatening their future.The extreme measures taken when COVID-19 hit in February 2020 helped many consumers survive the extreme economic contraction that took place. Now that we are beyond extreme measures, prices have risen more than 25% over the past 24+ months for almost everything. Consumers are struggling to manage their monthly expenses while still trying to enjoy their lifestyles.A recent article highlighting former Federal Reserve Chairman Ben Bernanke suggests the current US Fed waited too long to address inflation issues. The steps now necessary to tame inflation could be very painful going forward. I see this as a very clear warning for traders/investors to keep their assets very liquid and to reduce their exposure to risk factors.New Mortgage Demand Collapses As Consumers Are Priced Out Of Buying HomesThe sharp decline in mortgage demand is indicative of a collapse in consumer confidence and willingness to believe the economy is going to continue to grow. The warnings from the US Fed, as well as signs that international market conditions are deteriorating quickly, have US consumers on edge – watching for the next shoe to drop (again).(Source: https://www.investing.com/economic-calendar/mortgage-market-index-1427)US Fed On Target For An 1100%+ Rate Increase Over 4+ months – Fastest In Recent HistoryThe US Federal Reserve has continued to suggest further rate increases are necessary to help tame current inflation trends. By many conservative estimates, the US Fed is targeting levels at or above 2.0%. These extremely aggressive targets would represent the fastest and potentially largest rate increase in recent history on a percentage basis.If the US Fed next raises interest rates by 0.50%, that would represent a 1100%+ rate increase in just 90 days.  Rates moving to 2.0% or higher soon, will represent a 1500%+ increase over 4 to 5+ months.(Source: https://fred.stlouisfed.org/series/FEDFUNDS)Extreme Post-COVID Speculative Wave May Have Extreme ConsequencesInflation and many other economic issues are suddenly front-n-center for central banks and consumers across the globe. News that China’s real estate price levels continue to decline may be a very clear sign that China/Asia has peaked ahead of the US and other global markets. We’ve never seen anything like the sharp rally in global real estate price levels except for a brief period from 2004 to 2008 (see chart below).(Source: https://fred.stlouisfed.org/series/MSPUS)That rally ended with the Global Financial Crisis. Home prices declined nearly -20% from the peak in Q1:2007 to the bottom in Q1:2009. If history repeats, US home prices will fall more than -20% to -25% over the next 12+ months.US Equity Market May Not Follow Asset Prices Downward As Economy ShiftsI want to urge you to consider how capital works in a shifting global market environment. Capital is always seeking out the best, most opportunistic, instruments for future gains and protection again risks.  Even when the markets were turning downward in 2009, a bottom set up in the US stock market long before other assets found their bottom in price. This same type of scenario may play out over the next 12 to 24+ months.If my interpretation of market conditions is correct and the US Fed attempts to raise rates further to mitigate inflationary trends, it is likely that various asset classes, ETFs, and individual sectors will unwind risks (as we are now seeing) and will possibly turn into future opportunities. What was overvalued in the past may turn into an incredible opportunity as capital shifts towards sectors/trends showing opportunities for future ROI.The current market trends will present incredible opportunities for traders/investors that are able to protect capital, see and understand the risks and opportunities unfolding, and time their investments/trades properly in the markets.LEARN FROM OUR TEAM OF SEASONED TRADERSIn today's market environment, it's imperative to assess your trading plan, portfolio holdings, and cash reserves. Experienced traders know what their downside risk is and adapt as necessary. Successful traders manage risk by utilizing stop-loss orders, rebalancing existing positions, reducing portfolio holdings, liquidating investments, and moving into cash.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recoverA 50% loss requires a 100% gain to recoverA 60% loss requires an even more daunting 150% gain to simply return to break even.Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or months while a 50% drawdown may take years to recover. Depending on a trader's age, they may not have the time to wait on the recovery or the patience. Therefore, successful traders know it's critical to keep their drawdowns within reason. Most of them learned this principle the hard way.HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Provide above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click the following link to learn more: www.TheTechnicalTraders.com
Following Price One Page At A Time to Understand The Full Story

Following Price One Page At A Time to Understand The Full Story

Chris Vermeulen Chris Vermeulen 16.05.2022 15:59
Following and trading on price can be compared to the reading of a good book. As we read each page, we acquire additional information that may give us a better understanding of the unfolding story.The same is true of the market, as each day is like the reading of another page. The pages of a book make up chapters. These chapters in trading represent bull markets, bear markets, distribution and accumulation, and time frames of high and low volatility.Unfortunately, in trading, we cannot skip to the end of the book to learn how everything turns out. However, as traders, we have learned that studying and remembering the past can pay great dividends.Trading price in its rawest form is simply plotting and studying price without the use of moving averages, stochastics, RSI, or other technical indicators. This simplified but often overlooked methodology can offer everything a trader needs to be successful.NASDAQ 100 LOWER LOWS & LOWER HIGHQQQ - The Nasdaq 100 ETF has been making lower lows and lower highs. A longer-term analysis of price is showing us that the 2022 low is lower than the lowest price that the QQQ had traded in 2021. The QQQ in 2021 had a peak to trough range of 26.03%. So far in 2022, the QQQ has had a peak to trough range of 28.71%.Therefore: Price is showing that QQQ is breaking down and volatility is expanding as it is greater than last year.QQQ • INVESCO QQQ TRUST ETF • NASDAQ • 4-HOUR S&P 500 LOWER LOWS & LOWER HIGHSSPY - The S&P 500 ETF has been making lower lows and lower highs. The SPY in 2022 has had a peak to trough range of 18.74%.Therefore: Price is showing us SPY is breaking down and it appears to have put in a major top with confirmation being a new swing low.SPY • SPDR S&P 500 ETR TRUST • ARCA • 4-HOUR DOW 30 LOWER LOWS & LOWER HIGHSDIA - The Dow Jones Industrials 30 ETF has been making lower lows and lower highs. The DIA in 2022 has had a peak to trough range of 15.02%.Therefore: Price is showing us DIA is breaking down and appears to have put in a major top with confirmation being a new swing low.Note: the DIA is doing better than the QQQ or SPY as money flow is rotating out of previously high-performing stocks and seeking safety in blue-chip lower performing stocks.DIA • SPDR DOW JONES INDUSTRIAL AVERAGE ETF •ARCA • 4-HOUR US DOLLAR HIGHER HIGHS & HIGHER LOWSUUP - The US Dollar ETF has been making higher highs and higher lows. The UUP in 2022 has had a peak to trough range of 10.43%. UUP has also taken out the highest high that it made in 2021.Therefore: The price is showing us UUP has broken out to the upside and is in a bull market with confirmation being a new swing high.According to the 2019 Triennial Central Bank Survey conducted every three years by the Bank of International Settlements: trading in FX markets reached $6.6 trillion per day in April 2019. The BIS report further noted the USD is associated with 88% of all trades, which is $5.8+ trillion in USD daily transactional volume.The US Dollar continues to attract capital from investors all over the world. But this may prove to be a double-edged sword for US stocks. As capital flocks to the USD, this, in turn, hurts US multinationals as they need to convert their weak foreign currency profits back into USD.The USD safe-haven trade may eventually trigger a broad and deep selloff in US stocks. As the USD continues to strengthen, corporate profits for US multinationals will shrink or disappear.UUP • INVESCO DB USD INDEX BULLISH FUND ETF • ARCA • 4-HOUR LEARN FROM OUR TEAM OF SEASONED TRADERSIn today's market environment, it's imperative to assess your trading plan, portfolio holdings, and cash reserves. Experienced traders know what their downside risk is and adapt as necessary. Successful traders manage risk by utilizing stop-loss orders, rebalancing existing positions, reducing portfolio holdings, liquidating investments, and moving into cash.Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:A loss of 10% requires an 11% gain to recoverA 50% loss requires a 100% gain to recoverA 60% loss requires an even more daunting 150% gain to simply return to break even.Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or a few months, while a 50% drawdown may take several years to recover. Depending on a trader's age, they may not have the time to wait on the recovery or the patience. Therefore, successful traders know it's critical to keep their drawdowns within reason, as most of them learned this principle the hard way.HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELYAt TheTechnicalTraders.com, my team and I can do these things:Reduce your FOMO and manage your emotions.Have proven trading strategies for bull and bear markets.Provide quality trades for investing conservatively.Tell you when to take profits and exit trades.Save you time with our research.Provide above-average returns/growth over the long run.Have consistent growth with low volatility/risks.Make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
FUTURE CONTRACT-TRADING OIL WITH USO

FUTURE CONTRACT-TRADING OIL WITH USO

Chris Vermeulen Chris Vermeulen 13.05.2022 15:57
Crude oil, like most commodities, is not priced as a single data point like a stock. Instead, commodities, like oil, trade via futures contracts. A futures contract is an agreement to buy or sell a particular commodity or security at a predetermined price at a specified time in the future. Futures contracts are standardized for quantity and quality specifications to facilitate trading on a futures exchange.Unlike options, futures contracts do not have a time value component in their pricing. Each futures contract is a standalone contract with its own ending date, supply and demand, and market-determined price for the underlying product. Another key difference between options and futures is that while an option gives the holder a right to buy or sell at a specific price, exercising that right is optional. A futures contract is a legal contract for delivering an underlying physical product or, in some cases, a cash equivalent. Futures contract performance is a legally binding agreement and is not optional.ETF vs. Futures ContractsMany products that have futures contracts also have Exchange Traded Funds (ETFs) that attempt to approximate the performance of the underlying product. In the case of West Texas Intermediate (WTI) oil, the ETF with the ticker symbol USO is a popular product. Shares of USO trade on a stock exchange rather than a futures exchange.Owning shares of USO is not the same as owning oil futures contracts. USO invests primarily in crude oil futures and other oil-related contracts and may invest in swap contracts. These investments are collateralized by cash, cash equivalents, and US government debt with two years or less maturities.The objective for USO is for the average daily percentage change in USO’s net asset value (NAV) for any period of 30 successive valuation days to be within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.While the intent of an ETF like USO is to track the price of oil, there will be tracking variation that could be substantial at times.An ETF like USO trades continuously, whereas the futures contracts the fund may hold have expiration dates. To facilitate continuity, a fund like USO will sell futures contracts close to their end date and replace those contracts with new contracts that are longer-dated. The futures contracts that USO owns spread out over a range of contract dates.Why Trade an ETF?ETFs like USO trade like shares of stock. That structure carries less risk than trading futures contracts directly. And you don’t need a futures account to trade an ETF like USO. You can even trade USO in retirement accounts like IRAs.Contango and BackwardationWe can visualize the futures term structure or the forward curve by plotting the prices of a series of futures contracts over time. When longer-dated contracts are trading at a higher price than the front-month contract, that forward curve is in “contango.”  Alternately, when longer-dated contracts are trading at a lower price than the front-month contract, the forward curve is in “backwardation.” The front-month price and the longer-dated price will meet in the middle somewhere as time goes by.  But that does not necessarily mean that oil prices will go down.  Over time, the oil price can go up or down, and the forward curve will adjust.Physical products like oil are often in contango because of the costs associated with storage and transportation.  These costs are assumed to make oil for future delivery more expensive.  But when near-term supply is constrained, the front-month contracts for sooner delivery can be more expensive, and the forward curve will be in backwardation.Roll YieldAn ETF like USO is maintained by rolling contracts forward over a 10-day period. The closer in contracts are sold, and farther dated contacts are purchased to replace them.The gain or loss from completing those rolls creates a roll yield that can be either positive or negative.Positive roll yield exists when a futures market is in backwardation when short-term contracts trade at a higher price than longer-dated contracts. When the market is in contango, the longer-term contracts are more expensive than short-term contracts, and roll yield will be negative.Currently, the oil futures curve is in backwardation. The contract for one year away is trading nearly $25 lower than the front-month contract. That implies that supply is tighter now than expected in the future.Backwardation can provide a bit of a tail-wind to an ETF like USO when the fund managers are selling relatively expensive short-dated contracts and replacing them with lower-price contracts dated further out.ConclusionAfter many years of buying and selling options using a wide variety of strategies ranging from the simple to complex, I find that a simple strategy like selling puts can be one of the easiest to manage and most reliable for generating regular profits.  Don’t make it more complicated than it needs to be!Sign up for my free trading newsletter so you don’t miss the next opportunity! want To Learn More About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   Our Options Specialist, Brian Benson, continues to bring in the money. During the last month, of the 20 trades he has made, 17 of them have been winners!If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
How Are US Dollar (USD), Russel 2000 And CARVANA (CVNA) Performing | Sell And Go To Cash Position Or Hang On By Your Fingernails | Chris Vermeulen

How Are US Dollar (USD), Russel 2000 And CARVANA (CVNA) Performing | Sell And Go To Cash Position Or Hang On By Your Fingernails | Chris Vermeulen

Chris Vermeulen Chris Vermeulen 12.05.2022 17:09
As professional traders, we spend a lot of resources determining whether we are in a bull-up market or a bear-down market. The follow-up to this is our additional efforts in finding the right places to buy or sell in either of these scenarios. As traders, we also have different styles or time frames that we trade. For instance, longer-term trend traders may utilize the daily, weekly, or even monthly charts. In comparison, shorter-term swing traders may utilize the 4-hour or 1-hour charts. Much emphasis and resources are committed to these efforts. However, we have learned that going to cash or having a cash position is just as important, if not more important, than having an actual position in the market. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The beautiful thing about trading is that the trader is in control. We do our research, and then after weighing the evidence, we have the edge in that we have complete flexibility in determining whether we buy, sell, or do nothing. Cash position vs Invested in the Markets Taking a position and making +20, +30, or +40% is great. But going to cash and avoiding a -20, -30, or -40% drawdown is just as important. We could even say that having the ability to go to cash is even more important as it protects our attitude and our health. There is nothing enjoyable about worrying about a position 24-hours a day, 7-days a week. A trader should ask themselves: Is holding onto this position worth the stress and worry about whether the market is going to rally; or will the market give me back a small portion of my hard money losses; or will the bottom completely fall out of the market which will destroy my account? Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Age is a defining factor in answering this question. Depending on our age, do we have the time or the energy to make back losses if the unthinkable happens? Successful traders have learned the hard way that retreating (going to cash) may be the best option as you live to fight another day. CARVANA -91% Carvana CVNA NYSE is the perfect example of the bottom falling out unexpectedly. The rallies were short-lived, ranging from 4-to 14 days. After CVNA had dropped about -25%, it only rallied back about 14-days before it started a steep but steady decline. CVNA is a textbook example of the importance of accepting a loss and going to cash. As technical traders, we exclusively follow price. This too is an important concept to grasp. Following and trading price simply means that the market tells the trader what to do and not the other way around. Being one with price will deposit money into your trading account. Fighting price will withdraw money out of your trading account. The market (or price) does not care what a trader’s opinion or bias is. Managing and protecting our hard-earned capital is our individual responsibility and should be the top priority. CARVANA CO. • CVNA • NYSE • DAILY US DOLLAR - A STRONG BUY If a trader doesn’t trade currencies, why should they even care about what is happening to the USD? Think about the world economy. Whether a stock, ETF, bond, or commodity, everything is affected by the currency it is traded in. Currency is part of the fundamental make-up of each market. Tracking and understanding global money flows provides us with the big picture.Armed with that information, a trader can make better decisions about the markets they trade or how they manage their cash position. In other terms: risk-on, risk-off, trade-on, trade-off, capital invested, capital not-invested, etc. The US Dollar continues to attract capital from investors all over the world. But could this be a double-edged sword for US stocks? As capital flocks to the USD, this, in turn, hurts US multinationals as they need to convert their weak foreign currency profits back into USD. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100. The USD safe-haven trade may eventually trigger a broad and deep selloff in US stocks. As the USD continues to strengthen, corporate profits for US multinationals will shrink or disappear. US Multinational $1 Billion Revenue Example: $1 billion in revenue-generating a 15% net profit with a net neutral 0% currency translation equals a $150 million profit. $1 billion in revenue-generating a 15% net profit with a negative -15% unfavorable currency translation expense equals a $0 profit! In addition, the impact of inflation on the global consumer will lead to a pullback in consumer spending which will further reduce corporate revenues and profits. Combining the global currency dislocation and the economic cool off will bring on a global recession. WISDOM TREE BLOOMBERG • U.S. DOLLAR BULLISH FUND ETF • USDU • ARCA • DAILY RUSSELL 2000 SMALL CAPS -29.96% The Russell 2000 stock index is considered the bellwether of the US economy. The index measures the performance of 2,000 smaller companies whose focus is on the US market. Tracking this index gives us a broad overview of the health of the overall stock market. Since bottoming in March of 2020, the IWM has more than doubled. But in November 2021, the IWM put in its final top. Upon completing and then breaking out of a distribution wedge, the IWM is now solidly in a bear market. Knowing this information tells us that we should seriously consider we are in a period of risk-off, no-trade, and cash as a position. For experienced traders, they may consider buying non-leveraged inverse index ETFs on days when the market has a sharp spike rally up. ISHARES • RUSSELL 2000 ETF • IWM • ARCA • DAILY LEARN FROM OUR TEAM OF SEASONED TRADERS In today's market environment, it's imperative to assess your trading plan, portfolio holdings, and cash reserves. Experienced traders know what their downside risk is and adapt as necessary. Successful traders manage risk by utilizing stop-loss orders, rebalancing existing positions, reducing portfolio holdings, liquidating investments, and moving into cash. Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following: A loss of 10% requires an 11% gain to recover A 50% loss requires a 100% gain to recover A 60% loss requires an even more daunting 150% gain to simply return to break even. Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or a few months, while a 50% drawdown may take several years to recover.  Depending on a trader's age, they may not have the time to wait on the recovery or the patience. Therefore, successful traders know it's critical to keep their drawdowns within reason, as most of them learned this principle the hard way! HOW WE CAN HELP YOU LEARN TO INVEST CONSERVATIVELY At TheTechnicalTraders.com, my team and I can do these things: Reduce your FOMO and manage your emotions. Have proven trading strategies for bull and bear markets. Provide quality trades for investing conservatively. Tell you when to take profits and exit trades. Save you time with our research. Provide above-average returns/growth over the long run. Have consistent growth with low volatility/risks. Make trading and investing safer, more profitable, and educational. Sign up for my free trading newsletter so you don’t miss the next opportunity! We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Short Squeeze - What Is It? | Binance Academy

End Of Utopia!? Current Strength Of (USD) US Dollar Has Some Disadvantages... Does Fed Bear Them In Mind?

Chris Vermeulen Chris Vermeulen 09.05.2022 17:26
The US Dollar continues to attract capital from investors all over the world. But could this be a double-edged sword for US stocks? As capital flocks to the USD, this in turn hurts US multinationals as they need to convert their weak foreign currency profits back into USD. The USD safe-haven trade may eventually trigger a broad and deep selloff in US stocks. As the USD continues to strengthen, corporate profits for US multinationals will shrink or disappear. US Multinational $1 Billion Revenue Example: $1 billion in revenue-generating a 15% net profit with a net neutral 0% currency translation equals a $150 million profit. $1 billion in revenue-generating a 15% net profit with a negative -15% unfavorable currency translation expense equals a $0 profit! In addition, the impact of inflation on the global consumer will lead to a pullback in consumer spending which will further reduce corporate revenues and profits. The combination of the global currency dislocation along with the economic cool off will bring on a global recession. The following chart by Finviz shows the percentage the USD has appreciated against all the major global currencies year to date: Let’s review a few of these primary currencies to get a better idea of how much capital is migrating out of each of these countries and into the US dollar.       CANADIAN DOLLAR LOSING -7.29% The Canadian Dollar CAD peaked in the first week of June 1, 2021. The Canadian economy has benefited greatly from soaring energy and commodity prices, strengthening metals markets, and strong real estate prices. But despite this economic strength capital is still migrating out of the CAD and into the USD. INVESCO CURRENCY SHARES • CANADIAN DOLLAR TRUST ETF • ARCA • WEEKLY SWITZERLAND FRANC LOSING -12.53% The Switzerland Franc CHF peaked in the first week of January 6, 2021. The CHF has long been considered a safe haven for global capital during times of risk-off global market stress. The primary factor hurting the CHF is its current fiscal policy and negative interest rate of -0.75%. Therefore, the USD is still the preferred safe-haven currency due to CHF’s negative rate. Capital continues to flow out of the CHF into the USD. INVESCO CURRENCY SHARES • SWISS FRANC TRUST ETF • ARCA • WEEKLY BRITISH POUND LOSING -13.87% The British Pound GBP peaked in the first week of May 24, 2021. The GBP was the primary global reserve currency in the 19th century and the first half of the 20th century. However, that status ended when the UK almost bankrupted itself fighting World Wars I & 2. Since that time the US dollar has replaced the GBP as the primary reserve currency. The USD has a similar interest rate to the GBP and is also benefiting from its strong presence in energy and commodity markets. Therefore, the GBP is experiencing capital flows out of its currency and into the USD. INVESCO CURRENCY SHARES • BRITISH POUND TRUST ETF • ARCA • WEEKLY JAPANESE YEN LOSING -23.76% The Japanese Yen JPY peaked in the first week of March 2, 2020. The JPY has also long been considered a safe haven for global capital during times of risk-off global market stress. However, the primary factor hurting the JPY is its current fiscal policy and negative interest rate of -0.10%. Therefore, the USD is still the preferred safe-haven currency due to the JPY’s negative rate. Capital continues to flow out of the JPY into the USD. INVESCO CURRENCY SHARES • JAPANESE YEN TRUST ETF • ARCA • WEEKLY How We CAN HELP YOU Navigate Current Market Trends At TheTechnicalTraders.com, my team and I can do these things to assist you: We reduce your FOMO and manage your emotions. We have proven trading strategies for bull and bear markets. We provide quality trades you can trust. We tell you when to take profits and exit trades. We save you time with our research. We provide above-average returns/growth over the long run. We have consistent growth with low volatility/risks. We make trading and investing safer, more profitable, and educational. Sign up for my free trading newsletter so you don’t miss the next opportunity! Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
The Harsh Realities Of Caving Into Emotional Trading

The Harsh Realities Of Caving Into Emotional Trading

Chris Vermeulen Chris Vermeulen 06.05.2022 22:02
Wow, what an emotional trading day and week thus far. What John said Wednesday in the member’s comments could not be more accurate for most people. "Only thing scarier than shark week is FED week!"Luckily we safely navigated the turmoil and FOMO brought on by FED announcements on Wednesday, May 4th.We knew it would be choppy and that trades should only last hours to a day, and you must actively manage positions.Earlier this week, I mentioned the only things I liked were UUP, UNG, and SVXY. So far, UUP is flat; given the recent market sell-off, that’s a win. UNG is up 15%, and SVXY rallied 7.2% in the last 24 hours. These were not official trades, but I gave trading tips and updated you each day and how to handle them if you were to trade them. Get in, make money, get out.Wednesday’s Fed rally sparked FOMO buying, indexes hit resistance, became overbought, and had a cycle high. Today investors bumped shares with the panic volume indicator on the downside, spiking over 31 yesterday afternoon. Temporarily.Overall not much safety during panic selling like this, and it’s the reason why I don’t believe in holding stocks in a downtrend or bear market. I get pushback all the time about holding cash, but the answer as to why I do is simple.Why You Want To hold cash vs Own StocksAll I have to do is ask: Would you rather own stocks because you like owning stocks and lose 25-60% of your money if we enter a bear market?OR Would you rather have a ton of cash waiting for you to buy your favorite stocks at a much lower price, earn more dividends, and make bigger returns at some time in the near future?Simple answer....or is it?That last part, "make bigger returns at some time in the near future", may throw a kink into some of your answers. It’s like that test they do with kids where they offer one cookie now or wait five minutes, and we will give you four. Most people take one cookie, unfortunately, and it defies my question and logic = frustrating!This leads to the most frustrating part of what I do. I have watched trader after trader make the same mistakes for the past 20 years. They go through the cycle of thinking the markets are amazing, to having a big winning stock trade that hooked them, to emotional FOMO-based trading, to the eventual closing of their trading account. They get crushed both financially and mentally. No matter what I do to help, most are driven by their emotions, which by the way, is the most powerful decision-making force we as humans struggle to control.The reality is most traders would rather trade and hold stocks no matter what direction the stock market is going, and here’s why:They think they should (lack understanding of risk and position management).FOMO, they fear missing out on potential gains and don’t want to be left behind.They crave the risk/excitement (the rush of trading is like gambling, it is addicting).They cannot contain their emotions and struggle with exiting both winning and losing Trades.How do I know these things?Simple, I used to think and trade that way. And it was days like WEDNESDAY when I blew up one of my trading accounts trading ES mini futures. In one day, I lost everything I had!Facing the Reality of emotional tradingYesterday afternoon I relayed this story to my subscribers so that they might fully understand why I spend so much time educating people about cash being a wise position when the markets are in the state they are in right now. The day I blew up my trading account I was down so much money I could not sell, so I just kept averaging down, waiting for the intraday bounce. Well, it never came, and the only thing that did come was the closing bell and margin call that broke my account, my confidence, and my dreams. I never did tell my then-girlfriend and now-wife about that one. I felt like a total loser, my confidence crushed, and I got depressed for a little while. That was the defining moment in my trading career. To give up, or to trade like it’s a business and do all the proper things that I hated to do like: sell losing trades and live to trade another day, smaller positions, fewer trades, stop trading leverage (futures and 2x 3x ETFs) because they made me too emotional, and to wait for trades to form vs. finding trades that may not be real setups, etc. I say all of this in hopes that it connects with some of you in the same situation.You either had a very stressful day and lost a lot of money, or your thought Thursday was incredible to watch and/or trade because you understand market movements, risks, how to trade it, and know there will be a lot more time and price action to earn consistent oversized returns later in a favorable market condition.I share my analysis, thoughts, and experience with you to help prepare you mentally and emotionally with your portfolio for days like this.And for the record none of the price action, this week, was anything out of the norm. Wild, sure, but this is typical price action in a bear market.how we CAN HELP YOU live to trade another dayAt TheTechnicalTraders.com, my team and I can do these things:We reduce your FOMO and manage your emotions.We have proven trading strategies for bull and bear markets.We provide quality trades you can trust.We tell you when to take profits and exit trades.We save you time with our research.We provide above-average returns/growth over the long run.We have consistent growth with low volatility/risks.We make trading and investing safer, more profitable, and educational.Sign up for my free trading newsletter so you don’t miss the next opportunity!Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Mark Leibovit Podcast - Volume Analysis Specialist

Mark Leibovit Podcast - Volume Analysis Specialist

Chris Vermeulen Chris Vermeulen 06.05.2022 14:20
Mark LeibovitThis block contains unexpected or invalid content.Attempt Block RecoverySign up for my free trading newsletter so you don’t miss the next opportunity!Introduction:    00:00       Are you ready to follow a proven trading strategy? Do you want to own the strongest index, hottest sectors, and bond ETFs only when they provide an opportunity for growth? Now you can, with the total ETF portfolio, trade alert, newsletter, follow our long-term investment positions, active index and bond trades, and own the hottest sector ETFs during stock market rallies. Visit www.thetechnicaltraders.com to learn more. Welcome to the Technical Traders Podcast, the show that brings you technically proven strategies and trade ideas from experts around the world. We're going to help you make more money with less risk, so you can take your trading to the next level. Now here's your host, Jim Goddard.Jim Goddard:      00:46       My guest is Mark Leibovit, editor and publisher of the Leibovit VR Newsletters, also known as VRTrader.com. He's speaking to us from Arizona. Mark, welcome to the Technical Traders Podcast.Mark Leibovit:     01:00       Glad to be here. I'm really excited about it.Jim Goddard:      01:03       Mark, can you tell us a bit about yourself and what VRtrader.com does?Mark Leibovit:     01:10       I was just an average guy in Miami, Florida, going to college and doing my own thing. And I made friends with a fellow who just happened to have an uncle who ran a commodity trading firm up in Chicago, and this is way back in the 1970s. And he said, Mark, what do you know about the stock market? And I said, well, you know, seems interesting. I don't know a lot about it, but I'd like to learn. He says, what if I took you to Chicago? And there's this new exchange being created called the Chicago Board Options Exchange. There's never been an options exchange before. So I'm dating myself. This is back in 1973. He says, well, we could train you how to trade options, get on the floor of this new exchange, you know, to just teach how to be a floor trader market maker.Mark Leibovit:     01:58       And you know, I said, gee, that's exciting. Can you make a lot of money doing that? And he says, well, you know, it depends on well you trade and whether you're a floor broker or whether you're actually an individual market maker for your own account and so forth. So crazy me, you know, I jumped on a plane to Chicago with my friend, and I decided to take a floor exam and learned a little bit about the floor and how to trade. It's all electronic but even back then, except there were only call options at the time, not put options for those who are unfamiliar with the options market. You know, calls are bidding on stocks going up, and puts are bidding on stocks going down. And that's so how I entered the business, so to speak.Mark Leibovit:     02:48       It's sort of a well-kept secret in a way. I mean, everybody that I've talked to in years since said, gee, I want to be in the stock market as a professional. And how do I get into the business? And the general procedure is, you know, you apply to one of the big brokerage firms. You know, without mentioning names, you know, all the popular names that are out there that you see advertising and you try to become a, a trainee, or eventually they get you assigned as a registered representative of the brokerage firm. So, I mean, let's use a big name, like a Merrill Lynch or something that everybody knows. So you see, they scrutinize you; they may or may not accept you. Then you have to take all these exams, these security exams. Then you can start calling people and be a retail broker and try to drum up business and make a commission for yourself or aggregate assets, and somebody else manages it.Mark Leibovit:     03:41       But, you know, it's a long, drawn-out process. Not everybody gets into it. And it's sort of funny because by, by the offer that I got it, jump-started, all that. In other words, it's like a well-kept secret. Nobody even thinks if I wanted to get into the business, maybe I should just go to the floor or the exchange. You know, forget this retail broker stuff. Why don't I just go right to the floor of the New York Stock Exchange or the TSX floor and trade in the pits? Of course, you know, we're talking now 2022 and a lot of the physical pits. They aren't what they were back in the 1970s. We have hundreds of people on the floor screaming at each other. Even though there were electronic executions of some transactions after they were made, but usually it was done through verbal hand signals and verbal outcry, and so forth.Mark Leibovit:     04:31       So it's sort of a well-kept secret that gee, you know, you can just fly up to Chicago or even New York Stock Exchange or Philadelphia Exchange are other places. The other exchanges out there are the Board of Trade, for example, or the Mercantile Exchange of exchanges. And so, I want to become a member of the exchange. And generally, they just say, okay, take the floor exam, get a clearing firm to, you know, back you on your trades. We have to put up a little bit of money, you know, back then it was like $10,000. And, you know, you're in business, you become like a floor trader right on the exchange. And so you're bypassing the whole system of retail brokers and calling clients and taking all those exams.Mark Leibovit:     05:14       It's just an interesting thing. So people were surprised when I told them how you get into the business. It wasn't through the normal route, which is generally your broker, and then you become a money manager, and you do all these other things. You just go right to the floor of the exchange. So the life experience, and that's sort of how I got started. And when I was down there, I met a lot of interesting people. I ran into a senior technician who trained me a little bit about technical analysis. And I met all kinds of people. I mean, they were fundamental people. I met astrologers who trade by astrology. I met that do spreads saw people that were front running news, that they would have connections that they would, no news was coming, and they would buy and sell options.Mark Leibovit:     05:57       And, you know, I became educated on the way the market works just by watching the guys trading in the pits, what they think and what they're doing. And one of the things I came up with, along with studying with a good friend of mine, was this volume analysis, sort of watching the movement of stocks. And I concluded, which is no great insight, but it was apparently since then, you know, the volume proceeds price. In other words, stocks tend to move when there are more buyers than sellers or sellers than buyers, depending on the direction. You know, we're talking about. So out of that team, the term volume reversal, which is the VR trader and the VR trader that you introduced me to, and it sort of became part of this thing where, you know, I followed the volume of the stocks and the options, and it sort of you know, got me some notoriety. And also gave me a competitive edge because most analysis, even today, is more price-oriented than volume-oriented.Mark Leibovit:     07:01       So it's a basic theory of VR, and it all came from my experience down there on the floor was, you know, you look for big volume changes off tops or bottoms, or even on an intraday basis. And you can usually generate some, you know, good signals about where a stock or commodity is going, or at least try to trade it in that direction as long as the volume is with you. So that's sort of the long-winded background, how I sort of got started in the business.Jim Goddard:      07:29       Anybody that you really admire or influenced you to become involved in the financial markets?Mark Leibovit:     07:35       I really admire Louis Rukeyser, who had a TV show called Wall Street Week with Louis Rukeyser. He launched, I think, back in the early seventies. And when I was in college, I used to watch the show, and one day this was after I already had been on the exchange; actually, I already left the exchange at that point. And I went to work for a retail brokerage firm in Chicago as a research director. They took me off the floor because they figured I could provide some good analysis for their clients and their representatives. I got a call one day from Louis Rukeyser, who said to me, would you like to be an elf? And I said, what's that?Mark Leibovit:     08:21       And he said, well, you know, we have these albums on our television show where they call the market, you know, bull, bear or neutral, and I saw some of your work, and I think you would be a good addition to the program. So I sort of fell out of my chair. I mean, you know, this is a major guy. People who've been around awhile, the leaders in the financial broadcasting field that really started everything with that Wall Street Week TV program. I think it was 1972. This is before CNBC, before the Financial News Network, and all the things that are around today, even before Investors' Business Daily or any of the big financial papers.Mark Leibovit:     09:06       So I said, sure, and then he invited me on the show, and I'm sitting there with all these high-powered Wall Street people, I mean, that are so far above me in terms of their connections or money management connections or assets that they manage or influence. And I was just like this little guy, and I had moved out to Arizona just around that time from Chicago. And so I'm this guy living in this house out in Sedona, Arizona, minding my own business, looking at my horses and my lamas and doing little gardening, and running my newsletter. And I got Louis Rukeyser on the phone with me asking me for; I think the United States stock market or the world stock markets are going up and down. And I'm one of 10 voices of top analysts out there. Like one of the most famous would be Marty Schwartz, who had his own Schwartz Funds, for example, who was like light years ahead of me in terms of, you know, the amount of influence and so forth.Mark Leibovit:     10:06       So you know, I was sort of on this ego high for a while. So I definitely admire him. I went to dinner with him a couple of times, remarkable man, you know, just a great inspiration. He wrote all his own copy. He didn't have copywriters. He had a tremendous sense of humor for those who had watched his broadcasts over the years. And he set the tone for financial broadcasting in the United States and Canada. So I would say he was one of the greatest that I would admire and say, look at what he's done and look at the influence he had. And the fact that I even had the remote connection with him is just an unbelievably positive thing in my life.Jim Goddard:      10:53       What's your investing philosophy? What set of principles, beliefs, or experiences drive your decisions?Mark Leibovit:     11:01       I'm doing what I'm doing every day and have been around so many analysts and technical analysts, contrarian thinkers, cyclic analysts, all these people I've met over the years. I've learned to put a lot of pieces together. I became very much a cynic about the markets in terms of accepting the news that you're hearing or believing everything you hear or see. And one of the reasons for that is, you know, there are more occasions than not that there's a lot of good news in the market and everybody loves it, and sure enough, you're at the top. Or an earnings report comes out, and the company's doing great, and that's a stock usually near a high, and that's the time to get out of it, not to get into it. And conversely, when they murder the stocks on really bad news, and everybody's panicking, and it's down there, it's usually a time to buy.Mark Leibovit:     11:55       So I've learned that whether it's manipulation of those stocks, which is part of my thinking as well. Because I saw some of that when I was a floor trader, they, you know, sort of manipulate prices to favor the crowd on the floor or whether it's just a natural reaction of peoples' emotions at the top or the bottom. So I became a bit of a contrarian. And I also ran into a lot of people who do a lot of psychoanalysis that you find out that one of the most famous, I would say, is an old friend of mine. I haven't talked to him in a few years, but Yale Hirsch, for example, who authored in the early 1970s, The Stock Trader's Almanac, which said things like, oh, you have a Santa Claus rally, or you have a Turkey shoot around Thanksgiving, or there could be what is known as a turnaround Tuesday where markets tend to change direction on Tuesdays.Mark Leibovit:     12:49       Or we have seasonal influences in the market, like the Verna Equinox or the summer solstice and so forth. And it's a very interesting book. You can still buy it, The Stock Trader's Almanac, but anyway, it opened my eyes to like they're seasonal and other patterns that occur in the market that you should be aware of that, you know, things don't necessarily happen arbitrarily. And there will be an impact by these cyclical events in the market on top of the technicals and the emotions and the news and everything else. So over the years, volume has been my key indicator. But I put a lot of different items in the soup. Do you know what I mean?Mark Leibovit:     13:33       So when I'm buying a stock, is there a lot of good news or bad news? Are the cycles, right? Are we in a down or up period in the market? For example, you know, the old expression sale may go away. I didn't invent it. It's been around a long time where if you know when you're in April may period, the market may tend to come down, and maybe it's a good time, you know, not to be in the market. So you put that together with what the stock is doing and what news is doing. And if the volume confirms that, then you have an added ingredient confirming your trade or your investment. So that's what I've come to learn. VRtrader.com and volume is the key factor for me, but you have to put a lot of pieces into play, the cycles, the emotion, the timing, and so forth, and come to a conclusion about where the market is headed and not headed.Mark Leibovit:     14:21       And by doing that, I've been fortunate to have been in the top timing named group in the US, not every year, but I think it was 2006 and 2019. I was named the top US market timer. And even though I was always on the list, you know, you can't always be in the number one slot. A lot of that resulted from putting all these, these pieces together, you know, and trying to figure out what's really happening here. So that's sort of the summary of what I do, and I should also say there are a thousand ways to make money in the market. I mean, my approach to the market doesn't mean it's the only approach. There are many people who do option spreads and use all the kinds of technical tools and so forth, and they're successful. And there are the people that are just long-term investors.Mark Leibovit:     15:08       Over the last hundred years, you know, even though we had some nasty corrections, if you just stayed long the market and you had a long timeframe, you generally were ahead of it. You could tolerate the volatility. So a little bit of doing nothing has paid off for a lot of people who had a long-term horizon without doing all the analysis and research if they could again tolerate the volatility like we're seeing right now. So, but then again, that's the way I approach it, Jim.Jim Goddard:      15:36       We'll have more with Mark Leibovit right after this.TheTechnialTraders:    15:40       New stock and commodity supercycles, technical analysis, proprietary trading strategies, live mentoring, and an active community of traders excite you. Are you looking for proven trade alerts complete with portfolio, your allocation, entry, price, target, and protective stop levels? Find out why thetechnicaltraders.com is the best source for active traders and investors to learn and earn. Visit www.thetechnicaltraders.com today.Jim Goddard:      16:06       Welcome back. We're speaking with Mark Leibovit; what's your favorite type of analysis or indicator that you find helps you time your investments?Mark Leibovit:     16:14       Again, it would be my volume reversal, the VR, and that's defined as a change of direction accompanied by a change of volume. So if you're a technical analyst or you're technically oriented, and you happen to subscribe to two platforms where you can get your charts, one's called Meta Stock, and one's called Trade Station. These are just platforms where you can put charts up and look at all various indicators, but on those two platforms, you could actually buy my volume reversal indicator, VR. It's a tool that you can add. It's called an add-on indicator; you can add it to the screen. You pay a little monthly premium for that, but those are only two places that you can actually see my indicator. So it's not generally available on other platforms.Mark Leibovit:     17:04       So what it is is, you know, a change of price by a change of volume. So if we're coming off of a top and price is down, and volume is exceeding, that's moved compared to the previous trading session. I'm giving you a very general example that would generally define a negative volume reversal. And I would say whether some smart money selling here off the top, and it's a good chance that we might go lower or maybe go a lot lower. And conversely, you know, we see a bottoming formation and stocks been down for a while or going sideways. And suddenly, we get an uptick on heavy volume coming off of a low, and that would generally, you know, be defined as a positive volume reversal. And that would indicate some smart money is out there picking up the stock or index, taking there are higher prices.Mark Leibovit:     17:49       And you can put this indicator on all types of timeframes. I have clients, and again, these two platforms that I mentioned, Meta Stock and Trade Station, allow you to do that where you can put up a five-minute chart, you know, 15-minute chart, a 30-minute chart, a daily chart, a weekly chart, a monthly chart, a yearly chart, and you can and see these volume patterns shifting in all these timeframes. So some people will trade intraday. They'll see a volume reversal in the S and T at 10:30 in the morning. And they're out by 11:30, 12 o'clock after it already made an up or down move. And by the same token, I could see it in the daily chart and then, you know, there's follow through the next day, the day after, maybe even a lot further.Mark Leibovit:     18:33       So what I've generally found is you get, you know, follow through after the volume shift. And you know, again, not putting all the other pieces together, but just looking purely as a technical analyst that as a tool, this is really been my lifesaver over the years because you don't want to fight the volume trend. If there are more sellers and buyers, you don't want to be buying that stock. If there are more buyers and sellers, then you want to be in it, and you want to have momentum behind you. So you don't want to be the smartest person on the street. You're just following the tracks in the sand, as they say. And again, the VR, the volume reversal, would be my best answer to your question.Jim Goddard:      19:14       What is something you wish you would've known before you started trading and investing?Mark Leibovit:     19:19       Probably I should have been in the movie business or doing something else more fun. There are other little things that I was thinking of doing. At the time, I was actually in broadcasting school at the University of Florida. Actually, I saw my future more in communications and maybe even communication law. And maybe even in the film business itself because I got my younger brother motivated. He ended up doing it instead of me. So if my friend hadn't asked me to go to Chicago, as I mentioned in the earlier part of this interview, and take a flight up there and see what this new exchange was about, I'd probably be doing something like you, Jim. I'd probably be in the broadcasting business or running a TV or radio station, or maybe producing documentaries or films or whatever, which is where I thought I was headed. So I guess looking back, maybe I shouldn't have taken that flight to Chicago, even though I've enjoyed what I've done and made money. I would've had a whole different life and career and maybe fulfilled my childhood aspirations, which existed up to that flight into Chicago.Jim Goddard:      20:27       What's the best deal you've ever made?Mark Leibovit:     20:29       The best deal?Jim Goddard:      20:30       The best deal that stands out in your mind?Mark Leibovit:     20:33       Well, I was fortunate enough to have raised some money and taken a small company public many years ago, a tangential project of mine. I took a little public shell, I guess, what you would call a blind pool public. They have blind pools now, but they don't call them blind pools anymore. But it was back in; I believe it was in the late eighties, early nineties, and, you know, raised some money. And it was like a public shell looking for, you know, an acquisition, you know, something where you can put the money to use. And ended up, it was sort of fun too, because I was learning the merger and acquisition business as a sideline, just as an investment. So I ended up creating this public shell, and it ended up merging into what was known at the time as a company by the name of Boots and Coots, which is in the oil, fire extinguishing business.Mark Leibovit:     21:35       Particularly they were known for the Iraqi fires and putting those out. In fact, there was a famous film with John Wayne called Hell Fighters, which characterized and picturized the company and the leading people that were involved in that Boots and Coots company. So I sort of fell into this thing where I had this public show that had some cash in it. And the principals at a brokerage firm knew that I had that. And they said, well, would this company like to go public? And they would do it where it's known as a reverse merger, where they don't have to file an initial public offering. They just filed into a shell. So I happened to have a shell and Boots and Coots, and I became one. And it became, you know, pretty successful.Mark Leibovit:     22:18       Ultimately I think it got purchased and taken out by Halliburton, a very big company. So by accident and design, I sort of fell into this because I had no idea what I was doing. A little speculative shell would end up falling into the hands of a much bigger company that needed access to the public market. So I guess just looking back, it was probably fun and exciting time. And getting involved in a big-name situation, which is well above the league I was in. You know, I wasn't in the business of doing this. It just happened that I did one deal, and I was looking to do something interesting as a sideline. And it did make some nice money.Jim Goddard:      22:56       What's something you wish you would've known before you started trading and investing.Mark Leibovit:     23:04       Boy, this is a tough one. I wish I had a time machine that showed where the markets were going way ahead of time and so forth. I don't know. That's a tough question. What would I have liked to have known ahead of time? You know, maybe knowing the long hours and time that the market would take off your life, because the problem with the market is she's a very selfish mistress, as the expression goes, and you have to put a lot of time in the market as a general statement. It's not a casual endeavor. I guess you could be really lucky and just have some common sense and just like a company or a stock because they're selling a lot of products and just go out and buy it and just go to sleep, and you're making a lot of money,Mark Leibovit:     23:52       But it's a general rule; you've got to put a lot of time and effort into it. You've got to do your research. Look at a lot of stocks, follow the market. You know, the market doesn't give you a break. There is really no vacation from the stock market unless after like 911 when the market closed and you absolutely had no opportunity to trade or do anything. So borrowing, you know, a market shut down, you really have no vacation unless you decide that you're just not going to trade or provide your clients with any information, or somebody else could do that in your absence. So it's really a seven-day-a-week, 24-hour type situation. Because the market really never sleeps. They say, when the market is closed, it's still trading because there are still people still planning their trades.Mark Leibovit:     24:39       And now we have 24-hour trading around the world. So if it's closed in the US, the stocks could be trading in the far east. And, of course, creating overnight, not just during normal trading hours. So it's a very compelling time-consuming business. And unless you just decide you don't want to do it and not be involved in it, it will engulf you and take up a lot of your time, energy, etc. But at the same time, if you're asking yourself, are you having fun doing it? And I guess for me, that's been part of the equation. When the bell rings in the morning, and the horses come out of the gate, it's a new day, and what are the horses going to do that day? You know, and there's always something new, and there's always something exciting happening in the markets.Mark Leibovit:     25:27       And there's one thing about the markets is it's probably the closest thing we have in life to a crystal ball because you see where money is flowing into new technologies and areas. And you really see the future. And if you're not really on top of the market, you really don't know what the new trends are, both in products and in technology, because it's being funded and traded accordingly. So in that sense, it's a crystal ball to the future. It's an exciting game of new opportunity, and that sort of offsets all the time and effort you have to put into it, but it's a bit of a sport, but it's a fun one.Jim Goddard:      26:03       Is that what keeps you interested in trading or the financial trade?Mark Leibovit:     26:08       There's a word for it. It's called addiction. It's an addiction. Yes, you have to be addicted to it at a certain level. It's not so casual. I don't think anybody's in the market. Isn't somewhat addicted to it on a certain level because you're watching it all the time. At night, you pull out your phone, you can see what the overnight markets are doing, and if something new suddenly hits overnight, does that change your whole investment strategy for the next day or the next month? And you know, I guess the classic thing would be when those planes hit the World Trade Center in 911, I mean, did that change everything? And it did, you know, the markets collapsed for a long period of time, and a very short-term event can make big differences in the market. And that's sort of part of it. You've got to be willing to accept that risk of time.Jim Goddard:      27:02       How important is it to have an investment philosophy? Some people like to take risks; others are risk averted or have a real aversion to risk. How important is it to have that philosophy?Mark Leibovit:     27:15       It's very important. You have to decide, you know, really what your goals are. Do you know what I mean? Are you trading? Are you looking just to be passive and just protect your money? In which case, you just buy treasury bills or certificates of deposit in a bank, or you are just buying and selling low volatile utilities or bonds and so forth. Because bonds can go against you now with rates going up, so you can lose money on your [inaudible 00:27:44] unless they're very short-term maturities. Yes, you have to decide how you want to play the game. And the stock market is not the only game. I mean, there's the gold market, there's real estate, there are cryptocurrencies now. There're other places, you know, the banking, of course, I just mentioned.Mark Leibovit:     28:05       So, cash in the mattress? I mean, cash is an investment decision. You know, that's not necessarily a bad one. Sometimes having just cash in the bank or in your mattress, wherever you want to put it, is not a bad decision. So you have to decide where you are in your investment, where your sensibilities are. I know a lot of people who just have no interest in any risk, they don't want to see any changes in anything, and you know, what do they do? They buy an apartment house and collect rent, and the rental income is it. And they don't care if real estate's up or down, as long as they're getting their rental from their properties. And they're not worried that the stock market is up or down, and you know, they do stuff like that.Mark Leibovit:     28:49       So yeah, you've got to decide where your comfort level is. And the stock market may not be the best place for you. You know, it could be, like I say, in real estate or just running your own business, you know, running your own business and just putting the money away somewhere. You see, it's another decision too. So markets are not the only answer. The problem is when you're listening to financial broadcasts, all they really talk about is the stock market, you know, or the bond market. And there are other places for your money. But of course, the brokers got smart about that too, or the investment banks, because they said, well, gee, if you really like real estate, maybe we'll just create an exchange-traded fund that invests in real estate and let's call it a REIT, for example. So we give you an alternative that you don't have to be, you know, you could be in real estate, but we'll call it a stock, and maybe that'll make you feel better. So then they do the same thing with gold, and they do the same thing now with cryptocurrencies, and they create these vehicles that you can trade, but they still offer volatility. So again, you have to decide if the volatility is your cup of tea.Jim Goddard:      29:55       Do you have any recommended reading for people interested in investing?Mark Leibovit:     29:59       Well, let's see. Well, what would I do? I would start with when Bill O'Neill launched Investor's Business Daily in 1984. I was actually sitting next to him on a TV interview back in Chicago. He was launching it back then and actually became the first advertiser for my newsletter back in 1984. Nobody else was advertising because nobody knew about Investor's Business Daily, but I like that paper. It's a terrific research paper. They have a technical approach to the market. They have some great videos and reports that come out every day. You know, it's not the Wall Street Journal. It's not Barron's, you know, it's not CNBC, but they still do a great job. And I would say reading; there's a lot of stuff there in the Investor Business Daily publication, but also their research and their videos. And I would say that's a great place to go.Mark Leibovit:     30:46       And I haven't talked to Bill O'Neal since that day in 1984, and he probably doesn't even remember who I am, but you know, I remember when he was launching it, and it was it really was a terrific research tool. A lot of people made a lot of money just following the research from that. And if I had to give out one idea, that would be it. And the second tangential one is one I referred to earlier in the interview where there's a publication. It's actually a little magazine that comes out every year called the Stock Trader's Almanac. And this was the first book, or if I can call it a book. It's like a little manual that I've ever read in the stock market. And it was Yale Hirsch who created it. I think he's about 95 years old now, if I'm not mistaken, and he's still doing okay. But this is the publication that I refer to that gives you the cycles in the market and what markets tend to do at different times of year and days and hours. And that's why I called it the Almanac.Mark Leibovit:     31:50       So I first picked a copy up in the early 1970s, and it might have been the first book. This is even before I ended up going to Chicago and being a floor trader, the first book I ever read on the stock market. It's not like I say a book. It's like a calendar that gives you all the various things that are happening on different days and months and so forth in the market. So I would recommend that. But I'm also mentioning that from a selfish point of view because I'm just remembering now that I did start reading it or obtaining copies in the early 1970s. And I think it was 1987 that Yale's edition of the Stock Trader's Almanac came out, and he found out about me one way or another. And he dedicated that book that year, the 1987 edition of the Stock Traders Almac, to me. And I think he named a couple of other technicians in there as well. And he called me the new prognosticator.Mark Leibovit:     32:52       And, if you think about it at the time, I was like, you know, coming out of college, this is, you know, we're talking in the early 1970s. And I read this book, and it was interesting in the stock market. And about 15 years later, the guy that created it, Yale Hirsch, decided that the work that I had done since, obviously, I guess I was on the floor. I met Louis Rukeyser, and all this other cool stuff had happened, that I was important enough that he wanted to dedicate the 1987 edition to me and several other people. So in a way, I'm a little prejudiced at mentioning the publication, but it was an influence on me and getting me interested in even looking at the markets. So I would say besides Investor's Business Daily, I would get a copy of that Stock Trader's Almanac.Jim Goddard:      33:37       Before we go, what topic or financial or business practice are you really passionate about?Mark Leibovit:     33:46       I guess, trying to find new opportunities in the market, beat the crowd, be ahead of others, and make money doing it because that's what I'm doing. I'm in the money business; I'm in the educational research business; you're trying to find new and exciting ideas. So I'm always trying to find a new opportunity. One that I was given a lot of credit for was, for example, in 2014, a lot of volume came in; some of the cannabis stocks, which were new in Canada at the time, like weed, which later became canopy growth. And I saw that coming, and I became widely recognized afterward for being one of the early people to identify that as an investment opportunity. In fact, weed went from like a buck to $55 in the three or four years following the fact that I brought it to people's attention.Mark Leibovit:     34:42       So stuff like that encourages you. For example, Tesla, which is one of my big, you know, research recommendations. I got in very early on it, and it's been in a lot of accolades that came my way that, you know, went up ten times after I had made mention of it to people because I saw it as both a new frontier, but also technically as a stock that would probably do very well in the future. So, you know, getting accolades for some great calls, I guess, inspires you to want to look for more, and there's always going to be more, that's it. The market, no matter what you might think or how bad things might be or what news events might be around the market, always seems to eventually come back. And that's in the story, you know, going back from 1776, when they say under the Buttonwood tree where the New York Stock Exchange was formed and in the 200 and plus years look at all the volatility, but the market has been up, and there's always new ideas and new stocks and new opportunities.Mark Leibovit:     35:49       And, you know, whether it's cannabis or Tesla or biotech stocks or energy or solar stocks, there's always something developing out there. That's why I referred to earlier as the market being the best substitute for a crystal ball because it really does open opportunities. So you know, if you just want a nine to five job and that's all you're excited about doing, that makes your day. That's fine. I guess I'm looking for a little bit more excitement. I like the idea that I found the Tesla, I found the cannabis stock, or I found the situation like this Boots and Coots that I had mentioned to you before that went public because we got in early and were able to put together a little deal. You know, it's just the adrenal is running, and it's fun.Mark Leibovit:     36:40       And you know, it's a sport too. I mean, it's a game, it's a sport, it's an investment business, but you know, it keeps me going, Jim, I tell you. I mean, you know, in the market opens, I can't wait to see what's happening. In the middle of the night, if I get up, I'm looking at what the futures markets are doing. And that's why I answered you a little while back as being an addict. I mean, I'm addicted to the markets, and it makes my day, keeps me going, and is an exciting game.Jim Goddard:      37:12       Mark. Thank you so much for being on the Technical Traders podcast.Mark Leibovit:     37:16       Thanks for having me; it's been a pleasure to be here.Jim Goddard:      37:19       My guest has been Mark Leibovit, editor and publisher of the Leibovit VR newsletters, also known as VRtrader.com. I'm Jim Goddard; thanks for joining us this week on the Technical Traders Podcast. If you found value in our show, subscribe and give us a rating or share it with a friend. That would be greatly appreciated as well. Thetechnicaltraders.com is your source for technically proven strategies to make more money with less risk. So you can take your trading to the next level. Comments made on the Technical Traders podcast or an expression of opinion only and should not be construed as investment advice or recommendations to buy or sell any financial instrument. This information is for general information and educational purposes only. Guests on the show are not compensated for their participation. To view our full disclaimer, please visit our website at www.thetechnicaltraders.com.MARK LEIBOVIT PODCAST VIDEOhttps://youtu.be/oOVqlaTvfB8
Analysis of Gold for July 27,.2022 - Sideways regime, watch for the breakout

Is The US Dollar The Global Safe-Haven?

Chris Vermeulen Chris Vermeulen 04.05.2022 16:33
Global investors continue to pile into the US Dollar making it the primary safe-haven trade.  This may eventually trigger a broad and deep selloff in U.S. stocks. As the USD continues to strengthen, corporate profits for US multinationals will begin to disappear. The following chart by Finviz shows the percentage the USD has appreciated against all the major global currencies during the past month: In the current market environment, it’s imperative to assess your trading plan, portfolio holdings, and cash reserves. Experienced traders know what their downside risk is and adapt as necessary. Successful traders manage risk by utilizing stop-loss orders, rebalancing existing positions, reducing portfolio holdings, liquidating investments, and moving into cash. USDJPY UP +13.29% VS S&P 500 -12.76% The S&P 500 peaked on January 5, 2022, and after 3-months put in a lower top on March 29, 2022.  In comparison, the US Dollar USD has gained steadily throughout 2022 as noted in the FX currency pairs USDJPY, USDCHF, and USDCAD. Interestingly we can see that as the USD is picking up steam to the upside simultaneously stocks are selling off. It appears that the money that is coming out of the equity markets is going into cash. But not just any cash but specifically into US dollars. The global appetite for the US dollar and its subsequent rise can kill the stock market as US corporate profits dry up and everything the US consumer purchases in US dollars rise to levels that are no longer sustainable. UNITED STATES DOLLAR • GLOBAL COMPARISON • OANDA • DAILY GBPUSD LOST -36.30% 2007-08 During the Financial Crisis of 2007-2008, the British Pound vs the US Dollar GBPUSD lost -36.30% in 14-months. Translation: the USD gained +36.30 against the GBP! The current drop in the GBPUSD has been roughly -13.00% over the last 8-months. Potentially the GBPUSD could move down another -20% over the next 6-months or longer if the downturn lasts for an extended period. Translation: the USD has the potential to gain an additional +20% against the GBP! GBPUSD • BRITISH POUND VS US DOLLAR • FXCM • MONTHLY AUDUSD LOST -39.20% 2007-08 During the Financial Crisis of 2007-2008, the Australian Dollar vs the US Dollar AUDUSD lost -39.20% in just 4-months. Translation: the USD gained +39.20 against the AUD! The current drop in the AUDUSD has been roughly -8.42% over the last 1-month. Potentially the AUDUSD could move down another -30% over the next 3-months or longer if the downturn lasts for an extended period. Translation: the USD has the potential to gain an additional +30% against the AUD! AUDUSD • AUSTRALIAN DOLLAR VS US DOLLAR • FXCM • MONTHLY DISCOVER HOW TO MANAGE DRAWDOWNS Drawdowns are critical as the larger the loss the more difficult it is to make up. A loss of 10% requires an 11% gain to recover, however, a 50% loss requires a 100% gain to recover, and a 60% loss requires an even more daunting 150% gain to simply return to break even. Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or a few months while a 50% drawdown may take several years to recover. Depending on a trader's age they may not have the time to wait on the recovery nor the patience. Therefore, successful traders know it’s critical to keep their drawdowns within reason as most of them learned this principle the hard way! Sign up for my free trading newsletter so you don’t miss the next opportunity! Especially in times like these, traders must understand where opportunities are and how to turn this knowledge into profits. As technical traders, we follow price only, and when a new trend has been confirmed, we change our positions accordingly. We provide our ETF trades to subscribers. Recently, we entered new trades, all of which hit their first profit target levels and then eventually triggered their break-even profit stop-loss orders on their remaining position. After booking our profits we are now safely in cash preparing for our next trades. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Our core objective is to protect our valuable capital while identifying suitable risk vs reward opportunities for profits in new and emerging trends. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
FX: (GBP/USD) British Pound To US Dollar May Shock You!

Market Volatility - Traders Must Adapt Or Risk Losing Their Shirts

Chris Vermeulen Chris Vermeulen 02.05.2022 17:08
Market volatility remains elevated and may be setting the stage for spikes even higher than we have already experienced. Global money is continuing to flow into the US Dollar making it one of the primary safe-haven trades.  This may eventually trigger a broader and deeper selloff in U.S. stocks. As the USD continues to strengthen corporate profits for US multinationals will begin to disappear. It’s imperative to assess your trading plan, portfolio holdings, and cash resources. Experienced traders know what their downside risk is and adapt as needed to the current market environment. If you still have money invested in Amazon, Netflix, PayPal, or one of the many other stocks that are sinking fast there is no easy way out. Your options are: Hold tight and “hope” for a rally to recover part of your money. Reduce some of your position to “limit your downside” in case the bottom really falls out, and then sell the balance after a bounce of 5-8%. Move to cash, “bite the bullet”, get a good night’s sleep, take a break, reassess, and live to come back and trade another day. NASDAQ ENTERS BEAR MARKET TERRITORY The NASDAQ peaked at around 3.1618% of its Covid 2020 high-low range the week of November 21, 2021. THEN - the QQQ ETF's first swing down was -21% over a 16-week period (4 months). THEN - a brief 3-week rally, retraced around 61.8%. THEN - resumed its downtrend by taking out its previous low. THEREFORE - according to the -20% Bear Market Rule: QQQ – 23.32% from its peak and -21.27% YTD is in a bear market. QQQ • INVESCO QQQ ETF TRUST • NASDAQ • WEEKLY AMAZON BREAKING DOWN -35% Amazon AMZN peaked at around 3.1618% of its Covid 2020 high-low range the week of July 12, 2021. THEN - AMZN made a double top the week of November 15, 2021. THEN - the first swing down was -28.91% over a 16-week period (4 months). THEN – after a brief 4-week rally, retraced a little more than 61.8% of its initial downswing. THEN - resumed its downtrend by taking out its previous low. THEREFORE - according to the -20% Bear Market Rule: AMZN -35.74% from its peak and -25.39% YTD is in a bear market. AMZN • AMAZON.COM, INC. • NASDAQ • WEEKLY NETFLIX PLUMMETS -72% IN 5 MONTHS Netflix NFLX peaked at around 2.382% of its Covid 2020 high-low range the week of November 15, 2021. THEN – NFLX's first swing down was -17% over a 5-week period. THEN – a brief 3-week rally, NFLX retraced only 25%. THEN – the second swing down was -43% over a 4-week period. THEN – only less than a 2-week rally retraced around 33%. THEN - resumed its downtrend by taking out its previous low. THEREFORE - according to the -20% Bear Market Rule: NFLX – 72% from its peak and -68.40% YTD is most definitely in a bear market. NFLX • NETFLIX, INC. • NASDAQ • WEEKLY PAYPAL DROPS -73% IN 9 MONTHS PayPal PYPL peaked at around 5.1618% of its Covid 2020 high-low range the week of February 16, 2021. THEN – PYPL put in a double top the week of July 26, 2021. THEN - the first swing down was -14% over a 4-week period. THEN – a brief 4-week rally, retraced about 61.8%. THEN – the second swing down was -39% over a 14-week period (3.5 months). THEN – a 6-week sideways rally retraced only around 10%. THEN - resumed its downtrend by taking out its previous low. THEREFORE - according to the -20% Bear Market Rule: PYPL – 73% from its peak and -53.39% YTD is most definitely in a bear market. PYPL • PAYPAL HOLDINGS, INC. • NASDAQ • WEEKLY DRAWDOWNS HAVE A CRITICAL IMPACT We need to remember the larger the loss the more difficult it is to make up. A loss of 10% requires an 11% gain to recover, however, a 50% loss requires a 100% gain to recover, and a 60% loss requires an even more daunting 150% gain to simply return to break even. Recovery time also varies significantly depending upon the magnitude of the drawdown. A 10% drawdown can typically be recovered in weeks or a few months while a 50% drawdown may take several years to recover. Depending on a trader's age they may not have the time to wait on the recovery nor the patience. Therefore, successful traders know it’s critical to keep their drawdowns within reason as most of them this principle the hard way! prepare yourself for Market Volatility Especially in times like these, traders must understand where opportunities are and how to turn this knowledge into profits. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Our core objective is to protect our valuable capital while identifying suitable risk vs reward opportunities for profits in new and emerging trends. Sign up for my free trading newsletter so you don’t miss the next opportunity! As technical traders, we follow price only, and when a new trend has been confirmed, we change our positions accordingly. We provide our ETF trades to subscribers. Recently, we entered new trades, all of which hit their first profit target levels and then eventually triggered their break-even profit stop-loss orders on their remaining position. After booking our profits we are now safely in cash preparing for our next trades. Our models continually track price action in a multitude of markets and asset classes as we track global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Selling Puts - A Simple Options Strategy

Selling Puts - A Simple Options Strategy

Chris Vermeulen Chris Vermeulen 28.04.2022 16:58
Selling puts is a neutral to bullish strategy. Traders tend to overcomplicate things.  This is especially true with options trading where puts and calls can be bought and sold in seemingly endless combinations with cute names like calendars, diagonals, butterflies, iron condors, ducks, lizards, and so on. While more complicated strategies have their place, are they necessary to be a successful options trader?  No, not at all.  Quite often, simple strategies are all that are needed to make consistent profits. “Everything should be made as simple as possible, but not simpler".  That ironically is a paraphrase of something Einstein said - or is at least attributed to him.  Selling Puts Buying a put gives the holder the right to sell stock at the strike price to someone else, but only up to the time when the option expires.  We might buy a put to have downside protection, i.e., “insurance”, against a decline in the price of a stock we own.  We might also buy a put as pure speculation on a decline in price in the underlying.  The price paid for a put is a sunk cost that can only be recovered if the put increases in value.  For every put buyer who is long a put, there is a put seller that is short a put.  The put seller receives the price, or “premium”, paid for the put.  In exchange for the premium received there is an obligation for the put seller to possibly buy shares at the strike price. Two Simple Rules for Put Selling Like the stock Like it at the strike price We should only sell puts on a stock that we would be willing to buy.  If we’re willing to buy shares of a stock, why not sell puts on it and buy shares at a discount?  Or perhaps just collect put premiums and never actually buy the shares? We should only sell puts when we think the share price will go up, stay about the same, or if there is a drop it will be relatively small.  Here is where Technical Analysis comes in to help us assess the outlook for a stock.  We may be looking at an attractive stock that we wouldn’t mind owning, but just as with buying shares, we would only want to sell puts when we’re bullish on the stock at its current price. Trade Management There are a couple of possibilities for how to manage a short put trade.  If the underlying share price is above the strike price at expiration, we can simply let the put expire worthlessly.  We get to keep the premium collected and our obligation to buy shares ends when the option expires.  If the underlying share price is below the strike price at expiration, we’ll be assigned and must buy shares.  Keeping in mind the Two Simple Rules mentioned above, this is not necessarily a bad thing as we can: keep the shares for appreciation and dividends (if there is a dividend).  sell the shares and be done with the position. turn around and sell call options against our shares and continue to collect option premium and any dividends. If the underlying is below the strike price before expiration, there is the possibility of early assignment – at least with American-style options.  Some underlying, in particular cash-settled index products, have European-style options that are only exercisable at expiration.   If there is a significant time value left in the put option, an early exercise is unlikely.  It would be better for the put holder to simply sell their option if they wanted to exit the position.  Otherwise, they would be giving away the time value in the option.  But if the time value is small, they may choose to exercise before expiration. Rolling As put option sellers, we are in the “business” of selling time value in exchange for taking on an obligation to buy shares at the strike price.  If the time value is getting small in a put we sold, we can buy back that option and sell another one further out in time.  We can almost always do that for a net credit because we’re selling more time value.  Every additional credit we collect by rolling our option further out in time reduces our risk and potential cost basis.  For example, say a stock is trading at $25.  We sell a $24 put for 30 days out and collect $1 of put premium.  Since we might have to buy shares at $24, our initial risk in the trade is $24 - $1 = $23. Note that we’re already better off than if we had simply bought the shares at $25. But suppose the share price dips to $23 and we think we’re likely to get assigned on the put.  We could wait for the assignment and buy the shares at $24. We could also buy back the put for a debit and sell one further out in time for a credit.  As we are selling more time value than we’re buying back, we should be able to extend the duration on that position for a net credit.    Going back to our example where we sold the $24 put for $1, perhaps we’ve rolled that forward several times, collecting an additional $0.50 credit with every roll.   After three rolls, our cost basis on the shares would be $24 - $1 - $0.50 - $0.50 - $0.50 = $21.50.   Where we originally thought we liked the shares at $25, by selling puts instead of buying the shares we now own them with a 14% discounted cost basis of $21.50.  Conclusion After many years of buying and selling options using a wide variety of strategies ranging from the simple to complex, I find that a simple strategy like selling puts can be one of the easiest to manage and most reliable for generating regular profits.  Don’t make it more complicated than it needs to be! Sign up for my free trading newsletter so you don’t miss the next opportunity! want To Learn More About Options Trading? Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.    Our Options Specialist, Brian Benson, has been on fire. During the last month, of the last 13 trades he has made, 11 of them have finished in the money! If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com. Enjoy your day!
Top 10 Stocks to Watch: August 2023 - BY: RYAN SULLIVAN

Using Comparison Analysis For An Edge | S&P 500 (SPX), Coal, US Dollar (USD), Dollar Index (DXY)

Chris Vermeulen Chris Vermeulen 27.04.2022 15:16
Multi timeframe, as well as comparison analysis, have many benefits. As traders, we tend to utilize the shorter-term time frames to enter our trades and place our stops. But the BIG money is made from gleaning information from the longer-term charts. We would classify long term as monthly or weekly while short term would be a daily or 4-hour time frame. Comparison analysis can be done by comparing different time periods or we can see how our market is trading vs another highly correlated market. Since we have a lot of subscriber interest in stocks, we thought it might be time to compare the current chart of the SPY to the S&P 500 index during the 2002-2009 period. The S&P 500 weekly chart experienced a nice bull market with several buy points from 2002 up to 2007. S&P’s 2007 top occurred at its 2.0 or 200% extension of its 2002 high vs low. Then about 5-months later sold off a little over -20%. After hitting the key -20% psychological end-of-bull-market area the S&P rallied for several weeks up to its 1.618 overhead resistance. Then after turning back down at the 1.618 the S&P lost approximately -50% of its value. The complete drop occurred over a 17–18-month period from peak to trough. 2002-2009 SPX • S&P 500 INDEX CFD • WEEKLY • TRADINGVIEW SPY VULNERABLE TO ANOTHER -8% DOWN BEFORE STAGING A DEAD-CAT BOUNCE! The SPY is down approximately -12 to -13% from its peak for 2022. It is feasible the SPY could fall another -8% or reach -20% before it stages some type of rally into late summer or early fall. If this scenario plays out, we should then prepare for what could be a significant drop or bear market in the 4th quarter of 2022 that could extend into 2023 and beyond. The 2007 top of the S&P 500 index occurred at 2.0 or 200% of its previous major high-low swing low. The 2022 top for the SPY also occurred at 2.1618 or 200% of its Covid high-low swing low. The potential exists for the SPY to pull back -20% from its peak before staging a temporary rally to a lower distribution top. 2020-2022 SPY • SPDR S&P 500 ETF TRUST • 4-HOUR • TRADINGVIEW USD CONTINUES TO MOVE HIGHER We are now seeing that major economies (US/UK/Japan) are not immune from global deleveraging and inflation. Investors have been seeking safety in the US Dollar and this may eventually trigger a broader and deeper selloff in U.S. stocks. As the USD continues to strengthen corporate profits for US multinationals will begin to disappear. Especially in times like these, traders must understand where opportunities are and how to turn this knowledge into profits. Part of what we do at www.TheTechnicalTraders.com is to distill price action into technical strategies and modeling systems. These assist us in understanding when opportunities exist in the US stock market and specific sector ETFs. Our core objective is to protect our valuable capital while identifying suitable risk vs reward opportunities for profits in new and emerging trends. A CANARY IN THE COAL MINE – BERKSHIRE HATHAWAY Around 1911, miners would carry canaries into coal mines to give them an advanced warning of danger. This phrase or analogy is also utilized by traders in the financial markets. Our canary or canaries would simply be a market or stock that might give us an indication that there is a problem with the overall market or that the global equity markets are shifting from a bull to a bear. Berkshire Hathaway BRK.A (NYSE) founded and operated by famed Warren Buffet is a diversified holding company that owns subsidiaries that engage in insurance, freight rail transportation, energy generation, and distribution, services, manufacturing, retailing, banking, and others. It is a good candidate for “a canary in the coal mine”, in our case the stock market.  Berkshire is down approximately -9% from its 2022 peak but remains up +10% year-to-date. BRK’s stock price reached 200% as its shares traded above 2.618 and 2.666 for a few days before selling off. From its Covid low on March 23, 2020, to its 2022 high on March 29, 2022, BRK rallied 2 years and 6 days from trough to peak. If BRK were to lose -20% from its peak or give back all its 2022 gain in the stock price we should prepare to sell the rally that follows if we have not done so already. Note: TTT subscribers are already safely in cash awaiting trade instructions for select alternative or inverted ETFs. BRK.A • BERKSHIRE HATHAWAY INC. • NYSE • DAILY • TRADINGVIEW UNDERSTANDING PRICE IS A GAME-CHANger As technical traders, we follow price only, and when a new trend has been confirmed, we change our positions accordingly. We provide our ETF trades to subscribers. Recently, we entered new trades, all of which hit their first profit target levels and then eventually triggered their break-even profit stop-loss orders on their remaining position. After booking our profits we are now safely in cash preparing for our next trades. Our models continually track price action in a multitude of markets and asset classes as we track global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Sign up for my free trading newsletter so you don’t miss the next opportunity! Successful trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Combing Thru Data - Looking For Clues About Volatility, USD & Stocks

Combing Thru Data - Looking For Clues About Volatility, USD & Stocks

Chris Vermeulen Chris Vermeulen 25.04.2022 17:05
We are now seeing that major economies (US/UK/Japan) are not immune from global deleveraging and inflation. As investors seek safety in the US Dollar this may eventually trigger a broader and deeper selloff in U.S. stocks and market volatility will begin to pick up as the VIXY moves up. As the USD continues to strengthen corporate profits for US multinationals will begin to disappear. Especially in times like these, traders must understand where opportunities are and how to turn this knowledge into profits. Part of what we do at www.TheTechnicalTraders.com is to distill price action into technical strategies and modeling systems. These assist us in understanding when opportunities exist in the US stock market and specific sector ETFs. Our core objective is to protect capital while identifying suitable opportunities for profits in trends. Read next: Mike Swanson Podcast - Find Your Investing & Money Management Strategies| FXMAG.COM VOLATILITY MAY HAVE BOTTOMED SETTING THE STAGE FOR A TREND HIGHER Volatility is beginning to pick up as we see the VIXY moving up strongly from its 6-month base. Utilizing multiple time frame analysis and then focusing on the 4-hour chart we were able to capture the volatility low earlier than we would have by only using the daily, weekly, or monthly chart. VIXY – PROSHARES TRUST VIX SHORT-TERM FUTURES ETF: 4-HOUR THE USD IS UP VS ALL OTHER MAJOR CURRENCIES The US Dollar is continuing to appreciate as investors and central banks seek safety from geopolitical, inflation, and other market dislocations. The low in the USD was made on January 6, 2021. Read next: Global Market Trends Continue To Push US Dollar & US Assets Higher| FXMAG.COM 1 YEAR RELATIVE PERFORMANCE (USD) – WWW.FINVIZ.COM UUP – INVESCO DB USD INDEX BULLISH FUND ETF: DAILY STOCKS MEET RESISTANCE AND ARE SLIPPING AGAIN! Stocks hit resistance the first week of 2022 after hitting a Fibonacci iteration of 2.1618. Less than two months later the SPY found support at yet another Fibonacci number of 1.618. These Fibonacci levels are based on the range calculation of the pre-Covid high and the Covid March 2020 low. However, after rallying from the 1.618 level the SPY rolled over to the downside as it hit a 72-bar (12-day) Bollinger Band using a standard deviation setting of 1.618. Now we will watch closely to see if the price will make a new low for 2022 which may confirm a shift in the overall trend in stocks. SPY – SPDR S&P 500 ETF TRUST: 4-HOUR INVERSE ETFS OFFER AN ALTERNATIVE TO TRADITIONAL BUY AND HOLD Astute traders who want to do more than liquidate part or all their stock holdings may want to consider investing in an inverted ETF. Inverted ETFs provide the ability to take advantage of a downturn in the stock market without the complexities of having to sell individual stocks short. If our goal as a trader is to make money, we need to adapt and be as agile as necessary. This is one of the reasons why our team continually tracks global money flow according to each country's stock index but additionally other types of markets and asset classes. Our quantitative trading research is crucial in determining which markets to trade and how to efficiently employ trading capital. Read next: What Is Chia Coin? - (XCH) - First New Nakamoto Coin Since Bitcoin Launch (2009) | FXMAG.COM Since we reviewed the SPY uptrend and the potential for a change of trend to the downside; it’s only appropriate to view the opposite side of this trade by looking at the SH inverted ETF. SH – PROSHARES SHORT S&P 500 ETF: 4-HOUR UNDERSTANDING PRICE IS A GAME-CHANger As technical traders, we follow price only, and when a new trend has been confirmed, we change our positions accordingly. We provide our ETF trades to subscribers. Recently, we entered new trades, all of which hit their first profit target levels and then eventually triggered their break-even profit stop loss orders on their remaining position. After booking our profits we are now safely in cash preparing for our next trades. Our models continually track price action in a multitude of markets and asset classes as we track global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Sign up for my free trading newsletter so you don’t miss the next opportunity! Successful trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Mike Swanson Podcast - Find Your Investing & Money Management Strategies

Mike Swanson Podcast - Find Your Investing & Money Management Strategies

Chris Vermeulen Chris Vermeulen 22.04.2022 16:48
Mike SwansonSign up for my free trading newsletter so you don’t miss the next opportunity!Introduction: 00:00           Welcome to the Technical Traders Podcast, the show that brings you technically proven strategies and trade ideas from experts around the world. We're going to help you make more money with less risk so that you can take your trading to the next level. Now here's your home host Jim Goddard.Jim Goddard: 00:43           My guest is Mike Swanson, editor of WallStreetWindow.com. Mike, welcome to the Technical Traders Podcast.Mike Swanson: 00:50           Oh, it's great to talk with you. Thanks for having me on the show today.Jim Goddard: 00:53          Mike, can you tell us just a little bit about WallStreetWindow.com?Mike Swanson: 00:59           Yeah, sure. It's a financial website. And typically, if you go to it, you'll see a couple of blog posts. They're not all written by me, but the real heart of it is the email list. There's a subscribe button at the top, and every morning before the opening, I'll send out an email with a link to my market thoughts and then also links to the top news stories of the day that I believe people need to know about if they want to watch their investments or trade the stock market. And I've been doing it for over 20 years now and trading and investing for well over 30. I'm starting to lose count.Jim Goddard: 01:43           How did you get started in trading or investing?Mike Swanson: 01:47           Well, I was a college student in graduate school for History, and I wasn't sure if I wanted to continue in that as a career. And I just started this was in the late nineties when internet stocks were really hot, and there was an internet bubble, and everything was going up. I started to trade the internet stocks with $15,000 that I inherited actually. I didn't know what I was doing and turned that into 60 and thought, I've to get out of college, and well, I'll try to just trade for a year. And then I lost most of that money. It turned in about 15,000. From then, I had to learn what I was doing if I was going to keep doing it. I ran that up to about a hundred in 1999. So it was an interesting time, to say the least.Jim Goddard: 02:48           Is there anybody you really admire or influenced you to become involved in the financial markets?Mike Swanson: 02:55           Well, I would say that the experience I had starting out were I lost, you know, running up to 60 on just, I would say just luck and then over 12 months or so turned that 60 into 15,000. At that time, I knew I needed to learn what I was about how to do this. There was a book called market wizard by Jack Schwager, and I think it was written in the eighties, but it profiled several hedge fund managers and just winning traders investors that were famous at the time. I recall Jim Rogers was one of the people in there, and they all told a story that I was just living through. Where they started out, they got lucky, and then they lost most of their money or all of it. And they had to take it seriously and figure out a way to win.Mike Swanson: 04:02           So that was really a message I needed to hear. And I would say the number one thing that inspired me to take this seriously and eventually do well at it, but actually a good documentary right now, I'd recommend people watch on HBO. I think it's called Icon. But it's about Carl Icon and profiles him. And interestingly enough, he tells a similar story in there where he started trying to trade in the early 1960s and wiped out and said; I've got to have an edge. I just can't be doing everyone else is doing, you know, and he developed one for himself. And it's not so much that there's one certain thing you have to learn or one technique or secret or something. It's more that you just have to take it seriously and realize it does take effort and work, and you have to develop some sort of strategy that works for you. And that's going to take, you know, reading books about different investment techniques and getting a blend of it all and then figuring out what is going to fit for you. And that might change over the years. So when I started early, I was really a day trader, and now I'm more of an investor who tries to hold positions for several years if the market will let me do it.Jim Goddard: 05:42           So what is your trading philosophy? What set of principles, beliefs, or experiences drive your decisions?Mike Swanson: 05:49           Well, I'll go quickly back to the books that really inspire me because they'll help me answer your question. But there is one by someone named Stan Weinstein, Secrets to Profiting in Bull and Bear Market. The One up on Wall Street by Peter Lynch. How to make money in stocks by William O'Neill and the Stan Weinstein book it's probably the best book about charting and technical analysis I've ever read. And again, it's written in the eighties, and you can get it on Amazon, but it's out of print. But I'd recommend people buy these three books. And what it really focused on was the trend in the market. You know, you're in a bull market or a bear market. And if you're in a bear market, you can short stocks, and bet against them. If you're in a bull market, you obviously want to go along. But he shows in this book the best times to buy. And he actually lays out a strategy of when to buy that he thinks is the best.Mike Swanson: 07:05           So learning all that was really useful to me. And then the, William O'Neil book, he was the founder of Investor's Business daily. And in his book, "How to make money in stocks," he says that there are three things that determine that, you know, drive a stock higher. One is the individual characteristics of the stock, its fundamentals, does it have earnings growth. What's the chart on the stock. And he also talks a little bit about charts, and then the stock market, you know, what's the overall market condition. But then he has a third factor: the sector that the stock is in. And, you know, he claims in the book, and I believe it from my own experience, that he analyzed thousands and thousands of historical stock prices. And the number one determining factor of whether the stock goes up or down is what the stocks and its group are doing in its sector. So that, combined with the Stein Weinstein thing, that's the primary way I figure out what I want to buy. It's; what's the chart of the stock and the sector, and what's the sector doing relative to the stock market. So the stocks that tend to go up the most are the stocks that lead their sector, and that sector is outperforming the stock market.Mike Swanson: 08:50           So as we're speaking right now, gold stocks in 2022 in the first three months are among the top sectors of the market. So, energy stocks, if you look at gold stocks, Nuance is one of the top-performing stocks in the entire S&P 500 because it's in that sector. Whereas a lot of stocks in the S&P 500 are down year to date at the moment. And Exxon is one of the top-performing stocks in the Dow 30, and, no coincidence, it's in the energy sector. So to me, that's the key, what is really closely following what the sectors are doing, and that's something really hammered home in that William O'Neil book. So I think that that's probably one of the most important things I really believe in.Jim Goddard: 09:49           What's your favorite type of analysis or indicator you find helps you with your trades or investments?Mike Swanson: 09:57           The road is a strength indicator - what that is doing is dividing the price of a stock or fund with another stock or fund. So the way I use it to divide, I'll just talk about the gold stocks. The GDX is a gold-stock ETF. You take GDX divided by SPY, it'll create a ratio, a number, and you plot that out. And what that does is it will show you how GDX is performing relative to the S&P 500; which price is going up more than the other, not going down as much as the other. So that helps me visualize how a sector is performing relative to the stock market. And after that, this is a simple 200-day moving average. I would say it is the most important price indicator.Mike Swanson: 11:06           And, you know, if something is in a bull market, it will trade above the two-day moving average. And that will act as price support on a long-term basis. And typically, the stock market, when it's in a bull market, will touch that two moving average once or twice a year, giving you a good buy point for the broad market. But if you're in a bear market, what'll happen is prices will go below that. And then you'll get bear market rallies up to that two-day moving average where things stall out, and that can last for months. After 2000, it lasted for about two and a half years. In 2007, it was close to two years. Right now, you know, we're in a situation where the NASDAQ fell below that several months ago. So did the Russell 2000 and rallied into it and stalled out. So it says a lot about what the market really is. And you know, at the moment, this would all suggest the statistics with something like gold stocks, energy stocks, and avoid most of the NASDAQ a hundred. So all this can tell you where's the best way to make money or where should I be investing. Or if the gold stocks eventually go below that through moving average, then I would want to get out of possibly.Jim Goddard: 12:46           What's something you wish you would've known before you started trading and investingMike Swanson: 12:52           Well, one of the biggest things I had to learn, and it took me the longest to learn, is to really hone down a money management strategy. And I knew I always needed that. I actually always suspected that if you just had a good money management strategy and were flipping coins, you might be able to make money on your trade, but there really isn't any mapped out in a single book. In fact, I don't know about one book that is about just the money management strategy, and it's the topic that's least interesting to people that could be why it's more exciting to think about what you can buy and have it go up. But, the very first thing I ever heard about it just starting out was like, oh, if you can just risk $3 on a trade for every dollar, you'll just make a killing, but that's easier said than done. I mean, to find opportunities, we're going to triple your money; that's pretty hard to do on a consistent basis, much less on a short-term basis.Mike Swanson: 14:18           So when I started, the main way I tried to manage risk was through using stop-loss orders on my position. And typically, I would put it right on the low or right below the low of the previous months. Some might advocate, oh, put it on a certain moving average. And if it goes below that, you can use that as a risk loss point and then figure out, okay, where would that potential loss be, how big would it be? And use that to define how much you're willing to lose. And that's sort of more or less what I did for several years. But around 2014, I learned of another strategy, which is what I do now. And that's just a rebalanced position on a periodic basis.Mike Swanson: 15:27           So those investors even, you know, they'll say have 50% of their money in stocks and 50% in bonds. I wouldn't do this now, but historically it had been a good strategy to do this, to rebalance a 50/50 bond stock account because when the stocks would go down, usually bonds would go up, and then you could rebalance it. And that would be a way to manage risk and boost returns by, in effect, selling something when it goes up, buying something when it goes down. But what I do is apply that to not investing like half the money in stocks, half the money bonds, but in a mix of sectors and different asset classes. So the problem is today, the bond market is really in a bear market, and bonds themselves don't pay, as which is the rate of inflation. So they're very difficult to use as a safety portion of a portfolio. So I have to do that with, say, gold or silver in a mix of different asset classes and be more, a little bit tactical, a part of my account, flexible meaning. So I think what I'm saying may sound complicated, but it just amounts to figuring out how you're allocated and try to be in a mix of different things and just rebalance them periodically.Jim Goddard: 17:14           We'll have more with my Swanson right after this.TheTechnicalTraders.com: 17:17           Are you ready to follow a proven trading strategy? Do you want to own the strongest index, hottest sectors, and bond ETFs only when they provide an opportunity for growth? Now you can, with the total ETF portfolio, trade alert, newsletter, follow our long-term investment positions, active index and bond trades, and own the sector ETFs during stock market rallies. Visit www.thetechnicaltraders.com to learn more.Jim Goddard: 17:43           Welcome back. I am speaking with Mike Swanson. Mike, do you think inflation is spiking, and how will we know when inflation is actually topping out? And are there any indicators or signals that we should be watching for?Mike Swanson: 17:57           Yeah, as we're spiking, I don't think it's peaking at all. And I believe inflation is driven by rising commodity prices. I mean, they have the CPI index that, you know, factors in rent and energy and all the different things in it, various consumer items, but energy's a big component of it. And energy is obviously, is what dominates the commodity market. The energy market is, I think, close to 50% of the commodity research bureau index. So when commodities go up, I think that's what really causes inflation. Now, why they go up, that's a whole other topic, but just to make it simple, commodity prices are continuing to go up.Mike Swanson: 18:58           We just saw the CPI come out at 8.5% a few days ago. And they're people that are saying, you know, it's peaking, it's peaking. And just in the days after that report, a lot of commodities made new highs. So I see no evidence that it's really peeking out. And the big problem is that the price of oil in most commodities in general really made secular loads. In 2020, they had been in bear markets that were going on for years and made major bottoms. And then by the bear market, I mean, they were trading below their two-day moving average per year. Especially things like food, corn, and wheat, they were below their two-day moving average for almost ten years, some of them 12 years.Mike Swanson: 19:59           And then, in 2020, there was a final low when oil prices even went negative in the futures market for a few days; that was a secular bot. And then, within weeks, all these different commodities were above their two-day moving average. So what that says to me is that event was the start of a secular bull market, and secular cycles tend to last a decade. So I think this inflation thing is going to go on and continue for quite some time. And if you want to compare it to the past, if it's like we're in 1972, if you want to think about the 1970s as being an inflationary decade.Jim Goddard: 20:52           Oh, time to get out the bell-bottoms and the tie-dyed t-shirts.Mike Swanson: 20:57           That would mean more fun than going into the metaverse.Jim Goddard: 21:02           Growth stocks and sectors of 2020 had a terrible 2021 but have been starting to bounce back recently is a recent move up a time to buy more or sell the laggards.Mike Swanson: 21:14           Well, I think one should sell the lagging positions. That's how I navigate the markets. If there's a sector and stocks in it that are lagging and people have hundreds, I think you want to sell the bounces or even short them. So, you know, stocks like Facebook, for example, they might be things actually short, and a lot of these things aren't even growth stocks anymore. I mean, they're not growing their Facebook, at least, and I don't have a position on it, just using it as an example. It fell over 20% in one day. In January, when it came out and said that its earnings were shrinking because of the growth and peak of usage of Facebook, the website, they said, we're going to make a shift to this metaverse and spend all this money to try to develop that.Jim Goddard: 22:19           What sector or asset do you think would hold up well if we enter into a bear market in 2021/22?Mike Swanson: 22:27           Well, I would say gold and silver at this point because even though I'm bullish on commodities and I do own energy stocks, I do think that at some point, there will be a recession, and likely some sort of pullback in commodities doesn't mean the end of a bull market. I mean, they can just pull back to the two-day moving average, and they've been going up so much that that would feel like a big correction for people if it were to have. And at some point, it will, but gold and silver, they tend to trade together. That's why I mentioned both of them. Still, I think at this point, if these stocks have been trading opposite to the stock market for the past couple of months, so actually, if a stock market pullback would help them, it would draw more money into them. And a pullback in the stock market in a recession would make the Fed have to say, well, we're going to slow down on the rate hike. And that would just throw even more buying fuel for gold and silver. Jim Goddard: 23:56           What's the best advice you ever received?Mike Swanson: 24:01           I would just say, take trading and investing seriously, that it's easy when you start out just to get all excited about a stock pick or an idea. So I would say, like, Bitcoin is an idea, and crypto is an idea, and there's a lot of people now that's being excited about them. But I was excited about internet stocks in 1998, 99. You know, they were supposed to change the entire world. And they did have a huge impact that obviously changed our lives; we all use it all the time. But a lot of these stocks were just junk, and they went under, the companies went bankrupt, and so forth. And I know, in that cycle, many people bought into a lot of these stocks and just rode them on down to nothing and then got out of the market forever. They just gave up, and people thought, well, I can't make money in this, but the problem was they didn't have any sort of strategy at all. So that's the advice. You got to have a strategy. You can't just get excited about something and just, you know, buy it, and that's it. You have to be on top of what's going on, and it takes work. It's not like you're just going to the casino and playing a slot machine or something.Jim Goddard: 25:42           Mike, is there a financial or business practice topic you're really passionate about?Mike Swanson: 25:52           Well, I've been doing this for so long that it's hard to say, you know, and I've started businesses too or been involved in businesses. So it's different when you first start out. I do think you can be more excited, and you're in a learning-type mode. And you still have to learn different things as the years go by. I had a friend of mine, still a good friend, who told me that when it comes to business, it takes like five years to figure it all out and to really know totally what you're doing. And that was my experience too, with businesses I started, with trading, you know, it took a couple of years, perhaps it took longer than that. When I first started trading, I remember hearing people say, well, it takes like a year. It took me a year to figure out I needed a strategy. And then it took me perhaps 14 years to really have a money management technique. So I'm kind of passionate about sharing my views, what I've learned, and trying to help people in that way, and more so than when I started out, it's like a brand-new thing. So I guess that's how I feel about it now.Jim Goddard: 27:29           Mike, thank you so much for being on the Technical Traders Podcast.Mike Swanson: 27:33           Thank you. Great to talk with you.Jim Goddard: 27:35           Our guest has been Mike Swanson, editor of WallStreetWindow.com. I'm Goddard. Thanks for joining us this week on The Technical Trader Podcast. If you found value in our show, subscribe and give us a rating or share it with a friend that would be greatly appreciated as well. Thetechnicaltraders.com is your store for technically proven strategies to make more money with less risk so you can take your trading to the next level. Comments made on the Technical Traders Podcast are an expression of opinion only, and should not be construed as investment advice or recommendations to buy or sell any financial instrument. This information is for general information and educational purposes only. Guests on the show are not compensated for their participation. To view our full disclaimer. Please visit our website at www.thetechnicaltraders.com.MIKE SWANSON PODCAST VIDEOhttps://www.youtube.com/watch?v=mL121iMeg5g
Global Market Trends Continue To Push US Dollar & US Assets Higher

Global Market Trends Continue To Push US Dollar & US Assets Higher

Chris Vermeulen Chris Vermeulen 21.04.2022 16:59
Every day seems filled with some new comment or data point that suggests the Global Market or the US Fed will aggressively attempt to burst the inflation bubble. Global central banks continue to warn that COVID, and other issues, persist. Traders seek some clarity and understanding of what's going to happen next.Will The US Stock Market Continue To Rally Higher?Allow us to help you understand what is happening behind all these data points and news posts. We can understand key market components better by using specialized modeling systems that aim to distill market events into relatable trigger events within our strategies. This, in turn, helps us to better understand what may come next for the US markets.We'll focus on some of our Custom Indexes to better illustrate current market trends and conditions. These are examples of our Custom Smart Cash Index (a more global market custom index), our Commodity Price Index, and our Custom US Index (a focused US Custom Index).Comparing The Global Market Index vs. The US Market IndexLooking at this custom Weekly Smart Cash Index vs. the US Index, it is evident that the Smart Cash Index (in RED) has fallen very sharply over the past 14+ months. We can interpret this downward trend as a sharp shift in inflationary, deleveraging, and economic trends in Asia and much of Europe. We find this shift interesting because it took place after a substantial rally in both US and Global market assets from November 2020 to early February 2021. After the February/March 2020 COVID-19 event, the global markets entered a period of extensive economic recovery. The rebound in global stock market price levels prompted a strong wave of consumer engagement, rising asset prices, and robust demand for commodities, raw materials, homes, autos, and other core assets. As a result, consumers were flush with cash, and inflation levels were still timid (at best) – resulting in a +56% rally in the NASDAQ from October 2020 to the recent highs.In February/March 2021, something shifted rather dramatically to push the global markets into this new downward trend – what happened?Custom Commodity Price Index Chart Rallied 478% Above Normal Levels In Early 2021In our opinion, the extended demands relating to the superheated reflation of the post-COVID economy set off an explosive inflation trend. The following chart shows our Custom Commodity Price Index Weekly chart – highlighting the date range from February 2020 to mid-May 2021. You can see from this chart the normal upper price range has historically been near 4.5 to 4.7 for moderately strong commodity and raw material demand.In late 2020, our Custom Commodity Index chart pushed upward to a level near 8.0 in August 2020. Then, just after the US Presidential Elections, these levels rose even higher – reaching a peak level of 22.50 near early May 2021. That is a massive 478% higher than historical normal inflation levels.What happened to the Smart Cash Index was multi-faceted. Inflation, deleveraging of a speculative bubble, and consumers pulling away from big-ticket purchases likely prompted a revaluation of assets throughout the globe while these inflation trends continued to elevate.Debt/Credit Concerns Could Be Driving Investor Sentiment Now – Actively Seeking US Dollar SafetyAs we've seen, Chinese Real Estate Developers struggle with excessive debts and price levels contracts as consumers pull away from risks throughout the globe. The question becomes, globally are we only starting this new deleveraging event process.Many months ago, we published an article suggesting a new Depreciation Cycle Phase had started in December 2019 (just before the COVID-19 virus hit). You can read that article here: US DOLLAR BREAKS BELOW 90 – CONTINUE TO CONFIRM DEPRECIATION CYCLE PHASE. We want to highlight the transition that is taking place throughout the globe related to this Depreciation Cycle Phase. Looking at past research can help you better understand the broad-market trends.The Depreciation Cycle Phase Will Prompt An Asset Revaluation ProcessFirst, as global markets continue to struggle to find support, global assets will naturally migrate to the safest and strongest global assets (which appear to be the US Dollar & US Stocks at this point).Eventually, assets will shift into "bottom-fishing" while global assets appear to have reached an intermediate base level. This happens as shifting valuation levels drive investors to "fish" for opportunities – trying to pick bottoms in downward trending assets. Stay cautious of this type of activity.Lastly, continuous deleveraging pressure may prompt even the most vital assets to fall, closing the gap between the US Custom Index and the Smart Cash Index.I will highlight the potential that a rally in the Smart Cash Index while the US Custom Index trends lower (where both asset bases converge) would also attempt to satisfy a revaluation process.The Custom Smart Cash Index Weekly Chart shows current price levels are just below the 2019 highs. What this translates to is the global market level has deflated more than -26% from the early 2021 peak level. Much of this is related to what is happening in China/Asia, but it also reflects a broader deleveraging event that continues to unfold.Concluding ThoughtsThe major global economies (US/UK/Japan) will not likely stay immune from these downward trends. Eventually, the pressures related to deleveraging and inflation will push asset prices into a revaluation process. What that looks like is anyone's guess at the moment.The US markets will attempt to hold near recent lows as long as the US Dollar and foreign investors continue to see the safety and security of the US economy. If the US economy falters, capital will quickly move into broader safe-haven or opportunistic global assets (cryptos, Metals, Bonds, or undervalued global markets).Global markets are still transitioning from a post-COVID speculative event. That means, traders must understand where opportunities exist and how to profit from subtle price trends. Part of what we do at TheTechnicalTraders.com is to distill price action into technical strategies and modeling systems. These then assist us in understanding when opportunities exist in the US stock market and specific sector ETFs. Our core objective is to protect capital while identifying suitable opportunities for profits in trends.KNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and in the last six trades we entered in March, all have now been closed at a profit! Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! Successful trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success.WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy?We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Investors In Crisis!? Inflation, Rates Hikes And Geopolitics. Where Are Investors Putting Their Money - Now Vs. Then?

Investors In Crisis!? Inflation, Rates Hikes And Geopolitics. Where Are Investors Putting Their Money - Now Vs. Then?

Chris Vermeulen Chris Vermeulen 20.04.2022 16:55
Investors have been processing high inflation reports, rising interest rates, surging energy, commodity, and real estate prices. So, what is the market saying about which markets investors have favored the last couple of years vs where are they putting their money right now? A way to determine this is to simply plot the indices and then see how they stack up against each other. Price data should also be viewed and analyzed in a multi-timeframe environment: short-term, medium-term, and long-term. Additionally, we want to know how the market we’re trading is performing compared to its peers. As a trader or investor, we know it’s important to determine if a market is in a bull, bear, accumulation, or distribution phase. Additionally, we want to know how the market we’re trading is performing compared to its peers. Related article: Japanese Yen (JPY) Weakens Against The Dollar, USD/CAD Stable And The Inevitable Strengthening Of The USD, IMF/World Bank Events The following charts provide snapshots of how the SPY ETF (US S&P 500) is doing compared to the other US and global stock indices. The year-to-date chart is showing us a maximum volatility spread of 15.73%. This is simply the difference between the highest stock index, Australia 200 +1.18% vs the lowest stock index US Nasdaq 100 -14.55%. Australia’s market has recently done well due to its strong energy and commodity interests which in turn has contributed to the strengthening Australian dollar. SPY YEAR-TO-DATE DAILY: MAX VOLATILITY 15.73%      www.TheTechnicalTraders.com – TradingView The Hong Kong and China stock markets have been plagued with numerous Covid issues in 2020, 2021, and now recently again in 2022. The volatility spread at first doesn’t seem that significant but over time it can be substantial. This is one of the reasons why our team continually tracks global money flow according to each country's stock index but additionally other types of markets and asset classes. Our quantitative trading research is crucial in determining which markets to trade and how to efficiently employ trading capital. Read next: Altcoins' Rally: Solana (SOL) Soars Even More, DOT and SHIBA INU Do The Same! | FXMAG.COM This maximum volatility spread during 2021-2022 is 44.42%. The highest stock index, India 50 +23.75% vs the lowest stock index Hong Kong 33 -20.67%. The Hong Kong and China stock markets have been plagued with numerous Covid issues in 2020, 2021, and now recently again in 2022. SPY 2021-2022 DAILY: MAX VOLATILITY 44.42%      www.TheTechnicalTraders.com – TradingView Now we can take a longer-term view of the past 2+ years covering Covid before and after. We notice that the Nasdaq 100 is the overall leader despite its recent negative performance in 2022. This maximum volatility for 2020-2022 is 89.70%. The highest stock index, US Nasdaq 100 +69.70% vs the lowest stock index Hong Kong 33 -20.00%. SPY 2020-2022 DAILY: MAX VOLATILITY 89.70%      www.TheTechnicalTraders.com – TradingView KNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDED It is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and in the last six trades we entered in March, all have now been closed at a profit! Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Sign up for my free trading newsletter so you don’t miss the next opportunity! Successful trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
TRADING MAJOR INDICES                                     WITH MULTIPLE-TIME FRAME ANALYSIS

TRADING MAJOR INDICES WITH MULTIPLE-TIME FRAME ANALYSIS

Chris Vermeulen Chris Vermeulen 18.04.2022 21:48
There are many benefits to utilizing multiple time frame analysis in your trading. Some of the standard time frames are monthly, daily, weekly, 4-hour, 1-hour, etc. Longer-term traders may also monitor quarterly and annual charts for clues in market price action.Some traders use this process to hedge their position using options or an inverse ETF. Others use multi-time frame analysis to enter new positions by exploiting counter-trend moves within a trending market.Longer time frames tend to be more reliable but shorter time frames can reduce risk. Experienced traders who utilize multi-time frames seem to be able to extract the best from all time frames to improve their overall trading efficiency.Using the SPY ETF (S&P 500) we will look at a simple example of this type of time frame analysis utilizing the daily and a 4-hour chart:In early January 2022, the SPY reacted at 2.618% of its Covid 2020 price drop.The -14.55% price drop lasted approximately 50 days until the SPY found buying support at 1.618%.This price drop took out the 4th quarter 2021 SPY low and the drop was also greater than any other drop that had occurred during the 2020-2021 bull rally.SPY – SPDR S&P 500 ETF TRUST – DAILY CHART     www.TheTechnicalTraders.com – TradingViewSPY PRICE DROP OF -14.55% VIOLATED ITS 4TH QUARTER 2021 LOWThe SPY 4-hour chart shows us the exact same price information as the SPY daily chart. However, in viewing the 4-hour chart we have 6 times as many bars (1-day equals 24 hours and 24-hours equals 6 4-hour bars).One example of how this might benefit us is when using a 72-period Bollinger Band on a daily chart this would represent a calendar quarter. While a 72-period Bollinger Band on a 4-hour chart is equal to 12- days or one-half of a month.As we shorten the timeframe of our chart it is like we are looking through a magnifying glass which allows us to see our price data in greater detail.Once the SPY price violated its 4th quarter 2021 low we were signaled or given a clue that it may be time to liquidate our long positions and consider purchasing an inverse ETF to the SPY like SH.The 4-hour SPY chart utilizing a 72-period (12-day) Bollinger Band provides us with an excellent opportunity to take profits on our previous long positions by liquidating.72-period Bollinger Band: 72 4-hour bars equal 288 hours divided by 24 gives us 12-days.SPY – SPDR S&P 500 ETF TRUST – 4-HOUR CHART      www.TheTechnicalTraders.com – TradingViewUsing A MULTI TIME FRAME STRATEGY TO PURCHASE AN INVERSE ETF   There are different reasons for utilizing an inverse ETF. A trader may want to hedge their profit in the underlying market, or a trader may want to sell the market short outright. Regardless of the trader's motive, an inverse ETF can provide additional benefits and flexibility.As we analyze the SPY and how it violated its previous quarter low, we need to consider that the SPY may be transitioning out of its bull market phase.An alternative strategy or counter-strategy is to purchase a SPY inverse ETF like SH – ProShares Short S&P 500. A simple explanation of the inverse is that when the S&P 500 loses SH will gain or when the S&P 500 gains SH will lose. The goal of the SH ETF is to be as close as possible to the exact opposite of the S&P500 index (SPY ETF).Since SH is an inverse ETF we want to look for a place to buy SH using a multi time frame analysis chart such as the 4-hour chart. The 72-period Bollinger Band (12-day) just gave us a ‘Buying Zone’.SH – PROSHARES SHORT S&P 500 ETF – 4-HOUR CHART    www.TheTechnicalTraders.com - TradingViewKNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and in the last six trades we entered in March, all have now been closed at a profit! Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! Successful trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success.WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy?We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
The Many Uses of Option Delta

The Many Uses of Option Delta

Chris Vermeulen Chris Vermeulen 14.04.2022 15:37
In an option chain, the delta for a given option strike price can vary from -1 to +1. Call options have a positive delta for option buyers somewhere between 0 and +1. Calls increase in value when the underlying increases in value. Put options have a negative delta somewhere between 0 and -1 as Put option prices have an inverse correlation to the underlying price.Note that the signs on these relationships are reversed for option sellers who are short contracts. An option seller that is short a Call will have delta exposure between 0 and -1, while a Put seller will have delta exposure between 0 and +1.What is Delta?Option traders already have some familiarity with the set of option Greeks like delta, theta, and gamma. For those unfamiliar, the option Greeks are calculated values that approximate how option price may be expected to change given a change in input such as underlying price move, time decay, and implied volatility.Perhaps the most popular and versatile of the Greeks is the delta. It tells us how much the price of an option can be expected to change given a $1 move in the underlying stock. For example, if we’re long a Call option with a delta of 0.60, we might expect the option’s price to increase by $0.60 if the underlying share price increases by $1.00.How is Delta Calculated?We can think of delta as the ratio of option price change and share price change.Mathematically it is stated as               Delta = (O1 – O2) / (S1 – S2) where:O1 is the changed price of the option,O2 is the initial price of the option,S1 is the changed price of the underlying stock, andS2 is the initial price of the underlying stockFortunately, our option trading platforms can take care of the calculations.  You may have to configure your trading platform to include delta as one of the values shown in the option chain. Strike Selection and ProbabilityOption strike prices can be “in-the-money,” “out-of-the-money,” or “at-the-money.” An option with a strike price close to the underlying price is considered “at-the-money.” An option that is “at-the-money” will have a delta that is very close to 0.50.Keep in mind that the delta itself changes with a change in the underlying price. We can generally expect the it to increase when an option moves further in-the-money.One of the more common uses for delta is to help traders select strike prices. If we’re bullish on a stock and would like to buy a Call option rather than the shares, delta can help us select a Call strike price.Delta can also estimate the probability of a particular share price at expiration. For example, a Call option with a delta of 0.80 suggests that the underlying has an 80% chance of being at or above that strike price at expiration. Or conversely, a 20% chance that the underlying will be below the option strike price at expiration. More rigorous calculations are available for price probability, but delta serves as a handy “back of the envelope” approximation.We could buy an out-of-the-money Call with a low delta -- for example, 0.10. With that low delta, the option’s price would be lower, and we’d have greater leverage. But the tradeoff is a much lower probability of the stock being at the strike price or higher at expiration. We could have a much higher probability trade by buying a deep ITM option with a delta of 0.80. This second alternative would be less speculative as the high delta option will track the underlying much better and be a better proxy for the stock.Position DeltaPosition delta can estimate the profit or loss on an entire option position relative to $1 changes in the stock price.  This can be very helpful in assessing the directional risk of an entire position or even an entire portfolio.Position delta can be estimated as follows:Position Delta = Option Delta x Number of Contracts Traded x 100Position delta can tell us the actual dollar amount that we might expect a position or portfolio to change given a certain change in the underlying’s price.  Again, our trading platforms can be configured to do all these calculations.SummaryDelta estimates the change in the price of an option based on a change in the underlying stock price. It can give us an approximation for the probability that an option will expire in-the-money.  And lastly, delta can help traders assess directional risk on an entire position or portfolio.Sign up for my free trading newsletter so you don’t miss the next opportunity! want To Learn More About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   Our Options Specialist, Brian Benson, has been on fire. During the last month, of the last 13 trades he has made, 11 of them have finished in the money!If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
Major Indexes Continue To Be Outperformed By Energy & Metals

Major Indexes Continue To Be Outperformed By Energy & Metals

Chris Vermeulen Chris Vermeulen 13.04.2022 16:57
Recent rallies in the major indexes have had a hard time hanging onto their gains lately. ETFs like XOP (S&P Oil & Gas Exploration & Production), XME (S&P Metals & Mining), and XLU (Utilities) have been experiencing capital inflows. At the same time, other ETFs such as DIA (30-Industrials), SPY (500-Large Caps), IWM (2000-Small Caps), IYT (Transports), and QQQ (100-Nasdaq Largest Non-Financial) are still in the red for the year. Our positions in energy and precious metal ETFs netted us a positive return, while our recent trades in the major stock index ETFs had already booked partial position profits, with the remainder of the positions stopping out for a small break-even profit. Related article: UK Inflation: The increase has deepened the cost of living crisis in the UK As we experience record inflation numbers reported and central banks raising their lending rates, we are keeping our cash ready and closely monitoring key ETF sectors as compared to the major stock index benchmarks for clues regarding our location within the overall economic cycle. SPY – SPDR S&P 500 ETF TRUST – DAILY SECTOR COMPARISON CHART     www.TheTechnicalTraders.com – TradingView TACTICAL ETFs FOR ALTERNATIVE STRATEGIES    From time to time, we get questions from our subscribers regarding inverse and leveraged ETFs. Inverse and/or leveraged ETFs are not appropriate for everyone. However, for some experienced traders, these tactical ETFs can provide alternative strategies for use in a bear market. An inverse ETF is an exchange-traded fund (ETF) constructed by using various derivatives to profit from a decline in the value of an underlying benchmark. Inverse ETFs allow investors to make money when the market or the underlying index declines, but without having to sell anything short. A leveraged exchange-traded fund (ETF) is a marketable security that uses financial derivatives and debt to amplify the returns of an underlying index. While a traditional exchange-traded fund typically tracks the securities in its underlying index on a 1:1 basis, a leverage ETF may be structured for a 2:1 or even a 3:1 ratio. These ETFs listed below track the underlying S&P 500 benchmark that represents 500 US large caps as selected by S&P’s Index Committee. These ETFs are examples of both inverse and leveraged ETFs: SPY vs. SH (1:1 or 1x leverage) – SPY (Bull) is the most recognized ETF and is typically listed in the top ETFs for the largest AUM and greatest trading volume. SH (Bear) provides 1:1 inverse exposure to the S&P 500. SSO vs. SDS (2:1 or 2x leverage) – SSO (Bull) seeks a daily 2x return of the S&P 500. SDS (Bear) provides 2:1 inverse exposure to the S&P 500. UPRO vs. SPXU (3:1 or 3x leverage) – UPRO (Bull) seeks a daily 3x return of the S&P 500. SPXU (Bear provides 3:1 inverse exposure to the S&P 500. SPY – SPDR S&P 500 ETF TRUST – DAILY S&P 500 COMPARISON CHART The following chart gives us a visual of how the ETFs mentioned above are performing against each other over the past 15-months. It should be noted that inverse ETFs carry unique risks that traders should be aware of before participating in them. Some of the risks associated with inverse ETFs are compounding risk, derivative securities risk, correlation risk, and short sale exposure risk.    www.TheTechnicalTraders.com - TradingView KNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDED It is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and in the last six trades we entered in March, all have now been closed at a profit! Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Sign up for my free trading newsletter so you don’t miss the next opportunity! Successful trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success. Recommended: Terra USD (USDT), Shiba Inu (SHIB), Polygon (MATIC) Update. Take a Look at What Happened in the World of Cryptocurrency Today WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Utilities Rising & Transporters Sinking - Sector Rotation Is Providing Clues

Utilities Rising & Transporters Sinking - Sector Rotation Is Providing Clues

Chris Vermeulen Chris Vermeulen 11.04.2022 16:58
Historically, investors gravitate toward more defensive and commodity-focused sectors, such as precious metals, energy, commodities, and utilities, in late-cycle bull markets. Recently, the stock market is beginning to show us signs that the bull market may be coming to an end. Commodities such as energy, grains, and precious metals have all experienced nice rallies. Price action also confirms money flow coming out of transports and into utilities. SPY – SPDR S&P 500 ETF TRUST – DAILY COMPARISON CHART www.TheTechnicalTraders.com - TradingView As we review our cycle chart, please note the specific placement of the Transportation, Precious Metal, Energy, and Utilities sectors. We especially want to focus on the Transportation sector depreciating while the Utility sector appreciates. These sectors provide us with important clues as to where we are in the current economic cycle. www.TheTechnicalTraders.com UTILITIES SECTOR UP +7.50% YTD    In March 2022, the Dow Jones Utility Average crossed 1,000 for the first time in its nearly 100-year history as the utility sector is significantly outperforming the market this year. Many investors believe that the XLU is the most effective risk-reducing equity ETF available and may be looking to the utility sector as a safe-haven play. Other safe-haven markets that we are following closely are Gold, the U.S. dollar, and the Switzerland franc. XLU – SPDR SELECT SECTOR ETF UTILITIES– DAILY CHART www.TheTechnicalTraders.com - TradingView TRANSPORTATION SECTOR DOWN -15.92% YTD    The transportation sector has dropped approximately -21.59% from its peak in November 2021. Market cycles are measured from peak to trough. Generally, traders consider a stock index in a bear market when its closing price drops at least 20% from its peak. The move in the XLU from 100.00 to 80.00 also represents a drop of 33.33% of the total 2020-21 bull market move. On April 1st, the U.S. Department of Labor reported that the number of truck transportation jobs fell in March after 21 consecutive monthly gains. Then on April 8th, Bank of America (NYSE: BAC) downgraded multiple transportation stocks, citing “waving demand and price dives.” Bank of America analyst Ken Hoexter told clients, “Given deteriorating demand outlooks and rapidly falling freight rates, we downgrade ratings on 9 of the 28 stocks in our coverage universe”. The transportation index was created in July 1884 by Charles Dow and has long been viewed as a leading indicator of the broad market’s direction because economic demand shows up first in shipping orders. Historically, a down-turn in freight indicates a potential broad economic recession. XTN – SPDR S&P TRANSPORTATION ETF – DAILY CHART www.TheTechnicalTraders.com - TradingView KNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDED It is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and in the last six trades we entered this month, five have been closed at a profit, one remains open, and we have locked in partial profits on that one as well! Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Sign up for my free trading newsletter so you don’t miss the next opportunity! Successfully trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Greg Dickerson Podcast - Entrepreneurship, Investing, Real Estate, Coaching

Greg Dickerson Podcast - Entrepreneurship, Investing, Real Estate, Coaching

Chris Vermeulen Chris Vermeulen 08.04.2022 15:43
Greg DickersonSign up for my free trading newsletter so you don’t miss the next opportunity!Welcome to the Technical Traders podcast. The show that brings you technically proven strategies and trade ideas from experts around the world. We're going to help you make more money with less risk so that you can take your trading to the next level. Now here's your host, Jim Goddard.Jim Goddard: 00:49My guest is Greg Dickerson. He's the CEO of Dickerson International. You can find him online at dickersoninternational.com. Welcome to the show.Greg Dickerson: 01:00Hey, thanks for having me.Jim Goddard: 01:02Greg, where are you? And can you tell us a bit about Dickerson International?Greg Dickerson: 01:07I'm located in Charlottesville, Virginia, just outside of Washington, DC, home of the University of Virginia and the Darden School of Business, one of the top business schools in the country. Still, Dickerson International is my school of entrepreneurship. I've been an entrepreneur since 1997. And my long story short is I've bought, developed and sold over 250-million-real estate, started 12 different companies from the ground up, built and renovated hundreds of custom homes, commercial buildings, developed mixed subdivisions, things like that. So, that's me in a nutshell. So what I've done is I've packaged everything that I know and everything I've learned over the past 25 years doing all of those things into some online courses. And then, I also offer one-on-one coaching. I work with people all over the world, doing all kinds of things, teaching them how to be a real estate developer, how to invest in real estate, how to do big commercial and multi-family real estate deals, and how to raise capital. I teach people how to buy companies, how to start companies from the ground up, and how to grow and scale their existing businesses. So that's what I do and what Dickerson International is all about.Jim Goddard: 02:16Wow. So you take a good idea, and you make it bigger and better.Greg Dickerson: 02:21Exactly. I love to build things. I'm a builder. I'm a natural-born entrepreneur. I started as a young kid knocking on doors. I'm talking, you know, seven, eight years old, cutting grass, raking leaves, washing cars, babysitting your kids, whatever you needed to get it done. I would knock on your door and say, Hey, my name's Greg. I live down the street, and I need to make some money. And my dad taught me at a young age; that if you want something, you need to go figure out how to make the money to buy it because I'm not going to give it to you. So, I wasn't raised, you know, we were a middle-class family. My dad was career military. Nobody in my family were entrepreneurs. And you know, that's just how I am wired. And I love to create. I love to build things. I love to solve problems. Make something out of nothing, and that's what entrepreneurs do. We make things happen and get things done. We solve problems, and it's very creative. It's a lot of fun. Every day's different, and every situation's different. And like I said, I work with people all over the world doing all kinds of different things. So it's very intellectually stimulating for me.Jim Goddard: 03:17So how did you get started with investing?Greg Dickerson: 03:22So back in 2008, 2009, my career was mainly creating small businesses to generate cash and to invest in other assets. And for me, I was a remodeling handyman contractor and ended up turning that into a $30 million building development business in about seven years. And I built 12 other companies along the way at the same time. And as I did all that 2008, 2009 happened, that I had to pivot. And I didn't know anything about stocks, really. I kind of followed markets a little bit, but I had never invested in stocks, never invested in anything like that. When 2008, 2009, it happened. I had a good friend who had a restaurant down in the area where I was located, and he came from Wall Street and left that career and opened a little breakfast joint.Greg Dickerson: 04:07I was living on the outer banks of North Carolina at the time, which is where flight originated, where the Wright brothers took off. And he said, Greg, you said, you know, this is an opportunity to create generational wealth like we've never seen. I'm like, what are you talking about? He said the market is crashing. It's about to hit rock bottom, and we can get in now. And, you know, everything you've ever needed to pay for will be taken care of with just a small investment. So we got together in his little breakfast shop and started watching the markets and trading stocks. And I made my first investment at the bottom of March 2009 when the Dow was 6,000 and the S&P was 600. And I was buying Ford. I think my first purchases were Ford stock at a $1.90, City Bank at like $1.19, Bank of America, I don't know, $1.00 something. So that was my first foray into traditional markets.Jim Goddard: 04:58Is there anybody you really admire or who influenced you to become involved in real estate, financial markets, or coaching?Greg Dickerson: 05:06Yeah, so it all started with Rich Dad, Poor Dad. That was the first book that I read that really opened my mind to, you know, creating businesses that generate cash to invest in other assets. When I read that book, I wanted to be a rich dad. I didn't want to be Robert Kiyosaki. I wanted to be the rich dad that he was talking about. Because he owned all the real estate. He had all the businesses, and he was making all the investments. So you know, I studied that, and that's where I just said, okay, that's what I'm going to do. And then, of course, back in the day, Donald Trump was hot in terms of his real estate, so I read his book for real estate. I read Sam Zelle, you know, there were a few other real estate investors that I had followed.Greg Dickerson: 05:43And then, of course, Warren Buffet for stocks, he was all the rage back then, for stock markets still is, I guess, but really back then he was really carving a path in stocks and then of course, you know, other people along the way, but the big core, pivot point for me was reading Rich Dad, Poor Dad. That's where that really opened my mind to understanding how to put a lot of assets together, generate cash flow to pay for the things you need to sustain your life, and then invest the rest.Jim Goddard: 06:12What's your investing philosophy? What set of principles, beliefs, or experiences drive your decisions?Greg Dickerson: 06:20I'm opportunistic. So I look for value wherever I can find it. And I like to make fewer bigger moves. I like to get in at the bottom. So you know, in stocks, it was 2008, 2009, and then I made big moves on every major pullback in the markets, including March 2020, that was my last big deployment of capital into the markets. And those are the types of things that I look for because I've been around long enough in cycles in real estate and stocks where good times never last and bad times never last. So I look for the big pullbacks, and that's where I make nice moves, and then I exit at the top. So my main philosophy that I always tell everybody is that it's more important to know the top than the bottom.Greg Dickerson: 07:03And I exit at the top, take my chips off the table. I'm not afraid to go to cash and sit in cash and wait, so from equities, that's kind of how I make those moves, and I compound cash. That's always my goal to grow and scale a pile of cash real estate; it's been the same way. I want to buy value, add value, create value, and then exit when the time is right. So that's kind of how I approach things and look at things. And from a real estate standpoint, it could be from the ground up. It could be adaptive reuse; it could be a major value add. I'm not a margin player. I'm not looking for yield. I'm not a yield guy; I'm a margin guy. So I'm looking for big moves, big margins, not little yields.Jim Goddard: 07:44How important is it for a person to have some kind of philosophy they stick to when they're investing?Greg Dickerson: 07:52It's extremely important. So that's the key to success in any business, any investment, you need to have a thesis, and you need to have the discipline to stick to your thesis, and you need to be self-aware enough to where if your thesis is wrong or not working, you need to pivot and make a new one. But if you're day trading or swing trading, obviously you need a system, and you need the technicals that you operate by, and you want to journal those things and stay steady with that approach. And if you're more opportunistic like me, then you just stick to your entry and exit valuations and your margins so that you know that you're covered. So it's extremely important. Discipline is huge.Jim Goddard: 08:29We'll have more with Greg Dickerson right after this.TheTechnicalTraders.com: 08:33Did you miss the huge gains in growth and momentum stocks with your trading? Do you want to own the hottest stocks and sectors during the next stock market rally, the Ban best asset now trading alert newsletter will let you know which stocks to own, including entry targets and protective stock prices; visit www.bantrader.com to learn more.Jim Goddard: 08:55Welcome back. We're speaking with Greg Dickerson. Greg, are there any investment myths that people should know about?Greg Dickerson: 09:06I really don't know. I mean, you hear that you see that. And then, of course, you hear Santa Claus rallies, and we didn't have that this year. I don't know that those things hold true. They might. I haven't really tracked them and backcheck them. But if you are going to adhere to something like that and buy into it, you definitely want to fact-check it and make sure that it's accurate. And from what we've seen in the markets, really nothing is. Markets are cyclical. You know, these days, headline risk, you know, headlines can move markets in a major way. It's a very different market now than it used to be. But like I say, the most important thing to know is the top. And I called the top 2018, 2019. I called the top recently back in November, December, and I invested in crypto as well as equities and real estate. So again, the key is to know that top.Jim Goddard: 09:57What favorite type of analysis or indicator do you find helps you time your investments?Greg Dickerson: 10:03In the markets, you know, it's major moves. So I look for when I'm deploying, I'm looking for 10% or better pullbacks to make big moves on in terms of stocks and equities. Crypto's a little different because crypto can correct 30, 40%. So I just look for those major pullbacks that are moving to previous, you know, support and resistance levels. I look at the moving averages; of course, the 200 days is a big one. Major moving averages and some, you know, retracement levels are kind of important when you're looking at stocks and swing trading and, you know. And then, I also look at the macro. A lot of people say, show me the charts, and I'll tell you the news. Well, news moves markets, especially right now with the geopolitical climate, with interest rate fed policy, we've been in a bull market since 2009 and, an easy Fed, monetary policy environment. So very different climate that we're getting ready to move into now. So you really have to pay attention to the macro as well. So I look at the macro, then I take that, apply technicals to it and make my decisions based on that. But if I'm looking to deploy, I want to deploy on at least a 10% or better pullback in the equities.Jim Goddard: 11:17You talked about a big influence in your life in the book Rich Dad, Poor Dad; any other recommended reading you could give our listeners.Greg Dickerson: 11:26Yeah. So it depends on what you're looking to do. Generally, what I've done in my career is I've found the best in the businesses doing what I want to do, and I go study them. So I love to read biographies. So I've recently read a great biography—Steve Schwartzman, Michael Eisner, Warren Buffet, Sam Zelle. Donald Trump; love him or hate him early in his career. I read how he did what he did. So Keith Hall a big developer in Texas. So, you know, I'd love to read biographies, some books, and learn from people you know, the intelligent investor by Ben Graham. Although, you know, today's world is very different from those guys grew up in, in terms of value investing and things.Greg Dickerson: 12:10Of course, as we know, valuations have been kind of out the window. But as far as business and mindset books, all of the greats. So my core three books that really changed my life were Rich Dad, Poor Dad, Think and Grow Rich by Napoleon Hill, and the Power Positive Thinking by Norman Vincent Peale. So those two books, especially, and then How to Win Friends and Influence People, Dale Carnegie. But you know, anything by those guys and then all the classics like Anthony Robbins, Zig Ziegler, Jim Rohn, Brian Tracy. All of the sales, success, and mindset gurus, if you want to call them. But I'm very highly self-educated. I'm really into personal, professional development. I've never had any music on any of my devices, going all the way back to the Sony Walkman. It was all business books and mindset, personal, professional development. And then the, you know, then the CD Walkman, and then, you know, I've got the 80-gig iPod, nothing but business books on it. And then even today, that's all I listen to or you know, like this business podcast and podcast, things like that.Jim Goddard: 13:19If you're an investor or potential client for somebody, how can you spot a scam? You've been around long enough; I'm sure you can sniff one out in a second, but for people getting into investing, so many people say things like guaranteed returns, and you've been around long enough, so you know, there is no such thing. How do you sniff them out?Greg Dickerson: 13:39Well, that's one, if somebody's offering a guarantee or can't fail, if it sounds too good to be true, those types of things. In today's world, there are some things that are too good to be true that actually work. But, as far as the individual goes, if they don't know their business and know their numbers at an intimate level, then that's a red flag. You know, if somebody's desperate for the deal, you have to send your money today, or you're going to miss out. You know, that's a red flag. And then, of course, you know, anybody who's guaranteeing anything or telling you that, you know, the number just goes up that they're doesn't go down, and it's never going down, and it will never go below a certain level. Those types of things are red flags. But, you know, today it's pretty tricky. There are a lot of scams out there and very sophisticated scams.Jim Goddard: 14:23What's the best advice you ever received?Greg Dickerson: 14:26Never stop learning.Jim Goddard: 14:30Simple as that.Greg Dickerson: 14:32Simple as that, never stop learning. And I mean, there are all kinds of different pieces of wisdom I've received along the years. But one thing I've learned in my career is the more you know, the more you realize you don't know, and it's what you don't know that really holds you back. But even more important to that, you know, Mark Twain, "it's what you think, you know, that just ain't so." You know, that can get you. Knowledge is everything. And then, you know, the application of that knowledge to the right vehicle at the right time and the right way with the right amount of leverage, you know, is really the key. But yeah, at the end of the day, I would not be where I'm at if I had not continued my education and just kept pouring into myself. So when you sum it all up, that's probably the best advice I've ever received is just never stop learning. Never think that you've arrived. You can always go deeper. You can always learn more, and there's always something out there that you absolutely don't know that can just be a game-changer for you.Jim Goddard: 15:28My two favorite Mark Twain sayings, "the hardest thing in the world is to convince a fool that they've been fooled" and "golf, a perfectly good walk ruined." Is there something you wish you would've known before you started trading and investing?Greg Dickerson: 15:49Yes, I mean, a lot more. I didn't know anything before I started trading and investing. So, you know, I wish I would've had more education early on in that regard, you know, what I knew back then was work hard. You know, the harder you work, the better opportunities you're going to have. So I just didn't know what I didn't know. So what I wish I knew back then was obviously what I know now was that you know how to raise capital and do bigger deals early on that I just didn't think I could do. But when it comes to investing in, you know, equities and things like that, I just didn't know. I just didn't know anything about stocks, didn't know anything about the markets and, you know, gold. I had one guy, you know, years ago it was probably 2004. The gold bugs around me were all older and, you know, 200, 300 ounces back then, and they were telling me Gold's going to hit 1200 an ounce. And I'm like, you're crazy. And man, if I would've put a little chunk of change in gold back then, it would've worked out pretty good.Greg Dickerson: 16:43And then, of course, the big one, I didn't know anything about Bitcoin or cryptocurrency when that came around and, you know well, I would've loved to have known about that ten years ago and put, you know, a thousand bucks in 10 years ago would be worth some billions of dollars right now.Jim Goddard: 16:56Sure. Are non-fungible tokens, are they in the same category as Bitcoin was 12 years ago?Greg Dickerson: 17:06No, no, not at all. Bitcoin's a very different thing in and of itself. It's a digital gold. It's digital property. So it's very different than NFTs. NFTs are a lot of different things, but Bitcoin is one thing, and it's a limited supply of one thing that'll ever be created. And it's got a certain amount of interest at an institutional level, where NFTs are fads and trends that will come and go.Jim Goddard: 17:35Before we go, is there any topic or financial or business practice that you're really passionate about?Greg Dickerson: 17:43In terms of business practice, leadership, obviously, that's one of the keys to the success that I've had is developing myself into a great leader and teaching and helping other people do that from a business practice and, from an investment standpoint, just, curiosity in general, just always being curious, always trying to figure out why and how things work and, you know, understanding that everything these days, it's all trends. Markets are cyclical; things come and go, good times never last and bad times never last. It's all about the trend, understanding the trend, and investing and taking advantage of that trend and not going against it.Jim Goddard: 18:21Greg, thank you so much for being here on technical traders.Greg Dickerson: 18:25I appreciate it. Thank you for having me.Jim Goddard: 18:27My guest has been Greg Dickerson, CEO of Dickerson International. You can find him online at dickersoninternational.com. I'm Jim Goddard.TheTechnicalTraders.com - your source for technically proven strategies.The technical trader’s podcast or an expression of opinion only, and should not be construed as investment advice or recommendations to buy or sell any financial instrument. This information is for general information and educational purposes. Only guests on the show are not compensated for their participation to view our full disclaimer, visit our website: www.TheTechnicalTraders.comGreg Dickerson Podcast Videohttps://youtu.be/kP4MZrY1c9Y
U.S. Dollar (USD) Is On Our Radar!

U.S. Dollar (USD) Is On Our Radar!

Chris Vermeulen Chris Vermeulen 06.04.2022 21:36
Since the USD plays such a strong role in global economics, we thought it appropriate to see how the USD performance is vs. other currencies and investments.For the U.S. consumer, a strong USD means U.S. goods are more expensive in foreign markets. For U.S. companies that buy or sell products/services globally, a strong USD means they are less competitive. A strong dollar is a significant headwind that erodes the profits of U.S. multinationals.Since we trade and invest in ETFs, it is especially interesting to see how the USD has been trading in 2022 compared to Gold (GLD), the S&P 500 (SPY), and the Nasdaq 100 (QQQ). Gold is the top performer, followed by the Australian dollar (AUD) and the U.S. dollar (DXY). We can also see on the following chart the recent recovery rally in both the SPY and QQQ. Amazingly the QQQ has recovered half of its 2022 loss in just the last few weeks.DXY – US DOLLAR CURRENCY INDEX – DAILY COMPARISON CHART   www.TheTechnicalTraders.com - TradingViewU.S. DOLLAR VS MAJOR CURRENCIES PERFORMANCE MIXEDThe following chart from www.finviz.com shows us that the USD has strengthened vs. the Japanese yen, Eurodollar, British pound, and Switzerland franc. But also that the USD has weakened vs. the Australian dollar, New Zealand dollar, and the Canadian dollar.The AUD, NZD, and CAD reflect the impact of rising energy and commodity prices. The JPY reflects Japan’s negative interest rate as well as its dovish economic policy. While the EUR, GBP, and CHF are suffering from capital outflows due to the impact of Europe’s Russia Ukraine war.US DOLLAR YEAR TO DATE RELATIVE PERFORMANCE VS MAJORSwww.finviz.comUS DOLLAR APPRECIATED +11.19%Since May 25, 2021, the USD has been steadily appreciating as a stand-alone market. We can also see that the USD has been in a bullish upward-sloping channel. The USD has offered many buying opportunities at both its bottom trendline as well as its Fibonacci support levels. It continues to make higher highs and higher lows.The USD remains attractive as it is the primary reserve currency for government central banks. The FED, with its recent rate hike, has signaled that it is planning on additional increases. The USD is considered a safe-haven investment and benefits from rising energy prices as the U.S. is a major producer of global oil and natural gas.DXY – US DOLLAR CURRENCY INDEX – DAILY CHARTwww.TheTechnicalTraders.com – TradingViewAUSTRALIAN DOLLAR GAINED +45.15%The Australian dollar enjoyed a strong rally in 2020 as it gained more than +45%. After hitting resistance at its 1.618 Fibonacci extension, the AUD corrected about 38% of its up-swing. This correction ended when buying resumed at the AUD previous high or the 1.000 support level. Since Jan 2022, the AUD has already appreciated about 9%. This is similar in both percentage and time frame to the S&P 500 (SPY) and the Nasdaq 100 (QQQ) equity markets.AUD USD – AUSTRALIAN DOLLAR VS US DOLLAR – DAILY CHART   www.TheTechnicalTraders.com – TradingViewKNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers and of the last five trades we entered, three have been closed at a profit! Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! Successfully trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success.WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Waiting For GLD To Make New Highs - Gold Rally Is Still Intact

Waiting For GLD To Make New Highs - Gold Rally Is Still Intact

Chris Vermeulen Chris Vermeulen 04.04.2022 16:51
The calm of the last 3-weeks has resulted in a risk-on environment. This, in turn, has led to a nice recovery rally in stocks. For the time being, volatility has subsided. However, we believe there are many underlying market risks that can still resurface without any warning.From late 2015 to August 2020, the price of gold doubled, going from approximately $1040 to $2080. Gold then experienced a profit-taking $400 pullback. Gold’s rally over the past 12-months failed to break through its $2080 price level. After retreating back to $200, gold seems to have found support at the $1900 level.In reviewing the following spot gold chart, it appears we have broken out of an accumulation phase and seem to be preparing to move above the $2080 high.XAUUSD – GOLD SPOT / U.S. DOLLAR – WEEKLY CHARTwww.TheTechnicalTraders.com - TradingViewGLD-ETF RALLIED +22% OVER THE LAST 12-MONTHSGLD – SPDR Gold Shares is the largest physically-backed gold exchange-traded fund (ETF) in the world. According to its founder, State Street Global Advisor’s website www.spdrgoldshares.com “the economic forces that determine the price of gold are different from the economic forces that determine the price of many other asset classes such as equities, bonds or real estate.”Utilizing the (www.tradingview.com) Fibonacci projection tool, we see that the GLD price accumulation from July 2016 through August 2018 resulted in a 2-year rally and a profit of $82 or an approximate gain of +73%.Additionally, we see that the GLD top made in August 2020 was at the Fibonacci 4.618 level of $193.44. The 7-month correction in GLD found support at the Fibonacci 2.618 level of $157.98. The rally in GLD during the last 12-months also failed a second time at the Fibonacci 4.618 level.GLD now appears to have broken out of its accumulation phase and seems to be preparing to trade above the $194 high.GLD – SPDR GOLD SHARES - NYSE – WEEKLY CHARTwww.TheTechnicalTraders.com – TradingViewNEWMONT MINING RISES ABOVE $75Newmont - Gold Mining Company (NEM) is up +33.46% year to date compared to the S&P 500 -4.62%. According to www.newmont.com, “Newmont is the world’s leading gold company and a producer of copper, silver, zinc, and lead.Newmont’s bull market started back in September 2015. During the past 6-years, Newmont’s stock price has experienced several strong rallies that ranged from +$30 to +$40 each. Newmont’s recent price level is now four times greater than the low it made in 2016.Utilizing the same Fibonacci tool, but this time measuring from the $15 lows to the $30 lows, we learn that Newmont had a strong reaction down after reaching the key $75 level. However, this reaction found buying support at the Fibonacci 2.618 level of $52.67. Newmont has since rallied by $30, which has allowed its price to blow through its previous $75 top resistance level.Newmont may be showing us that the gold spot and the GLD-ETF will both make new highs.NEM – NEWMONT ‘GOLD MINING’ - NYSE – DAILY CHARTwww.TheTechnicalTraders.com – TradingViewKNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and somewhat surprisingly, we entered five new trades last week, four of which have now hit their first profit target levels and two of which have now been closed at a profit. Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! Successfully trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success.WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Many Of Us Are Into US Bonds. Let's Have A Look At The Inverted Curve

Many Of Us Are Into US Bonds. Let's Have A Look At The Inverted Curve

Chris Vermeulen Chris Vermeulen 04.04.2022 13:18
The worldwide bond market – including private and government debt -- currently represents about $120 trillion in outstanding obligations. The United States accounts for roughly $46 trillion (39%). The U.S. government finances its spending by collecting taxes and issuing debt. More specifically, the U.S. Treasury funds deficit spending by issuing debt instruments with a range of maturities. Treasury Bills have maturities from one month to one year. Treasury Notes have maturities from two to ten years. Very long-term debt is issued as Treasury Bonds with 20- and 30-year maturities. Treasury yields rise and fall depending on demand and expectations for the economy over various timeframes. Competitive bidders set yields in a “primary market” auction process with an inverse relationship between prices and yield. Note that market participants, not the U.S. Federal Reserve (a.k.a. Fed), determine these prices and yields. The Fed sets a target for a very short-term (overnight) Fed Funds Rate and a Discount Rate. Their policy of lowering or raising those rates holds significant influence but does not have direct control over the debt auctioning process. The yield curve plots the current yield of a range of government notes and bonds in the “primary market.” Here’s a U.S. yield curve plot showing both a normal and an inverted curve. The red line shows what is typically viewed as a “normal” curve where longer-term debt has a higher yield than shorter-term debt. That reflects a view that inflation will erode returns over a longer period, and therefore, a higher yield is expected. The blue line shows an inverted curve where shorter-term debt has a higher yield than longer-term. Why Does the Curve Invert? The yield curve is typically described as steepening, flattening, or inverting. A steep curve reflects expectations of higher inflation and interest rates that come with a more robust economy. The curve typically flattens or even inverts when Fed policy is in a tightening cycle of raising rates in the near term. That implies that investors have less confidence in the longer-term economic outlook and expect that the Fed may have to cut rates at some point in the future to stimulate the economy. What Does an Inverted Curve Mean? In the past 60 years, every U.S recession has been preceded by at least a partially inverted yield curve. That delay has ranged between 6 and 36 months with an average of 22 months. But every yield curve inversion has not been followed by a recession. As a predictor of a recession, an inverted yield curve suggests but does not guarantee a recession. Remember that a recession is technically defined as two successive quarters of negative GDP growth. There can undoubtedly be economic slowdowns that are shallow and temporary that do not qualify as a full-blown recession. Perhaps it’s more accurate to say that an inverted yield curve is a relatively reliable predictor of an economic slowdown but not necessarily a recession. Is it Different This Time? Maybe. Over the last two years, the Fed took a very unusual step of implementing “Quantitative Easing” to stimulate economic recovery after the “Covid Crash” in March 2020. The Fed has been adding to its balance sheet by buying longer-dated bonds. As the economy has strengthened, the Fed has announced that it will shift to selling bonds to reduce its balance sheet. Many observers think that this action by the Fed has kept the long-term yields -- in particular, the 10-year -- artificially low, and those yields are likely to rebound when the Fed stops selling its excess. If that were to happen, then the yield curve could suddenly steepen. There’s also debate over which parts of the yield curve to compare. Historically, comparing the 2- and 10- year yields (the “2/10”) has been a widely used benchmark. Some observers say comparing 3-month and 10-year yields is a better indicator. And without an inversion in the 3mo/10yr, there is much more doubt about an imminent recession. What Does This Mean for Stocks? We shouldn’t make investing decisions based just on the yield curve discussion. It’s certainly interesting. And it may well be a predictor of an economic slowdown if not a recession. But it is only one piece of a many-pieced puzzle. As a trader and investor, I focus more on technical indicators of stock price action and stock index valuations. Even in a recession, some sectors do well while others do poorly. Money is always moving. That’s the ball that I’m keeping my eye on.
Yield Curve 101 - Steep, Flat, Inverted - What's The Difference?

Yield Curve 101 - Steep, Flat, Inverted - What's The Difference?

Chris Vermeulen Chris Vermeulen 31.03.2022 21:51
The yield curve plots the current yield of a range of government notes and bonds in the “primary market.” The worldwide bond market – including private and government debt -- currently represents about $120 trillion in outstanding obligations. The United States accounts for roughly $46 trillion (39%).The U.S. government finances its spending by collecting taxes and issuing debt. More specifically, the U.S. Treasury funds deficit spending by issuing debt instruments with a range of maturities. Treasury Bills have maturities from one month to one year. Treasury Notes have maturities from two to ten years. Very long-term debt is issued as Treasury Bonds with 20- and 30-year maturities. Treasury yields rise and fall depending on demand and expectations for the economy over various timeframes. Competitive bidders set yields in a “primary market” auction process with an inverse relationship between prices and yield. Note that market participants, not the U.S. Federal Reserve (a.k.a. Fed), determine these prices and yields. The Fed sets a target for a very short-term (overnight) Fed Funds Rate and a Discount Rate. Their policy of lowering or raising those rates holds significant influence but does not have direct control over the debt auctioning process.Here’s a U.S. yield curve plot showing both a normal and an inverted curve. The red line shows what is typically viewed as a “normal” curve where longer-term debt has a higher yield than shorter-term debt. That reflects a view that inflation will erode returns over a longer period, and therefore, a higher yield is expected. The blue line shows an inverted curve where shorter-term debt has a higher yield than longer-term. Why Does the Curve Invert?The yield curve is typically described as steepening, flattening, or inverting.A steep curve reflects expectations of higher inflation and interest rates that come with a more robust economy.The curve typically flattens or even inverts when Fed policy is in a tightening cycle of raising rates in the near term.  That implies that investors have less confidence in the longer-term economic outlook and expect that the Fed may have to cut rates at some point in the future to stimulate the economy.What Does an Inverted Curve Mean?In the past 60 years, every U.S recession has been preceded by at least a partially inverted yield curve. That delay has ranged between 6 and 36 months with an average of 22 months.But every yield curve inversion has not been followed by a recession.  As a predictor of a recession, an inverted yield curve suggests but does not guarantee a recession. Remember that a recession is technically defined as two successive quarters of negative GDP growth.  There can undoubtedly be economic slowdowns that are shallow and temporary that do not qualify as a full-blown recession. Perhaps it’s more accurate to say that an inverted yield curve is a relatively reliable predictor of an economic slowdown but not necessarily a recession.Is it Different This Time?Maybe.  Over the last two years, the Fed took a very unusual step of implementing “Quantitative Easing” to stimulate economic recovery after the “Covid Crash” in March 2020.   The Fed has been adding to its balance sheet by buying longer-dated bonds.  As the economy has strengthened, the Fed has announced that it will shift to selling bonds to reduce its balance sheet. Many observers think that this action by the Fed has kept the long-term yields -- in particular, the 10-year -- artificially low, and those yields are likely to rebound when the Fed stops selling its excess.  If that were to happen, then the yield curve could suddenly steepen.Sign up for my free trading newsletter so you don’t miss the next opportunity! There’s also debate over which parts of the yield curve to compare.  Historically, comparing the 2- and 10-year yields (the “2/10”) has been a widely used benchmark.  Some observers say comparing 3-month and 10-year yields is a better indicator.  And without an inversion in the 3mo/10yr, there is much more doubt about an imminent recession.What Does This Mean for Stocks?We shouldn’t make investing decisions based just on the yield curve discussion.  It’s certainly interesting and it may well be a predictor of an economic slowdown if not a recession.  But it is only one piece of a many-pieced puzzle.  As a trader and investor, I focus more on technical indicators of stock price action and stock index valuations.  Even in a recession, some sectors do well while others do poorly.   Money is always moving. That’s the ball that I’m keeping my eye on.want To Learn More About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
Can Tracking Global Money Flow Provide Clues To Stay In The Black?

Can Tracking Global Money Flow Provide Clues To Stay In The Black?

Chris Vermeulen Chris Vermeulen 30.03.2022 21:43
According to The Bank of International Settlements, the global foreign currency exchange (FX) daily transactional turnover averages $6.6 trillion. At Technical Traders, we track a variety of markets, asset classes, and global money flow looking for clues that will help us in our quest for ETF returns. Interestingly when foreign exchange is charted as a benchmark to the SPY (S&P 500), we can see that FX has also been in a risk-on environment for the past 2-years.Recently we looked at volatility utilizing the CBOE Volatility Index known as VIX. But there are alternative ways or tools that we can use to analyze asset prices.GLOBAL MONEY FLOW HAS BEEN RISK-ONAs seen in energy, metals, food commodities, and real estate, the recent surge in inflation has also been taking place in foreign exchange. Commodity currencies typically refer to the Australian, New Zealand, and Canadian dollar. To a certain extent, the U.S. dollar as well due to its global ranking as one of the top producers of worldwide oil and gas.Typically, a currency like the Australian dollar will experience global money in-flows in a risk-on environment. Whereas in a risk-off environment, the opposite occurs as money flows out of currencies like the Australian dollar and back into what are considered safe-haven currencies like the Swiss franc, Japanese yen, and the U.S. dollar.Recently money has been re-allocating to different assets as global investors seek returns. The FX markets have also benefited from capital in-flows. Looking at the last 2-years, beginning from the Covid lows put in on March 2020, we see the SPY went from a -30% loss to early January, where the SPY touched +50%.Interestingly, the AUDJPY (Australian dollar vs. Japanese yen) went from -15% to more than +20% or a total change of 35% during the same timeframe. But how do we utilize this information to determine where we are in the current market cycle? Let’s walk through this process together to see what clues the FX market may have to guide our ETF selection and trading.AUDJPY VS SPY – DAILY CHARTwww.TheTechnicalTraders.com - TradingViewGBPJPY REACTS TO 6-YEAR UPPER CHANNEL RESISTANCEBased on the historical analysis, the GBPJPY (British pound vs. Japanese yen) tends to track the SPY, and therefore we will do a quick breakdown of the GBPJPY.Immediately we can see on the following monthly chart that the GBPJPY reacts nicely to its 72-month or 6-year upper and lower channel. In 2011 the GBPJPY made a low and turned up at its 6-year lower channel.During the 2015 to 2016 time frame, the GBPJPY then put in a head and shoulders top formation over a 12-month period at the 6-year upper channel. It’s important to note that the head of the top was at 166.6% of the GBPJPY all-time low in the GBPJPY, and the shoulders were made at the Fibonacci 161.8% of the GBPJPY all-time low.The 2016 drop was 17-months down, and the 2017 reaction back up was 17-months up. The 2019-20 drop was 26-months down, and to date, the 2020-21 move back up has just completed 26-months up. Note: indicator includes or counts both the low-month and the high-month in its counts. The main point here is that the GBPJPY, in its recent past, has been mirroring its previous price wave.Both 2016 and 2017 lows were made at 50% of the GBPJPY all-time high. But the 2020 low also turned at the 6-year lower channel.Now we find the GBPJPY currently reacting to its 6-year upper channel after booking a 26-bar (month) rally.It is important to note that this article is written to give us insights into some alternative research to challenge us to find clues in price. Time will provide confirmation of this research or not, but if the price continues to react at these levels, we may need to consider that market psychology or trend may be beginning to shift.GBPJPY – BRITISH POUND VS JAPANESE YEN – MONTHLY CHARTwww.TheTechnicalTraders.com: GBPJPY - Daily Chart - FXCM Trading StationLEARN HOW TO USE PRICE TO DETERMINE TRENDAs technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers. Somewhat surprisingly, we entered five new trades last week, four of which have now hit their first profit target levels and two of which have now been closed at a profit. Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity!Being successful at trading is more than knowing when to buy or sell. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing along with the utilization of stop-loss orders can help preserve your valuable investment capital. Taking profits in stages by scaling out of positions and when appropriate moving stop-loss orders to breakeven can further boost your trading performance with the benefit of reducing your portfolio risk.WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Volatility Retreats As Stocks & Commodities Rally

Volatility Retreats As Stocks & Commodities Rally

Chris Vermeulen Chris Vermeulen 28.03.2022 21:32
The CBOE Volatility Index (VIX) is a real-time index. It is derived from the prices of SPX index options with near-term expiration dates that are utilized to generate a 30-day forward projection of volatility. The VIX allows us to gauge market sentiment or the degree of fear among market participants. As the Volatility Index VIX goes up, fear increases, and as it goes down, fear dissipates.Commodities and equities are both showing renewed strength on the heels of global interest rate increases. Inflation shows no sign of abating as energy, metals, food products, and housing continues their upward bias.During the last 18-months, the VIX has been trading between its upper resistance of 36.00 and its lower support of 16.00. As the Volatility Index VIX falls, fear subsides, and money flows back into stocks.VIX – VOLATILITY S&P 500 INDEX – CBOE – DAILY CHARTSPY RALLIES +10%The SPY has enjoyed a sharp rally back up after touching its Fibonacci 1.618% support based on its 2020 Covid price drop. Money has been flowing back into stocks as investors seem to be adapting to the current geopolitical environment and the change in global central bank lending rate policy.Resistance on the SPY is the early January high near 475, while support remains solidly in place at 414. March marks the 2nd anniversary of the 2020 Covid low that SPY made at 218.26 on March 23, 2020.SPY – SPDR S&P 500 ETF TRUST - ARCA – DAILY CHARTBERKSHIRE HATHAWAY RECORD-HIGH $538,949!Berkshire Hathaway is up +20.01% year to date compared to the S&P 500 -4.68%. Berkshire’s Warren Buffet has also been on a shopping spree, and investors seem to be comforted that he is buying stocks again. Buffet reached a deal to buy insurer Alleghany (y) for $11.6 billion and purchased nearly a 15% stake in Occidental Petroleum (OXY), worth $8 billion.These acquisitions seem to be well-timed as insurers and banks tend to benefit from rising interest rates, and Occidental generates the bulk of its cash flow from the production of crude oil.As technical traders, we look exclusively at the price action to provide specific clues as to the current trend or a potential change in trend. With that said, Berkshire is a classic example of not fighting the market. As Berkshire continues to make new highs, its’ trend is up!BRK.A – BERKSHIRE HATHAWAY INC. - NYSE – DAILY CHARTCOMMODITY DEMAND REMAINS STRONGInflation continues to run at 40-year highs, and it appears that it will take more than one FED rate hike to subdue prices. Since price is King, we definitely want to ride this trend and not fight it. It is always nice to buy on a pullback, but the energy markets at this point appear to be rising exponentially. The XOP ETF gave us some nice buying opportunities earlier at the Fibonacci 0.618% $71.78 and the 0.93% $93.13 of the COVID 2020 range high-low.Remember, the trend is your friend, as many a trader has gone broke trying to pick or sell a top before its time! Well-established uptrends like the XOP are perfect examples of how utilizing a trailing stop can keep a trader from getting out of the market too soon but still offer protection in case of a sudden trend reversal.XOP – SPDR S&P OIL & GAS EXPLORE & PRODUCT – ARCA – DAILY CHARTKNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and somewhat surprisingly, we entered five new trades last week, four of which have now hit their first profit target levels. Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! Furthermore, successfully trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success.WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
What Will Be The Impact Of Rising Rates On Stocks & Commodities?

What Will Be The Impact Of Rising Rates On Stocks & Commodities?

Chris Vermeulen Chris Vermeulen 23.03.2022 21:33
Investors and traders alike are concerned about what investments they should make on behalf of their portfolios and retirement accounts. We, at TheTechnicalTraders.com, continue to monitor stocks and commodities closely due to the Russia-Ukraine War, market volatility, surging inflation, and rising interest rates. Several of our subscribers have asked if changes in monitor policy may lead to a recession as higher rates take a bigger bite out of corporate profits.As technical traders, we look exclusively at the price action to provide specific clues as to the current trend or a potential change in trend. We review our charts for both stocks and commodities to see what we can learn from the most recent price action. Before we dive into that, let’s review the various stages of the market; with special attention given to expansion vs. contraction in a rising interest rate environment which you can see illustrated below.PAY ATTENTION TO YOUR STOCK PORTFOLIOWe are keeping an especially close eye on the price action of the SPY ETF. The current resistance for the SPY is the 475 top that happened around January 6, 2022. This top was 212.5% of the March 23, 2020, low that was put in at the height of the Covid global pandemic.The SPY found support in the 410 area at the end of February. If you recall (or didn't know), 410 was the Fibonacci 1.618 or 161.8% percent of the Covid 2020 price drop. Now, after experiencing a nice rally back, of a little over 50%, we are waiting to see if the rally can continue or if rotation will occur, sending the price back lower.COMMODITY MARKETS SURGEDThe commodity markets experienced a tremendous rally due to fast-rising inflation, especially energy, metals, and food prices.The GSG ETF price action shows that we recently touched 200%, or the doubling of the April 21, 2020, low. Immediately following, similar to the SPY, the GSCI commodity index promptly sold off only to then find substantial buying support at the Fibonacci 1.618 or 161.8 percent of the starting low price of the bull trend. Resistance for the GSG is at 26, and support is 21.A STRENGTHENING US DOLLARThe strengthening US dollar can be attributed to investors seeking a safe haven from geopolitical events, surging inflation, and the Fed beginning to raise rates. The US Dollar is still considered the primary reserve currency as the greatest portion of forex reserves held by central banks are in dollars. Furthermore, most commodities, including gold and crude oil, are also denominated in dollars.Consider the following statement from the Bank of International Settlements www.bis.org ‘Triennial Central Bank Survey’ published September 16, 2019: “The US dollar retained its dominant currency status, being on one side of 88% of all trades.” The report also highlighted, “Trading in FX markets reached $6.6 trillion per day in April 2019, up from $5.1 trillion three years earlier.” That’s a lot of dollars traded globally and confirms that we need to stay current on the dollars price action.Multinational companies are especially keeping a close eye on the dollar as any major shift in global money flows will seriously negatively impact their net profit and subsequent share value.The following chart by www.finviz.com provides us with a current snapshot of the relative performance of the US dollar vs. major global currencies over the past year:KNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and somewhat surprisingly, we entered five new trades earlier this week, two of which have now hit their first profit target levels. Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Warren Buffett's Berkshire Hathaway Stock Tops $500,000

Warren Buffett's Berkshire Hathaway Stock Tops $500,000

Chris Vermeulen Chris Vermeulen 21.03.2022 21:44
A subscriber asked us recently where he should be putting his money and how to limit losses in his retirement portfolio. He expressed frustration as he watched Buffett’s Berkshire Hathaway stock going up, but at the same time, the stock indices going lower and many of his previously favored stocks experiencing substantial losses! This conversation naturally piqued our curiosity. We decided to look into this for him and, at the same time, share our findings with our subscribers.Berkshire Hathaway stock traded at an all-time record high price of $520,654.46. At a stock price of $512,991, Berkshire’s market capitalization is $756.23 billion. Last year, Berkshire generated a record $27.46 billion of operating profit, including gains at Geico car insurance, the BNSF railroad, and Berkshire Hathaway Energy.BERKSHIRE vs. S&P 500 BENCHMARKWarren Buffett, age 91 (known as the ‘Sage of Omaha’), is the chairman and CEO of Berkshire Hathaway. He is considered by many to be the most successful stock investor in the world and, according to Forbes Real-Time Billionaire List, has a personal net worth that exceeds $120 billion USD.Very few can compete with his long-term track record. Since 1965, Berkshire has provided +20% average annual returns, almost double the +10.2% average annual returns for the S&P 500 Stock Index benchmark. The 2022 year-to-date comparison is:BRK.A Berkshire Hathaway +14.53%; SPY SPDR ETF -6.36%; FB Facebook -35.64%However, according to Buffett’s own humility, he has endured years of underperformance and has had his share of bad stock picks. When Buffet was asked about drawdowns at one of Berkshire’s annual meetings, he stated, “Unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market.” According to www.finance.yahoo.com, the five biggest percentage losses for Berkshire have been:1974 -48.7%, 1990 -23.1%, 1999 -19.9%, 2008 -31.8%, and 2015 -12.5%.WHAT CAN WE LEARN FROM THE ‘BUFFETT INDICATOR’?The Buffett Indicator, as dubbed by Berkshire shareholders, is the ratio of the total United States stock market valuations (the Wilshire 5000 stock index) divided by the annual U.S. GDP. The indicator peaked at the beginning of 2022 and remains near all-time highs even though many stocks are well off their record levels.This historical chart of the Buffett Indicator was created by www.currentmarketvaluation.com. Doing quantitative analysis, we learn that the indicator is more than 1.6 standard deviations above the historical average, which suggests the market is over-valued and, in time, will fall back to its historical average.Berkshire Hathaway At Fibonacci Resistance!On March 18, 2022, Berkshire hit an all-time high price of $520,654. The Fibonacci resistance level of 2.618 or 261.8% of the March 23 low of $239,440 is $520,196. As shown on the daily chart, Berkshire also met resistance at the 2.618 standard deviations of the quarterly Bollinger Band.THE BENCHMARK: S&P 500 SPY ETFThe S&P 500 Index is the industry standard benchmark when comparing investment returns. It’s worth noting that as Berkshire reached the Fibonacci 2.618 resistance, the SPY found support at the Fibonacci 1.618 of the SPY March 23, 2020 low.Central banks have begun to tighten credit by raising interest rates for the first time since 2018, attempting to bring fast-rising energy, food, and housing prices under control. More time is needed to determine the full impact that rising global interest rates will have on current markets.However, on the chart below, we can see that the SPY put in a major top around 480 and, for the time being, has found support around 420 (the Fibonacci 1.618 level). Considering the increased market volatility and that we are now entering a cycle of higher interest rates, it would not surprise us to see the SPY eventually break below 420.It is worth noting that when a market makes a top after a prolonged bull-market, we usually experience distribution. Distribution with volatility results from large institutions beginning to liquidate their holdings while smaller retail investors are trying to buy stocks on sale. In other words, the retail investors are buying the dip hoping to get a bargain, while the institutional investors are selling the rally hoping to be liquidated and/or go short. It is a battle that retail investors will eventually lose!It is important to understand we are not saying the market has topped and is headed lower. This article sheds some light on some interesting analyses that you should be aware of. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades with subscribers to our newsletter, and surprisingly, we have just entered five new trades.Sign up for my free trading newsletter so you don’t miss the next opportunity!WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.GET READY, GET SET, GO - We invite you to learn more about how my three ETF Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
How To Use A 'Collar' To Protect Your Portfolio Against Losses

How To Use A 'Collar' To Protect Your Portfolio Against Losses

Chris Vermeulen Chris Vermeulen 17.03.2022 15:55
How can we protect our portfolio against losses when stocks are in a correction?  Or even if stocks are not currently in a correction?   There are many schools of thought on that. One way is to close positions and wait for more bullish times on the sidelines.  But that may not be the best choice for any number of reasons.Perhaps you are bullish on a stock position long-term and don’t want to sell it.  Maybe you already have a nice gain on your shares but are worried about a further decline.  Or perhaps there’s a dividend that you would like to continue to collect.  Simple Portfolio “Insurance”One relatively straightforward way to protect open stock positions is to buy Put protection.  Puts are option contracts that have an inverse correlation to price.   If the shares go down in price, the value of the Put will increase, thereby providing some offset to losses in the underlying stock.   The tradeoff is that Puts come at an out-of-pocket cost, and they expire.  There’s a cost to carry to have that “insurance” in place.Taking it a Step Further with a “Collar”A Collar can be an effective strategy to ensure against significant losses.  A common way to offset the cost of purchasing protective Puts is to implement a Collar strategy using options.Calls are option contracts that increase in value when the underlying shares go up in value.  We can sell Calls against our long stock and collect a premium.   That’s a simple Covered Call strategy.  But in itself, we get no downside protection on our shares other than the amount of the premium collected for selling the Calls.We can take that a step further by using the premium collected from selling the Calls to purchase protective Puts.  That’s known as a Collar.   And depending on the option strike prices and duration, we may be able to do that for a net credit and put a little extra profit in our pocket.Putting on a CollarSince options contracts control 100 shares per contract, the number of shares you want to protect determines the number of contracts.  Say you have 1,000 shares.  In that case, the Collar position would consist of 10 short Calls and 10 long Puts.  Here’s a P/L graph of a Collar on AAPL.  In this example, the stock is at $160.  A $170 Call is sold for $1.25, and a $140 Put is purchased at $1.00.  A Net credit of $0.25 is collected when the position is put on. Both options are 30 days to expiration (DTE). The TradeoffsWhile it’s tempting to think of the Collar as a way to get “free” Put protection, there are some tradeoffs.   By selling Calls, we are limiting our upside.  In the example above, we could have a $10 gain to the upside.  We’d also get to keep any net premiums collected, another $0.25 per share.  But because we’re obligated to provide shares at $170, we have capped our profit potential.The Collar also only gives us partial protection to the downside.  Options also have a limited life and expire. What Happens at Expiration?If the share price is above our Call strike price at expiration, we’re likely to have our shares “called away” – meaning we’ll be obligated to sell our shares at the strike price, $170 in this example.  But we could also extend the duration by rolling that Call out for additional credit.  As long as there are more than a few cents of time value in our short Call, we’re less likely to have it exercised even if it is in-the-money (ITM).   If our counterparty wanted to close their position, as long as there’s time value left in the option, they would be better off to sell their long Call rather than exercise it against us.Sign up for my free trading newsletter so you don’t miss the next opportunity! If the share price is between our Call and Put strike prices at expiration, those options expire worthlessly, and we’re left with our stock as before.If the share price has dropped below our Put strike, we would want to either sell the Put or exercise it.  We could “put” the stock to our counterparty at $140 per share.  Alternately, we could sell the Put and continue to hold onto our shares.The best case is for the options to expire with the share price just below the Call strike price.  In that case, both the Puts and the Calls expire worthlessly, and we get to keep our shares.  We are then free to sell shares at a profit or keep them and apply another Collar further out in time.SummaryIf you own shares that you don’t want to sell, consider putting on a Collar using options to give you some downside protection.  A Collar entails selling calls against your shares and using the premium collected to purchase puts for downside protection.  The tradeoff is your upside is limited.  But you get to hold onto your shares to continue to collect dividends (if any), all while having long Puts in place for downside protection.Read On To Learn More About Options TradingEvery day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)

Hang Seng Index (HSI) Has Increased Significantly Yesterday

Chris Vermeulen Chris Vermeulen 17.03.2022 13:08
THE SHANGHAI COMPOSITE INDEX HAS DROPPED MORE THAN 40% FROM ITS PEAK IN JUST 2 ½ MONTHS! China Stocks: This morning bottom pickers around the globe are snatching up what they believe to be “bargain basement priced stocks” as the Hang Seng Index gained 9.1% during today’s March 16, 2022 trading session. It was the best day for the HSI since the 2008 financial crisis as the Chinese government pledged to support markets. Tensions are running high as Chinese nickel giant Tsingshan Holding Group, the world’s biggest producer of nickel used in stainless steel and electric-vehicle batteries was sitting on $8 billion in trading losses. According to the Wall Street Journal on March 9, 2022 “The London Metal Exchange suspended the nickel market early last Tuesday, the first time it had paused trading in a metal contract since the collapse of an international tin cartel in 1985. The decision followed a near doubling in prices over a few hours.” ETFs CAN BE USED SPECIFICALLY FOR SEASONS AND DIRECTION! According to Statista www.statista.com on January 11, 2022, the assets managed by ETFs globally amounted to approximately 7.74 trillion U.S. dollars in 2020. With more than 8,000 ETFs to choose from, you can find just about any flavor you need or are looking for. A Kondratieff Wave is a long-term economic cycle that consists of four sub-cycles or phases that are also known as Kondratieff Seasons. This theory was founded by Nikolai D. Kondratieff 1892-1938 (also spelled “Kondratiev”), a communist Russia-era economist who noticed agricultural commodities and metals experienced long-term cycles. The following graph illustrates both the inflation cycle as well as the best investments for each season. The Kondratieff Seasons act as a general guide and each investment has their own specific bull or bear market cycle. ETFs CAN OFFER YOU PROTECTION AND AGILITY IN A BULL OR BEAR MARKET!  The following ETFs are not a recommendation to buy or sell but simply an illustration to emphasize the utilization of selecting an ETF for capital protection or potential appreciation in either a rising ‘BULL’ or falling ‘BEAR’ market. YINN – DIREXION DAILY FTSE CHINA STOCKS BULL 3X SHARES ETF From February 17, 2021, to March 14, 2022 the Direxion Daily FTSE China Bull 3x Shares ETF ‘YINN’ lost -90.78%. Target Index: The FTSE China 50 Index (TXINOUNU) consists of the 50 largest and most liquid public Chinese companies currently trading on the Hong Kong Stock Exchange as determined by the FTSE/Russell. Constituents in the Index are weighted based on total market value so that companies with larger total market values will generally have a greater weight in the Index. Index constituents are screened for liquidity, and weightings are capped to limit the concentration of any one stock in the Index. However, one cannot directly invest in an index. According to Direxion’s website www.direxion.com, Leveraged and Inverse ETFs pursue leveraged investment objectives, which means they are riskier than alternatives that do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. YANG – DIREXION DAILY FTSE CHINA STOCKS BEAR 3X SHARES ETF From February 17, 2021, to March 14, 2022, The Direxion Daily FTSE China Bear 3x Shares ETF gained +418.38%. The rates of return shown for the YINN and YANG ETFs are not precise in that they are an estimation as displayed on a chart utilizing the charts measurement tool to emphasize my talking point. Sign up for my free Trading Newsletter to navigate potential major market opportunities! ALERT: THE US FEDERAL RESERVE INTEREST RATE WAS RASIED A QUARTER POINT! In February, the inflation rate rose to 7.9% as food and energy costs pushed prices to their highest level in more than 40 years. If we exclude food and energy, core inflation still rose 6.4%, which was still the highest since August 1982. Gasoline, groceries, and housing were the biggest contributors to the CPI gain. The FED was expected to raise interest rates by as much as 50 basis points. However, investors are speculating that due to the Russia – Ukraine war, the FED may be more cautious and raise rates by only 25 basis points. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS with US and CHINA STOCKS? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24 months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe we are seeing the markets beginning to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into metals, commodities, and other safe-havens. UNDERSTAND HOW TO NAVIGATE OUR VOLATILE MARKETS! GET READY, GET SET, GO -I invite you to learn more about how my three ETF Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Are Current Market Cycles Similar To The GFC Of 2007–2009?

Are Current Market Cycles Similar To The GFC Of 2007–2009?

Chris Vermeulen Chris Vermeulen 14.03.2022 16:14
Soaring real estate, rising volatility, surging commodities and slumping stocks - Sound Familiar?This past week marked the 13th anniversary of the bottom of the Global Financial Crisis (GFC) of 2007-2009. The March 6, 2009 stock market low for the S&P 500 marked a staggering overall value loss of 51.9%.The GFC of 2007-09 resulted from excessive risk-taking by global financial institutions, which resulted in the bursting of the housing market bubble. This, in turn, led to a vast collapse of mortgage-back securities resulting in a dramatic worldwide financial reset.Sign up for my free trading newsletter so you don’t miss the next opportunity! IS HISTORY REPEATING ITSELF?The following graph shows us that precious metals and energy outperform the stock market as the ‘Bull’ cycle reaches its maturity. The stock market is always the first to lead, the second being the economy, and the third, being the commodity markets. But history has shown that commodity markets can move up substantially as the stock market ‘Bull’ runs out of steam.The current commodities rally in Gold began August 2021, Crude Oil April 2020, and Wheat in January 2022. Interestingly we started seeing capital outflows in the SPY-SPDR S&P 500 Trust ETF in early January 2022, and the DRN-Direxion Daily Real Estate Bull 3x Shares ETF starting back in late December 2021.LET’S SEE WHAT HAPPENED TO THE STOCK AND COMMODITY MARKETS IN 2007-2008SPY - SPDR S&P 500 TRUST ETFFrom August 17, 2007 to July 3, 2008: SPDR S&P 500 ETF Trust depreciated -20.12%The State Street Corporation designed SPY for investors who want a cost-effective and convenient way to invest in the price and yield performance of the S&P 500 Stock Index. According to State Street’s website www.ssga.com, the Benchmark, the S&P 500 Index, comprises selected stocks from five hundred (500) issuers, all of which are listed on national stock exchanges and span over approximately 24 separate industry groups.DBC – INVESCO DB COMMODITY INDEX TRACING FUND ETFFrom August 17 2007 to July 3, 2008: Invesco DB Commodity Index Tracking Fund appreciated +96.81%Invesco designed DBC for investors who want a cost-effective and convenient way to invest in commodity futures. According to Invesco’s website www.invesco.com, the Index is a rules-based index composed of futures contracts on 14 of the most heavily traded and important physical commodities in the world.BE ALERT: THE US FEDERAL RESERVE POLICY MEETING IS THIS WEEK!In February, the inflation rate rose to 7.9% as food and energy costs pushed prices to their highest level in more than 40 years. If we exclude food and energy, core inflation still rose 6.4%, which was the highest since August 1982. Gasoline, groceries, and housing were the most significant contributors to the CPI gain. The consumer price index is the price of a weighted average market basket of consumer goods and services purchased by households.The FED was expected to raise interest rates by as much as 50 basis points at its policy meeting this week, March 15-16. However, given the recent world events of the Russia – Ukraine war in Europe, the FED may decide to be more cautious and raise rates by only 25 basis points.HOW WILL RISING INTEREST RATES AFFECT THE STOCK MARKET?As interest rates rise, the cost of borrowing becomes more expensive. Rising interest rates tend to affect the market immediately, while it may take about 9-12 months for the rest of the economy to see any widespread impact. Higher interest rates are generally negative for stocks, with the exception of the financial sector.WILL RISING INTEREST RATES BURST OUR HOUSING BUBBLE?It is too soon to tell exactly what the impact of rising interest rates will be regarding housing. It is worth noting that in a thriving economy, consumers continue buying. However, in our current economy, where the consumers' monthly payment is not keeping up with the price of gasoline and food, it is more likely to experience a leveling off of residential prices or even the risk of a 2007-2009 repeat of price depreciation.THE POTENTIAL FOR OUTSIZED GAINS IN A BEAR MARKET ARE 7X GREATER THAN A BULL MARKET!The average bull market lasts 2.7 years. From the March low of 2009, the current bull market has established a new record as the longest-running bull market at 12 years and nine months. The average bear market lasts just under ten months, while a few have lasted for several years. It is worth noting that bear markets tend to fall 7x faster than bull markets go up. Bear markets also reflect elevated levels of volatility and investor emotions which contribute significantly to the velocity of the market drop.WHAT STRATEGIES CAN HELP YOU NAVIGATE CURRENT MARKET TRENDS?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24 months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe we are seeing the markets beginning to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into metals, commodities, and other safe havens.IT'S TIME TO GET PREPARED FOR THE COMING STORM; UNDERSTAND HOW TO NAVIGATE THESE TYPES OF MARKETS!I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
How You Can Minimize Trading Risk & Grow Capital During A Global Crisis

How You Can Minimize Trading Risk & Grow Capital During A Global Crisis

Chris Vermeulen Chris Vermeulen 09.03.2022 22:39
To minimize trading risk and grow capital during a global crisis is somewhat hinged on the answers to speculative questions. How long will the Russia – Ukraine war last? How high is the price of oil and gas going to go? How quickly will central banks raise interest rates to counter high inflation? What assets should I put my money into? Knowing what the Best Asset Now (BAN) is, is critical for risk management and consistent growth no matter the market condition!‘BUY THE DIP’ or ‘SELL THE RALLY’? - DJI Weekly ChartAs of 3/8/22, YTD returns are: DJIA -10.20%, S&P 500 -12.49%, Nasdaq 100 -18.70%The Dow Jones Industrial Average traded as high as 36952.65 on January 5, 2022The DJIA put in a Covid 2020 Low of 18213.65 on March 23, 2020. When you double the price of this significant low, you get a price of 36427.30, which the DJIA reached on November 4, 2021. This was precisely 591 calendar days from the 2020 low. The 200% level seems to have capped the bull rally. If, in fact, this is the top and the start of a bear market, we should experience high volatility both up and down. However, the highs and lows should be lower as the market begins to trend lower. The volatility will also continue to increase as the market deflates and continues to lose capital.Sign up for my free trading newsletter so you don’t miss the next opportunity! It appears this scenario may very well coincide with the fundamental current events of high inflation, central banks unable to add stimulus, having to raise their interest rates, and current/future geopolitical events.What-To-Do Before the Storm Hits“Have A Plan and Stick-To-Your-Plan”There are some basic strategies or practices that professional traders utilize to minimize trading risk and grow capital. Here are a few ideas:Bull/Bear Markets – In an upmarket, you should buy the dips. In a down market, you should do the opposite and sell the rallies. Rallies in a down 'bear' market tend to be very fast and short-lived.Diversification – Don't have your eggs in too many baskets. It is better to navigate thru a storm by focusing your resources specifically rather than generally.Leverage – Reduce leverage, position size, or know how you will respond to different percentage losses or gains. Understand what your investment objective is as well as your tolerance for risk. If you're having trouble sleeping at night, you should reduce your holdings to the place where you are comfortable.Leverage is a mathematical equation, and it does not have to be 1x, 2x, etc. It can also be 0.75x, 0.50x, etc. You get to decide what's best for you and your family. Leverage is also a double-edged sword! Be careful, especially when the markets are on edge and volatile.Where is the Institutional Money Going?The global currency market, otherwise known as Forex or FX, is the largest market in the world. According to the BIS Triennial Central Bank Survey, published on December 8, 2019, by the Bank for International Settlements, it has an average daily transactional volume of $6.6 trillion.By tracking global money flow, we can get a pretty good idea of where the smart money is going. For now, let’s see what has happened during the last 6-months.According to www.finviz.com, we notice that the US Dollar, despite its Covid stimulus spending spree, was the preferred currency. However, the Eurodollar has seen substantial outflows decreasing by -7.60%, which is entirely understandable with the Russia – Ukraine War at their doorstep.Global central banks ponder how quickly to raise interest rates in order to curb high inflation!According to TradingEconomics, the current global interest rates by major country are: United States 0.25%, Japan -0.10%, Switzerland -0.75%, Euro Region 0.00%, United Kingdom 0.50%, Canada 0.50%, and Australia 0.10%.The US Federal Reserve may have been looking to raise interest rates by as much as 50 basis points at its next policy meeting. However, given Russia’s invasion of Ukraine, the FED may become more cautious and consider raising interest rates by only 25 basis points on March 15-16. We need to pay close attention to this high-impact market event.What strategies can help you minimize trading risk and grow capital?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Minimizing risk in order to grow your capital must remain a primary focus for all investors and traders. Now is the time to keep your eye on the ball!I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Is It Too Late To Begin Adapting To Higher Volatility In The Market?

Is It Too Late To Begin Adapting To Higher Volatility In The Market?

Chris Vermeulen Chris Vermeulen 07.03.2022 22:18
Now is the time for traders to adapt to higher volatility and rapidly changing market conditions. One of the best ways to do this is to monitor different asset classes and track which investments are gaining and losing money flow. Knowing what the Best Asset Now is (BAN) is critical for consistent growth no matter the market condition.With that said, buyers (countries, investors, and traders) are panicking as the commodity Wheat, for example, gained more than 40% last week.‘Panic Commodity Buying’ in Wheat – Weekly ChartAccording to the US Dept. of Agriculture, China will hold 69% of the world’s corn reserves, 60% of rice and 51% of wheat by mid-2022.Commodity markets surged to their largest gains in years as Ukrainian ports were closed and sanctions against Russia sent buyers scrambling for replacement supplies. Global commodities, commodity funds, and commodity ETFs are attracting huge capital inflows as investors seek to cash in on the rally in oil, metals, and grains.How does the Russia – Ukraine war affect global food supplies?The conflict between major commodity producers Russia and Ukraine is causing countries that rely heavily on commodity imports to feed their citizens to enter into panic buying. The breadbaskets of Ukraine and Russia account for more than 25% of the global wheat trade and nearly 20% of the global corn trade.Last week, it was reported that many countries have dangerously low grain supplies. Nader Saad, an Egypt Cabinet spokesman, has raised the alarm that currently, Egypt has only nine months’ worth of wheat in silos. The supply includes five months of strategic reserves and four months of domestic production to cover the bread needs of 102 million Egyptians. Additionally, Avigdor Lieberman, Israel’s economic minister, said on Thursday (3/3/22) that his country should keep “a low profile” regarding the conflict in eastern Europe, given that Israel imports 50 percent of its wheat from Russia and 30 percent from Ukraine.Sign up for my free trading newsletter so you don’t miss the next opportunity!The longer-term potential for much higher grain prices exists, but it’s worth noting that Friday’s close of nearly $12.00 a bushel for wheat is not that far away from the all-time record high of $13.30, recorded 14-years ago. According to Trading Economics, wheat has gone up 75.08% year-to-date while other commodity markets like Oats are up a whopping 85.13%, Coffee 74.68%, and Corn 34.07%.How are other markets reacting to these global events?Year-to-date comparison returns as of 3/4/2022:-9.18% S&P 500 (index), -7.49% DJI (index), -15.21% Nasdaq (index), +37.44% Exxon Mobile (oil), +20.08% Freeport McMoran (copper & gold), -20.68% Tesla (alternative energy), -24.49% Microstrategy (bitcoin play), -40.51% Meta-Facebook (social media)As stock holdings and 401k’s are shrinking it may be time to re-evaluate your portfolio. There are ETFs available that can give you exposure to commodities, energy, and metals.Here is an example of a few of these ETFs:+53.81% WEAT Teucrium Wheat Fund+41.79% GSG iShares S&P TSCI Commodity -Indexed Trust+104.40 UCO ProShares Ultra Bloomberg Crude Oil+59.32% PALL Aberdeen Standard Physical Palladium SharesHow is the global investor reacting to rocketing commodity prices and increasing market volatility?We can track global money flow by monitoring the following 1-month currency graph (www.finviz.com). The Australian Dollar is up +4.25%, the New Zealand Dollar +3.72%, and the Canadian Dollar +0.30% vs. the US Dollar due to the rising commodity prices like metals and energy. These country currencies are known as commodity currencies.The Switzerland Franc +0.96%, the Japanese Yen +0.35%, and the US Dollar +0.00% are all benefiting from global capital seeking a safe haven. As volatility continues to spike, these country currencies will experience more inflows as capital comes out of depreciating assets and seeks stability.We also notice that capital outflow is occurring from the European Union-Eurodollar -4.55% and the British Pound -2.22% due to their close proximity (risk) to the Russia - Ukraine war.www.finviz.comGlobal central banks will need to begin raising their interest rates to combat high inflation!Due to the rapid acceleration of inflation, the US Federal Reserve may have been looking to raise interest rates by 50 basis points at its policy meeting two weeks from now. However, given Russia’s invasion of Ukraine, the FED may become more cautious and consider raising interest rates by only 25 basis points on March 15-16.What strategies can help you navigate current market trends?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals are starting to act as a proper hedge as caution and concern start to drive traders/investors into Metals and other safe-havens.Now is the time to keep your eye on the ball!I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
S&P 500 At Tipping Point To Start  A Bear Market And What You Need To See

S&P 500 At Tipping Point To Start A Bear Market And What You Need To See

Chris Vermeulen Chris Vermeulen 03.03.2022 21:38
Is a bear market on the way? My research suggests the downward sloping trend line (LIGHT ORANGE in the Daily/Weekly SPY chart below) may continue to act as solid resistance – possibly prompting a further breakdown in the markets for US major indexes.As we've seen recently, news and other unexpected events prompt very large price volatility events in the US major indexes. For example, the VIX recently rose above 30 again, which shows volatility levels are currently 3x higher than normal levels.Increased Volatility & The Start Of An Excess Phase Peak Should Be A Clear WarningThis increased volatility in the markets, coupled with the increased fear of the US Fed and the global unknowns (Ukraine, China, Debt Levels, and others), may be just enough pressure to crush any upside price trends over the next few months. Technically, my research suggests the $445 to $450 level is critical resistance. The SPY must climb above these levels to have any chance of moving higher.Sign up for my free trading newsletter so you don’t miss the next opportunity! Unless the US markets find some new support and attempt to rally back towards recent highs, an “Excess Phase Peak” pattern will likely continue to unfold throughout 2022. This unique price pattern appears to have already reached a Phase 2 or Phase 3 setup. Please take a look at this Weekly GE example of an Excess Phase Peak pattern and how it transitions through Phase 1 through Phase 4 before entering an extended Bearish price trend.Read this research article about Excess Phase Peaks: HOW TO SPOT THEN END OF AN EXCESS PHASE - PART 2SPY May Already Be In A Phase 4 Excess Peak PhaseThis Daily SPY chart highlights my analysis, showing the major downward sloping trend line, the Middle Resistance Zone, and the lower Support Zone. Combined, these are acting as a “Wedge” for price over the past few weeks – tightening into an Apex near $435~440.If the US major indexes attempt to break this downward price trend, then the price must attempt to move solidly above this downward sloping price channel and try to rally back into the Resistance Zone (near $445~$450). Unless that happens, the price will likely transition into a deeper downward price move, attempting to break below recent lows, near $410, and possibly quickly moving down to the $360 level.SPY Weekly Chart Shows Consolidation Near $435 – Possibly Starting A Phase 4 Excess PeakTraders should stay keenly aware of the risks associated with the broad US and global market decline as the Ukraine war, and other unknowns continue to elevate fear and concerns related to the global economy. In my opinion, with the current excess global debt levels, extended speculative market bubbles, and the continued commodity price rally, we may be starting to transition away from an extended growth phase and into a deeper depreciation cycle phase.My research suggests we entered a new Depreciation cycle phase in late 2019 and are already more than 25 months into a potential 9.5-year global Depreciation cycle. What comes next should not surprise anyone.Read this article about Depreciation Cycle Phases: HOW TO INTERPRET & PROFIT FROM THE RISKS OF A DEPRECIATION CYCLE Traders should stay keenly focused on market risks and weaknesses. I expected the conflict in Ukraine to have been priced into the US markets over the past 7+ days. However, I believe the markets were unprepared for this scale or invasion and will attempt to settle fair stock price valuation levels as the conflict continues. This is not the same US/Global market Bullish trend we've become used to trading over the past 5+ years. Looking Forward - preparing for a possible Bear marketMarket dynamics and trends are changing from what we have experienced over the past 40 years for stocks and bonds. The 60/40 portfolio is costing you money now. Traders need an edge to stay ahead of these markets trends and to protect and profit from big trends.The only way to navigate the financial markets safely, no matter the direction, is through technical analysis. By following assets and money flows, we identify trend changes and move our capital into whatever index, sector, industry, bond, commodity, country, and even currency ETF. By following the money, you become part of new emerging trends and can profit during weak stock or bond conditions.Want Trading Strategies that Will Help You To Navigate Current Market Trends?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
The Put / Call Ratio - A Technique Used To Gauge Market Extremes

The Put / Call Ratio - A Technique Used To Gauge Market Extremes

Chris Vermeulen Chris Vermeulen 02.03.2022 21:32
Perhaps you’ve heard of the “Put / Call Ratio” (PCR) and been unsure of exactly what it is or when and how to use it.First, a quick review of what Calls and Puts are. Calls are option contracts that increase in value from a RISE in the price of the underlying stock or index. Puts are option contracts that increase in value from a DROP in the price of the underlying stock or index.Let’s jump in and see what’s “under the hood” and how we might use that to better inform our decision-making as traders and investors.What Is the Put / Call Ratio?The PCR is a contrarian indicator based on the idea that market participants tend to get too bearish or bullish shortly before a reversal is about to materialize. When the market is at a point of extreme bearishness, participants tend to buy more Puts than usual. Conversely, when the market is at a point of extreme bullishness, participants tend to buy more Calls than normal. Contrarian logic suggests that most participants tend to be wrong when the market is near inflection points.Mathematically the Put / Call Ratio is simply the number of Puts divided by the number of Calls. A value of 1 would indicate that the same number of Calls and Puts are being purchased. A value greater than 1 indicates more Puts than Calls purchased. It follows that a value below 1 means that more Calls than Puts are purchased.Sign up for my free trading newsletter so you don’t miss the next opportunity!The PCR can be calculated using either open interest or volume of contracts. It can be calculated for individual stocks and for indexes. Most trading and charting platforms have several versions of the PCR available for the major indexes. Indexes generally have charts available, while individual stocks may only have daily numerical value readily available. The PCR is generally more useful as an overall market sentiment indicator for the major indexes like the S&P 500. For most underlying, including major indexes like the S&P 500, the PCR tends to be below 1 much of the time. That makes some sense, as major indexes tend to have a long-term bullish bias. But in times of elevated fear, Put buying tends to be elevated in a rush to buy portfolio “insurance”. Outright bets on a market decline can add to that volume.How Do I Use the pcr?It helps to understand what “normal” behavior is for the number of Calls and Puts purchased for the particular index or stock. For an index like the S&P 500, a PCR of 0.9 or above suggests heavy Put buying and is typically seen as bullish from the contrarian view. For reference, at the height of the dot-com bubble in March 2000, the PCR dropped to as low as 0.39. Lots of calls were being purchased as the market was peaking.Let’s look at some recent examples where we see the Put / Call Ratio at extreme levels. Below we see a chart of the S&P 500 displayed with Heikin Ashi candles overlayed with the PCR (magenta line).In the first instance (circled in magenta), we see a low in the PCR where significantly more Calls than Puts were purchased. When interpreted as a contrarian indicator, that suggests bearishness to come. And indeed, we do see five days of bearishness to follow.We then see a sharp reversal to a relatively high PCR (blue circle), and we do see a bullish reversal that lasted for six days.At the yellow circle, we see a spike up in the PCR accompanied by a sharp increase in the underlying volume. However, we see a few days delay before the bullish reversal materializes in this instance. And the market was rather volatile on those days, as evidenced by the tall candles with long tails.At the green circle, we have a somewhat elevated PCR and another delayed reversal.ConclusionThe PCR is not particularly useful in sideways markets. But it can be useful at market extremes, albeit at times with some delay.Like many indicators, the PCR is far from 100% reliable unto itself. Used in conjunction with volume, volatility (VIX), support/resistance levels, trendlines, moving averages, and other technical indicators, the PCR can give us valuable clues about market sentiment and when a reversal may be in the making.Now That You Know more About the put / call ration, Read On To Learn More About Options TradingEvery day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
Will War Change How We Spend Or Invest Our Money?

Will War Change How We Spend Or Invest Our Money?

Chris Vermeulen Chris Vermeulen 24.02.2022 22:23
I discussed the potential for the invasion into Ukraine with a friend over the past few days and how this new war may change the global economy. We ended up discussing the Invasion of Kuwait that took place in August 1990. At that time, as soon as the Invasion of Kuwait started, consumers almost immediately changed their spending and financial habits.Suddenly, people stopped going out to dinner after work. They stopped going out for drinks. They also stopped playing computer games and spending money on most outside entertainment (movies and movie rentals – back in the Blockbuster days). In short, consumers became fascinated by the televised war and lost focus on almost everything else.Sign up for my free trading newsletter so you don’t miss the next opportunity! As the conversation progressed, we started talking about how the US Federal Reserve may suddenly find that consumers have begun pulling away from traditional spending habits and how quickly these consumer trends can alter the economic landscape. For example, nearly 60 days into the Invasion of Kuwait, my friend remembered the US economy shifted into a much slower gear, and consumers continued to stay away from more normal spending habits.If this happens in today's super-inflated world, we may see a sudden shift in inflation, retail, housing, and general consumer demand very quickly. Recently, I started receiving messages from friends and clients worldwide who are focused on the Invasion of Ukraine – a whole new generation of people who may become entranced in the televised war (again).Consumer Retail May Suffer A -60% CollapseThis XRT Weekly Chart highlights the pre-COVID support levels that may become future targets if consumer spending habits suddenly shift. XRT has already fallen nearly -32% from the recent highs. If consumers continue to move away from outside economic activities, or more common post-COVID economic activities, we may see the Retail sector continue to move lower.Housing May Contract Faster Than ExpectedReal Estate may contract to near the COVID lows if consumers shy away from chasing speculative price trends in housing. Flipping houses has become a very hot industry over the past 5+ years. Yet, suddenly larger firms like Zillow and OpenDoor started offloading their Real Estate inventory because consumer demand shifted ahead of the US Fed's proposed rate hikes in 2022. The double-whammy of rising rates and war may be similar to what happened in the US between 1993 and 1994 – a very stagnant housing market.IYR has already fallen -16.5% from the highs and may decline to levels closer to -30% (or more) before finding a bottom. Wars tend to shift economies and spending habits very quickly.What To Stay Focused On Amid All The NoiseTraders should stay keenly focused on market risks and weaknesses. I expected the conflict in Ukraine to have been priced into the US markets over the past 7+ days. However, I believe the markets were unprepared for this scale or invasion and will attempt to settle fair stock price valuation levels as the conflict continues. This is not the same US/Global market Bullish trend we've become used to trading over the past 5+ years. The market dynamics and trends are changing from what we have experienced over the past 40 years for stocks and bonds. The 60/40 portfolio is costing you money now. Traders need an edge to stay ahead of these markets trends and to protect and profit from big trends.The only way to navigate the financial markets safely, no matter the direction, is through technical analysis. By following assets and money flows, we identify trend changes and move our capital into whatever index, sector, industry, bond, commodity, country, and even currency ETF. By following the money, you become part of new emerging trends and can profit during weak stock or bond conditions.What Trading Strategies Will Help You To Navigate Current Market Trends?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Fed And BoE Ahead Of Interest Rates Decisions. Having A Look At Nasdaq, S&P 500 and Dow Jones Charts

Mid & Small Cap Indexes May Surge Higher

Chris Vermeulen Chris Vermeulen 16.02.2022 21:32
As the global markets move away from recent concerns of war and Fed rate hikes, I believe both Small and Mid Cap indexes are uniquely positioned to potentially surge 7% to 11%, or more, from recent lows. My analysis suggests both the Small and Mid Cap Indexes may have moved excessively lower over the past 30+ trading days. They may be poised for a unique opportunity and a substantial price rally if the global markets continue to move away from extreme risk events. As the US Fed and global central banks position to combat inflation while war tensions build near Ukraine, I believe the US Small and Mid Cap Indexes are uniquely undervalued and ready for a potential move higher. The recent recovery in the US major indexes may be evidence of strong bullish price momentum underlying the US Major Indexes. I believe that foreign capital is moving into various US assets to avoid foreign market/currency risks. The US Small and Mid Cap Indexes seem like perfect opportunities for this capital deployment. IWM May Rally 12 to 14% - Targeting $238 to $240 This Weekly IWM chart highlights a support level near $191.00 and a recent Three River Morning Star bottom reversal pattern near $194.40. It also highlights the previous range-based trading and dual Pennant/Flag setups using shaded BLUE and YELLOW Rectangles. I believe IWM has a solid potential to rally back to near the $220 level before finding resistance (+7.25%). If this bullish price momentum continues, IWM may rally to levels above $238 to $240. The global markets may have recently focused too much on the US Fed and Global Central Banks while missing the underlying strength of the US economy. Consumers are still spending, and the US Fed has yet to make any substantial adjustments to rates or balance sheets. These recent lows may provide an excellent opportunity for traders to capitalize on a “reversion price move” soon. The only way to navigate and capitalize on these price swings is to stay focused on Technical Analysis and strategic opportunities for trades when they occur. WHAT TRADING STRATEGIES WILL HELP YOU TO NAVIGATE CURRENT MARKET TRENDS? Learn how I use specific tools to help me understand price cycles, setups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase. This may start a revaluation phase as global traders identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern drive traders/investors into Metals. I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Our Attention Should Be Drawn To Fed As Well, An Increase Of Interest Rate Is Likely To Come

Our Attention Should Be Drawn To Fed As Well, An Increase Of Interest Rate Is Likely To Come

Chris Vermeulen Chris Vermeulen 15.02.2022 15:31
The FED has made it very clear that it will raise its benchmark interest rate, the federal funds rate. This could have severe consequences and even lead to a financial crisis. They are too far behind the curve and will be labeled a major policy error in the future, most likely. They have put themselves in a situation where they are now their own hostage. They need more leadership to describe what a soft landing is going to look like. They have been too slow to act, and now they are going too fast. The “Powell Put” has now been put out to pasture. We believe that the FED will make more rate hikes than they have announced. Goldman Sachs thinks there will be four 25-basis-point increases in the federal funds rate in 2022. Jamie Dimon, CEO of JPMorgan Chase, said, “he wouldn’t be surprised if there were even more interest rate hikes than that in 2022. There’s a pretty good chance there will be more than four. There could be six or seven. I grew up in a world where Paul Volcker raised his rates 200 basis points on a Saturday night.” Mr. James Bullard of the St. Louis FED spoke out in an arrogant tone that aggressive action is now required. The markets translated this to mean that the FED was going to call an emergency meeting as soon as this coming week to hike interest rates by no less than 50 basis points. This sent interest rates soaring and stock prices plummeting. WARNING: More Downside To Come Uncertainty abounds regarding the path of inflation and new FED policy. This has created a landscape of continued strong periods of distribution in the equity markets. If there are any bounces, they should be used to sell ‘risk assets’. This has been one of the worst starts to a calendar year in the history of the stock and bond markets. Chart Source: Zero Hedge Last Thursday, the reported inflation rate increased by 7.7 percent, the highest in forty years. Stocks tumble as red-hot inflation print pressures technology shares. Markets didn’t like this, which immediately moved them down. Bears are in control of the market, which can be observed from Friday’s trading session. The U.S. 10-year yield rose above 2% for the first time since August 2019 amid a broad Treasury-market selloff. It was driven by expectations for quicker FED interest-rate hikes to contain faster than predicted inflation. It takes at least two to three years to have any material impact on the economy. One sector is currently doing well, which is the oil sector. Cycle's analysis is applied to find the best stocks to invest in and the best sectors. The next sector we are monitoring is Gold/Silver. Crude oil prices are staying strong. There are a lot of geopolitical factors in play here. I think there's a risk premium on oil right now because of Russia. What The Heck is CPI? The Consumer Price Index, CPI, is the measure of changes in the price level of a basket of consumer goods and services. This is one of the most frequently used statistics for identifying periods of inflation in households. Consumer Price Index Summary. Last Thursday, the inflation figures were released, confirming that everything is getting more expensive. It is up 7.5 percent versus last year. Mortgage rates are starting to rise. If you plan to buy a new home, this is the time to do it. These historically low interest rates will not last long. Should I Invest In Gold Today? Owning gold acts as a hedge against inflation as well as a good portfolio diversifier as it is a great store of value. Gold also provides financial cover during geopolitical and macroeconomic uncertainty. Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost-of-living increases. Conclusion: It seems the stock market may be on its last leg here. Big money flow has been coming out of the large-cap stocks while commodities have been rising. Commodities are typically one of the last assets to rally before the stock market top and start a bear market. I see all the signs, but we must wait for the price to confirm before taking action. We have seen this setup before in 2015/2016, also in 2018, and the market recovered and rallied dramatically from those levels.  What Trading Strategies Will Help You To Navigate Current Market Trends? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Bonds Not Reflecting Risks Like They Usually Do – Where's The Beef?

Bonds Not Reflecting Risks Like They Usually Do – Where's The Beef?

Chris Vermeulen Chris Vermeulen 11.02.2022 21:46
I've been paying close attention to Bonds as the global markets react to rising inflation and global central bank moves recently. The US Federal Reserve has yet to take any actions to raise rates, but we all know it will come at some point. Longer-term bonds are acting as if these risks are much more subdued than many traders/investors believe – which has me questioning if global central banks have overplayed the stimulus game? Why would traditional safe-haven assets fail to act in a manner that reflects current market risks like they would typically do? Why have precious metals failed to reflect these risks also properly? Is there something brewing in traders' minds that are muting or mitigating these traditional safe-haven assets? Bonds Continue To Slide After COVID Rally This table, reflecting the recent downward trend in Bonds, highlights the weakened safe-haven tendencies. These assets would generally present with rampant inflation and the possibility of multiple Fed rate increases. (Source: SeekingAlpha.com) Increasing uncertainty throughout the globe, and as inflation climbs to the highest levels since the mid-1970s and 1980s, – “where's the beef?” (to reference a 1980s Wendy's commercial phrase). This TLT Weekly chart shows how risks climbed when COVID hit in February 2020. Yet, take a look at how price has consolidated below $156 and has continued to trend lower over the past six months. After a brief move higher, to levels near the $147 to $155 level, TLT has moved decidedly lower over the past 6+ months. This downward price trend illustrates the diminishing fear levels as traders piled into the post-COVID rally phase. This move suggests traders believe inflation may be temporary or that the US Federal Reserve has room to raise rates without disrupting the global economy. I think the current premise and price trend in TLT vastly underestimates the amount of disruption a series of Fed rate hikes would cause the international markets. The US Federal Reserve will likely consider all options before taking an aggressive move to raise rates. Additionally, the US Fed may decide to allow foreign central banks to move more aggressively to raise rates while it decides to take a more measured approach to inflation. The key to future rate increases is how supply chains open up and how consumers continue to engage in economic activities. Any sudden shift by consumers, or further disruptions in supply for manufacturing and consumer staples/discretionary items, could prompt the Fed into taking aggressive actions. From where the Fed Funds Rates currently are, a move above 0.50% would reflect a +500% rate increase. This may prompt some type of “pop” in certain asset bubbles. (Source: St. Louis Fed) Traders should stay keenly focused on market risks and Bond levels throughout 2022 into 2023 as any sudden shift away from current trends could spell trouble. Right now, Bonds are pricing in minimal risks – which may be a mistake. The market dynamics and trends are changing from what we have experienced over the past 40 years for stocks and bonds. The 60/40 portfolio is costing you money now, and bonds can’t keep up with inflation and are more or less yield-less. The only way to navigate the financial markets safely, no matter the direction, is through technical analysis. By following assets and money flows, we identify trend changes and move our capital into whatever index, sector, industry, bond, commodity, country, and even currency ETF. By following the money, you become part of new emerging trends and can profit during weak stock or bond conditions. What Trading Strategies Will Help You To Navigate Current Market Trends? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase. This may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
We Will Probably Review All Of Inflation Indicators Around The World This Weekend

The Taxman vs Traders - How To Minimize His Cut Of Your Profits

Chris Vermeulen Chris Vermeulen 10.02.2022 21:27
While the reality is hopefully not quite that bad, as Traders and Investors, we need to consider our silent partner, the "Taxman," and how to minimize his cut of our profits. Having a "tax problem" can be a good "problem" to have. But we're not obligated to pay any more in taxes than tax laws and regulations in our jurisdiction require. As George Harrison of the Beatles famously penned… “Let me tell you how it will beThere's one for you, nineteen for me'Cause I'm the taxmanYeah, I'm the taxman” Are there strategies we can use to significantly reduce our tax bill, even to as low as $0? You bet! Before we dive in, here are a few caveats… We're not tax advisors. You absolutely should review any taxation questions, strategies, or issues with a tax professional that is well-versed in your tax jurisdiction and familiar with your circumstances. Much of the following pertains to those in the USA. But there's some information here that may be useful to those outside the USA as well. Sign up for my free trading newsletter so you don’t miss the next opportunity! Tax strategies can range from simple to complex. Some have rock-solid legal standing, while some of the more aggressive strategies may invite unwelcome scrutiny from tax authorities. Personally, I prefer simple strategies that are easy to maintain and not subject to “debate” with the IRS. Lastly, laws and tax codes are subject to change. You need to continually educate yourself and have a good tax advisor to stay on top of any changes. Traders Tax-Free Accounts PayPal Founder Peter Thiel famously used the Roth IRA to turn a small investment in Founder’s shares into more than $5 billion tax-free. Google it. It’s a fantastic testimony to the power of the Roth IRA. Hands-down, the Roth IRA (first created in 1997) is a simple and powerful tool for legally avoiding taxes. Why? Because any gains in the account are not taxed. Not now, not ever! Reporting individual trades on your tax return in a Roth IRA is super simple. Why? Because none is required! Maintenance and reporting for a Roth IRA couldn’t be easier. The tradeoff is that - like a Regular IRA - you generally cannot withdraw funds tax-free until age 59 ½. (There are ways around that with a 72t Plan, for example.) And contributions to a Roth IRA are not tax-deductible like they are with a Regular IRA. If you have Earned Income in the United States, you should seriously consider maximizing contributions to a Roth IRA. Even if you currently don’t have Earned Income, but you have a regular IRA, there are ways to convert all or part of those funds into a Roth IRA should you choose to do so. Typically, you’d have to pay taxes on the converted funds. But once that’s done, the taxes are paid in full. This is commonly known as the “Backdoor Roth IRA,” which is also a way around the income-based annual contribution limits for a Roth. Tax-Deferred Accounts Second-best to the Roth IRA is a Regular IRA. Contributions are tax-deductible in the year made. Capital gains in the account are not taxed until funds are withdrawn. Distributions after age 59 ½ are taxed as regular income when they are made. It used to be that the investment vehicles and strategies that could be used in both Regular and Roth IRAs were somewhat limited. Now there is an extensive range of asset classes and strategies permitted. For example, as an options trader, almost any defined risk strategy is permissible in either a Regular or Roth IRA at most options brokers. Special Tax Treatment Section 1256 contracts were created to eliminate a tax avoidance where contracts were sold near year-end to show a loss, and like-kind were repurchased in the following tax year. Section 1256 contract rules were created to require “marked-to-market” at year-end whether the contracts are sold or not. The big side benefit of Section 1256 contracts is the 60/40 tax treatment, where 60% of gains are treated as long-term capital gains and taxed at a lower rate. The other 40% are treated as short-term capital gains and taxed as ordinary income. If you’re trading in a taxable account, it can be very beneficial to choose Section 1256 contracts where those happen to fit into your strategy. Section 1256 contracts include futures, options on futures, and certain indexes like SPX and VIX and options on those indexes. Be sure to verify Section 1256 treatment and report with your broker and tax advisor. State Taxes An additional layer of the tax burden is at the state level. One way to avoid that is to live in one of the states with no income tax for individuals. These are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. You generally must file a federal tax return in those states. Keep in mind that the “tax-free” states tend to have higher excise, sales, and property taxes. You should consider your overall tax burden and affordability ranking if you’re thinking about moving to one of those states. Some traders live in multiple states and claim their “residency” in a tax-free state. That can get a little tricky as rules and enforcement will vary. You’ll need to keep good records of your time spent in the tax-free state and be sure to comply with all regulations for both states. Tax Splitting Regardless of where you live, it can be possible, legal, and common to create a separate entity, such as a C Corporation, that is domiciled in a tax-free state such as Nevada. Instead of capital gains bumping you into a higher marginal tax bracket as an individual, you could “tax split” and have the entity pay taxes on its gains at a lower Federal level and with no state taxes due. Typically, there are tax implications in your home state if you take income out of the entity for your use as an individual. But be aware that you can create and control a separate entity from yourself that has its own P/L for taxation purposes and that can reduce the overall tax burden. Summary Roth IRA.  If it’s available to you, think about maximizing it.  Outside of that, consider tax-deferred accounts, Section 1256, income splitting, and tax-free residency strategies as may be advantageous to your situation. Now That You Know About Lessening Your Tax Burden, Read On To Learn More About Options Trading Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.    If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com. Enjoy your day!
Fed Comments Help To Settle Global Market Expectations

Fed Comments Help To Settle Global Market Expectations

Chris Vermeulen Chris Vermeulen 28.01.2022 14:59
The recent Fed comments should have helped settle the global market expectations related to if and when the Fed will start raising rates and/or taking further steps to curb inflation trends. Additionally, the Fed has been telegraphing its intentions very clearly over the past few months, providing ample time for traders and investors to alter their approach to pending monetary tightening actions. Read the full Fed Statement here.In my opinion, foreign markets are more likely to see increased risks and declining price trends for two reasons. First, at-risk nations/borrowers struggle to reduce debt levels. Second, foreign market traders/investors struggle to adapt to the transition away from speculative “growth” trends. I think the US Dollar may continue to show strength over the next 4+ months as the foreign traders pile into US economic strength while the Fed initiates their tightening actions. So it makes sense to me that global markets would recoil from Fed tightening while debt-heavy corporations/nations seek relief from rising debt obligations.Foreign Markets Struggle For Support Before US Fed Monetary TighteningIn a continuing downward slide, global market equity indexes continue to move lower after the US Fed comments this week. In this article, I wrote about this dynamic on August 3, 2021: US Markets Stall Near End Of July As Global Markets Retreat - Are We Ready For An August Surprise? At that time, I suggested the US markets were stalling while the global markets continued to decline.Now, nearly five months later, we've seen the US market trend moderately higher, attempting to struggle to new highs and exhibit deep downward price trends, while the global markets have continued to trend lower. As we move closer to the US Fed pushing interest rates higher, I expect these trends to become even more volatile and pronounced.US Equities May Find Support After The Fed Raises RatesThe current dynamic in the global markets is that capital is seeking investments where safety and profitable returns dominate over risks. As the global markets transition ahead of the Fed rate increases, I believe the US markets will continue to dominate global assets in opportunities, safety, and returns. Once the Fed starts to raise interest rates, a brief period of volatility throughout the global markets may occur. Still, that volatility should quickly settle as traders chase a stronger US Dollar, US Dollar-based Dividends, and a potential “melt-up” of the US Equity market (particularly the Dow Jones, S&P500, and possibly the Russell 2000).Sign up for my free trading newsletter so you don’t miss the next opportunity!Unless the US Fed takes very aggressive action in raising rates too quickly, I believe, at least initially, the US equity markets will continue to benefit from perceived strengths compared to many global equities/indexes.This means there will be many opportunities for traders and investors in 2022 and 2023 – we have to be patient in waiting for the chance to profit from these big trends. Jumping ahead of this volatility could be dangerous if you are on the wrong side of the price trend. Instead, wait for the right opportunities while you protect your capital from extreme risks. Let the markets tell you when opportunities are perfect – don't try to force a trade to happen.On December 28, 2021, I published this research article showing how my Adaptive Dynamic Learning (ADL) Predictive Modeling system expects price to trend in 2022 and early 2023: Predictive Modeling Suggests 710 Rally In SPY And QQQ Before April 2022. I strongly suggest taking a look at the recent downside price trends in relation to the lower range of the ADL Predictive Modeling expectations. If my ADL Predictive Modeling system is accurate, we may see a relatively strong recovery in the US stock market throughout the rest of 2022 and beyond.Strategies To Help You Protect And Grow Your WealthLearn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Financial Sector ETF XLF $37.50 Continues To Present Opportunities

Financial Sector ETF XLF $37.50 Continues To Present Opportunities

Chris Vermeulen Chris Vermeulen 26.01.2022 23:16
Recent volatility in the US markets ahead of the Fed comments/actions have prompted a relatively big pullback in almost every sector. Many traders are concerned the Fed may take immediate action to raise rates. Yet, a small portion of traders believes the Fed may be trapped in a position to act more conservatively in addressing inflation going forward. I think the Fed will continue to talk firmly about potentially raising rates. The Fed is more interested in decreasing the assets on their balance sheet before they risk doing anything to disrupt support for the global markets.Suppose my analysis of the Fed predicament is correct. In that case, the recent collapse of the US markets represents a fear-based emotional selloff of many sectors that may still represent a strong opportunity for a recovery rally in 2022. One of those sectors is the Financial sector – particularly XLF.I wrote about this on January 7, 2022, in this article: FINANCIAL SECTOR STARTS TO RALLY TOWARDS THE $43.60 UPSIDE TARGETI also wrote how the US Fed might be playing with fire regarding their stern positioning and statements recently in this article on January 14, 2022: US FEDERAL RESERVE - PLAYING WITH FIRE PART 2Critical Components Of Recent Inflationary TrendsIf you attempt to follow my logic as I read into the Fed's intentions. There are three critical components to navigating the rise of inflationary trends recently.The COVID-19 virus event created several disparities in the global markets. First, the disruption to the labor and supply-side markets began an almost immediate inflationary aspect for the global economy. Secondly, the US's stimulus and easy money policies have stimulated demand for products, technology, houses, autos, and other real assets. These two factors combined have increased inflationary pressures on the global markets.Rising consumer demand for real and virtual assets such as Cryptos, NFTs, and others has pushed the speculative investing cycle into a hyper-active rally phase. This was clearly witnessed in early 2021, with the Reddit/Meme rallies became the hottest trades, then quickly dissipated after July 2021. This speculative rally has pushed the post-COVID rally well beyond reasonable expectations over the past 16+ months.Excessive debt levels push a deflationary process to the forefront. Consumers are now starting to pull away from the excesses of the past 16+ months. The Fed's tough talk and recent deeper declines in various sectors over the past 12+ months show that inflationary trends are subsiding. Despite the supply-side issues being resolved, consumers continue to pull away from hyper-speculative activities. The markets will naturally revalue to support more realistic price levels, deflating excessive P/E ratios and recent extreme price peaks in assets.Possible Next Steps for the US FedMy interpretation of the global markets is that excess speculative trending and rising commodity prices, combined with excess debt levels and consumers who have suddenly become very aware of global market risks, are already acting as a deflationary process. Because of these underlying factors, which I believe are currently in play throughout the globe, the US Federal Reserve may be forced to wait things out a bit. The Fed may have to navigate these natural deflationary processes while attempting to provide monetary support for what I believe will be a downside/deflationary trend over the next 3+ years.Sign up for my free trading newsletter so you don’t miss the next opportunity! The US Federal Reserve may not have to take any aggressive action right now. Instead, it may decide to watch how the global markets contract as consumers pull away from inflated price levels and higher risks and attempt to navigate these natural deflationary price trends. If the Fed were to act aggressively right now and raise rates, they could push the global markets into a steeper collapse. This process would likely burst numerous asset bubbles very quickly and push many foreign nations into some type of debt default.This presents a new problem for the US Fed – going from inflationary concerns to global economic collapse concerns very quickly. So when I suggested the Fed is playing with fire – maybe I should have said “playing with the nuclear economic football”?Financial Sector ResilienceStill, I believe the US Financial sector is showing tremendous resilience near $37.50. I think it has a powerful opportunity to rally back above $42 to $44 if the Fed takes a more measured approach to let the global markets deflate a bit before taking any aggressive actions.The US Financial sector will likely continue to benefit from price volatility and consumer demand as these deflationary trends prompt consumers to engage in more normal economic activities. The Financial sector also has continued to stay under moderate pricing pressure since the 2008 highs. XLF is only 25.46% higher than the 2008 highs, whereas the NASDAQ is more than 575% above the 2008 market highs.The Financial Sector may be one of the strongest market sectors over the next few years. Deflationary trends push consumers and global markets away from excess debt levels and towards more traditional economic activities/trends.Want To Learn More About Financial Sector ETFs?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
The Synthetic Dividend Option To Generate Profits

The Synthetic Dividend Option To Generate Profits

Chris Vermeulen Chris Vermeulen 24.01.2022 23:01
Many companies regularly distribute a portion of their profits in the form of a dividend to attract investors and incentivize them to remain long-term shareholders. But most companies, ETFs, and commodities don’t pay a dividend at all. When there’s no dividend, the only opportunity for income or a profit comes from a capital gain (or loss) from selling the position.Wouldn’t it be nice to get regular payouts from “no dividend” investments? As a dividend, these payouts could be used for income. Or, if left invested, our cost-basis could be further reduced with every payout.A Commodity ETF ExampleWhile the strategy presented here can work on any stock or ETF that has options, it works best with relatively lower-priced products under about $25. A commodity ETF such as SLV – currently trading around $22 a share -- is an ideal candidate.Like gold, silver has historically been used as a physical store of wealth and a hedge against inflation. But long-term charts on gold and silver show that these products often go sideways for a long time before having a significant move. Historically such investments have required buying, holding, and waiting – sometimes for a very long time.One way to compensate for the lack of a dividend on silver is to purchase shares of SLV and write Call options against those shares.  This is a relatively simple options strategy of writing “Covered Calls”.   Two Ways to Open the TradeWe want to buy low and sell high by purchasing shares on weakness and selling Calls on strength. We can also sell Puts on weakness as an alternative to purchasing shares. The Profit and Loss graph of selling a Put is the same as for selling a Covered Call.If we sell Puts, we’ll likely have shares “Put” to us at some point and will then own the shares at the strike price we sold minus the premiums collected. Having shares put to us at a reduced cost basis is part of the plan. When we sell an Out-of-the-Money (OTM) Put, we’re methodically nudging the statistics in our favor by “buying low” when there is a pull-back in the underlying. We can alternately think of selling a Put as a Limit Order to buy shares with the limit price equal to the strike price we sold.When shares are “Put” to us, we then sell Calls against the shares we now own. And the cost (or basis) of the shares we purchased will have been reduced by the cumulative option premium collected by selling Puts.Trade ManagementWe may not have a great opportunity to sell option premium in every possible cycle. There will likely be times where the underlying will be in a pullback, and we may want to wait for the price to recover before selling Calls. Actual expiration cycle outcomes are likely to be a mix of having Calls expire worthless in some cycles and having shares called away in other cycles.Writing Covered Calls is a relatively low-maintenance strategy that doesn’t have to be watched continuously. Once we write Calls, the shares will either be called away or not. But we do have to be patient and let time decay in the options we sold work for us.Sign up for my free trading newsletter so you don’t miss the next opportunity! If the Calls we sold expire worthless, we still own the shares. In this case, we sell Calls again for some future expiration cycle and collect more option premium.If our Calls expire In-the-Money (ITM), the Calls will be exercised, and the shares will be called away. The shares are purchased by our counterparty at the strike price we sold, and we no longer own the shares. As the Call seller, we keep the premium and any gain on the shares. In this case, we start the process again by buying shares or selling Puts.Upside and Downside RisksWriting Covered Calls (and selling Puts) is a neutral to bullish strategy. There can be sustained downtrends, price shocks, and changes in volatility that can affect strategy performance. As with any strategy, it’s important to ask and understand “What could possibly go wrong?” before getting involved.There’s always a tradeoff when selling Covered Calls. In exchange for collecting option premium, profit is limited to the amount of premium collected plus any appreciation in shares up to the strike price. For that reason, I tend to sell Out-of-the-Money (OTM) Calls.Keeping probability in our favor and letting time decay work for us are benefits of selling a Covered Call (or Put). As option sellers, we don’t need large up moves to make a profit. We have the statistical odds in our favor and option time decay working for us. The underlying share price can go up, sideways, or even down a bit, and we can still profit. The “Synthetic Dividend” is one of my favorite ways to generate repeatable profits.What Else Is There To Know About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
US Federal Reserve - Playing With Fire Part II

US Federal Reserve - Playing With Fire Part II

Chris Vermeulen Chris Vermeulen 14.01.2022 22:49
The US Federal Reserve has recently taken steps to communicate a change in future policy – suggesting raising interest rates and acting more aggressively to combat inflation. Throughout the last few weeks of 2021 and early 2022, these comments and posturing by the US Fed have created some very big downside price moves in the US major indexes. As a result, the US markets' volatility levels (VIX) have moved to a recent average between 17~21 – nearly 3x historical normal levels.US Fed Likely To Move Very Slowly On RatesOne thing that I believe has become evident to many people is that we have moved past the COVID stimulus conversations of the past 24+ months. Inflation, rising prices, constricted supply-chains, and an excess of capital throughout many global markets appear to have shifted how the US Fed interprets future risks. The Fed is telegraphing these concerns to investors very clearly right now, which means traders/investors are shifting their focus away from high-flying Growth stocks.Even though traders are attempting to shift capital away from certain risky sectors in the US and global markets, I still believe we have about 60 to 120+ days before the bigger market shift takes place.The US Federal Reserve will likely start addressing inflationary concerns by reducing their balance sheet assets – not by aggressively raising interest rates. I feel the US Fed will navigate Q1:2022 and Q2:2022 by reducing balance sheet assets while allowing the global supply-chain issues to attempt to resolve themselves. By June/July 2022, or later, I believe the Fed may start to consider rate increases as a means to slow inflation.Fed Comments Shift Investor Sentiment – Metals In Focus For Later 2022This move away from Dovish/easy-money policies will push traders to consider more traditional hedge investments – like Gold and Silver. I'm sure you've read some comments over the past 24+ months about Gold being an extremely undervalued asset as the US Fed poured trillions of stimulus dollars into the economy? These comments were made concerning the fact that Gold rallied from $1450 in 2019 to almost $2100 in 2020 – over 12 months (over +43%). Could a big move in Gold/Silver happen again in 2022 or 2023?My research suggests a Double Pennant/Flag formation in Gold suggests the $1675 support level becomes critical soon. It also indicates a Breakout/Breakdown move may start to happen before March or April 2022 – near the APEX of the current Pennant/Flag formation.Sign up for my free trading newsletter so you don’t miss the next opportunity! The key APEX range is currently between $1785 and $1830. This represents a very tight price range where Gold may attempt to consolidate as we move towards the March/April Apex. My research suggests a move to levels near $1740 to $1750 may happen just before the Apex Breakout/Breakdown initiates. So, watch for a bit of downside price volatility in Gold before the end of February 2022.Junior Gold Miners May Rally +45%, Or More, On A Gold Price RallyThe Junior Gold Miners (GDXJ) Weekly Chart shows a firm support level near $37.35 that should act as a floor for price. My research suggests the next 45+ days will see GDXJ prices stay below $44 to $45 – trading in a reasonably tight range before starting to rally higher near the end of February 2022.I believe Metals and Miners are aligning for a late February 2022 or Q2:2022 rally. The reason is that I believe the positioning by the US Fed, and expectations related to later 2022 (a mid-term election year), may prompt quite a bit of concern for the US and global equities. This will likely push investors and traders into “old-school” hedge instruments – like Gold and Silver.That means Junior Gold and Silver Miners maybe about 55+ days away from an explosive upside price trend.SILJ May Rally +70% to +100%, Or More, On Fed ActionsNear the end of 2022, I published a research article highlighting the incredible opportunity in Silver – focusing on how the Gold/Silver ratio had recently reached another peak level and had started to decline: Fear May Drive Silver More Than 60% Higher In 2022. This move suggests the disparity between the price of Gold to the price of Silver shows Gold is appreciated (and holding greater value) than Silver over the past few years.The COVID virus event, and the subsequent Fed/Government stimulus, shifted investors/traders focus away from precious metals and into the equities market speculative rally. Now that the US Fed is starting to warn of more aggressive rate increases and other actions, precious metals are suddenly much more important as a hedge against future risks.This SILJ Weekly Chart highlights the incredible base level, near $12, that continues to offer traders a fantastic hedge against a sudden Fed move. Using a simple Fibonacci Price Extension, we can see a $20 target level (+61%) and a $25.64 target level (100%). If the $12 level holds as a base/support, SILJ may be one of the easiest and best hedges against a sudden Fed move right now.The US Federal Reserve is, in my opinion, playing with fireThe COVID Virus Event pushed global debt levels higher by more than $19.5 Trillion Dollars (Source: Bloomberg ). The rush to attempt to save the global economy has created a massive surge in global debt levels – pushing the global debt to GDP level to well above 356% (Source: Axios).Why is this so important right now? Because the US Federal Reserve is talking about an attempt to move interest rates and Fed decision-making back to near-normal levels. In my opinion, this was the one fault of Alan Greenspan in 2006-07. The thought that we can raise rates to “near normal level” at any time when we have grown debt levels excessively throughout the world is failed thinking and ignorant, in my opinion.The US Federal Reserve is trapped and almost backed into a corner. I believe the US Fed will find any rate increases above 1.00 before the end of 2023 will significantly disrupt the global speculative bubble. Any attempt to move rates to levels near or above 2.00 would represent a nearly +2000% rate increase in less than 12 to 24 months. If you want to see a shock to the global markets where global debt to GDP is closing in on 400%, try raising the FFR by more than 2000% over a short period of time. That is what I call “playing with FIRE.”.(Source: Axios)2022 and 2023 will be filled with significant market trends and increased volatility. Right now, traders and investors need to understand the global markets are attempting to quickly transition away from a speculative/growth phase as the US Federal Reserve attempts to telegraph future rate increases. So it's time to start thinking about how to prepare for unknowns and how to protect your capital more efficiently.Growth sectors and US major indexes may continue to move higher for the next 30 to 60+ days, but my research suggests Q2:2022 may represent a "change in thinking" related to a late-2022 Fed shift. We are starting to see the markets move away from the speculative bubble-type trending we saw in 2020 and early 2021. Keep your eyes open and learn how to prepare for the big trends over the next 3+ years. The Fed is playing with fire right now. One wrong move and the markets could start a drastic price correction/reversion.Finding The Right Trading StrategiesIf you have struggled with finding opportunities over the past year or so and want to know which are the hottest sectors, or how to protect and grow your capital, then please take a minute to review my Total ETF Portfolio – Triple-Strategy Trading Plan to help you profit from these big market transitions.Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Death, Taxes, and Time Decay

Death, Taxes, and Time Decay

Chris Vermeulen Chris Vermeulen 13.01.2022 16:53
Few things are certain in life.  But as the old saying goes, there is nothing quite so certain as “death and taxes”.  As an Options Trader, I would enthusiastically add option time decay to that list.  Options offer traders and investors more leverage and risk mitigation than just purchasing shares outright. For example, if I were to purchase 100 shares of a stock at $100 per share, my total capital outlay would be $10,000. Options give us the right to buy or sell at a certain price for a pre-determined length of time. I could control that same 100 shares by purchasing an At-the-Money call with a $100 strike price with 90 days to expiration for perhaps $6 per share, or $600 total capital outlay. That’s powerful leverage. My downside risk is also limited to the amount I paid for the option, in this example, $6 per share. Compare that to purchasing the stock where my risk is, in theory, as much as $100 per share. (Although they’re relatively rare, “flash crashes” happen, companies can and do go bankrupt, get de-listed, etc.)Sign up for my free trading newsletter so you don’t miss the next opportunity!Since options give the holder the right to buy or sell at a specific price for a specific time period, they have a time value component right up until expiration. Included in the price of every option (put or call) is the cost of the time value remaining in the option. In comparison, the holding period for stock can be indefinite, and there is no risk of expiration -- only market risk.Intrinsic and Extrinsic Time ValueThe price of an option comprises two parts – intrinsic and extrinsic (time) value. Intrinsic value is simply the difference between the underlying's market price and the option strike price. Extrinsic value is another term for the value of the time left in an option before it expires. When we buy an option, part or all of what we're paying for is the option's time value. The further away the option expires, the more time value will be worth. Prior to expiration, there will always be some time value. But there may or may not be any intrinsic value to an option. Options with no intrinsic value are referred to as Out-of-the-Money (OTM) options.If you’re an option buyer with the right to buy or sell at a certain strike price, the “bad” news is options have a finite life – they expire. But for every option buyer, there is a counterparty. Option sellers are collecting a premium in exchange for taking on an obligation to either buy or sell shares at a certain price for a specific period of time. For option sellers, expiration marks the end of their commitment – so expiration is “great” news for them.Time DecayWhen we buy options, time decay works against us. For the holder of a long option, the option's time value will decrease a little day by day as expiration draws closer. As an asset, time value is like an ice cube, melting slowly at first and then rapidly until it has entirely melted away. This is not to say don't ever be a buyer of options. If we happen to be right about direction, duration, and magnitude, a long put or call option can generate a significant profit.Option time value is measured by Theta Decay and is commonly estimated daily by the calculated Theta. Theta is one of the more valuable of the Option "Greeks" to make use of. Essentially all trading platforms for options can be configured to show Theta as part of the Option Chain.Is it possible for the time value to increase rather than decrease even though the calendar time to expiration is decreasing? Yes, it certainly can. Remember that the price put on time value is variable and determined by market forces. If the underlying stock becomes much more volatile than it had been, then the value for that time can increase, sometimes substantially. If the underlying has been very volatile and becomes less so, then the time value can shrink.To Sell Or Buy Options?We can significantly turn the odds in our favor by being the seller of options. In that case, we're selling any intrinsic value (which would be $0 in the case of an Out-of-the-Money option) along with some portion of time value. Intrinsic value will go up or down with the price of the underlying. But in the end, as expiration gets close, the remaining time value will always approach $0 regardless of volatility. That we can literally "take to the bank."There's a well-known quote from Warren Buffett – "If you don't find a way to make money while you sleep, you will work until you die.". Buffett is also famous for being a seller -- not a buyer -- of option premium. Like Mr. Buffett, I too like to make money while I sleep.WANT TO LEARN MORE ABOUT OUR OPTIONS TRADING SERVICE?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
US Fed Playing With Fire - Bubbles May Burst While Bond Yields & Metals Rally

US Fed Playing With Fire - Bubbles May Burst While Bond Yields & Metals Rally

Chris Vermeulen Chris Vermeulen 12.01.2022 16:59
The US Federal Reserve's tightening monetary policy from a historically low-interest rate has slowed the US stock markets. As a result, traders quickly attempt to adjust their capital allocation levels as risk assets, technology, and US major indexes roll lower because of expected Fed Rate Hikes and other Hawkish activities.We will explore how the US Fed's comments and potential future actions may prompt significant market trends in 2022 and beyond. We'll also attempt to identify how and when the US Fed may disrupt the US markets. We know the actions of the US Fed will prompt some significant trends over the next 12 to 24 months. We know certain assets will likely rise in value as fear settles into the markets because of rising interest rates and deflating asset bubbles. It is just a matter of understanding how the speculative asset bubble of the past 8+ years and how the US Fed may move to pop these speculative bubbles soon.Asset Bubbles Everywhere, The Global Markets Continue To FrothAsset bubbles, such as those created in Cryptos, the US stock market, US Real Estate, and the art/collectible market over the past 5+ years, have visualized the US Fed's easy money results in terms of bubbles.Take a look at this chart showing the growth in certain asset classes since the start of 2019. It is incredible to think that these asset classes have rallied so far and so fast in just over 35 months: The Grayscale Bitcoin ETF rallied more than 1200%. The Technology sector rallied more than 200%. Real Estate rallied more than 85%. The S&P 500 rallied more than 94%. The US Federal Reserve's move to lower interest rates after the 2018 market collapse, which resulted in a December 24, 2018, Christmas Bottom, prompted an incredible rally phase where traders followed the US Fed in piling into assets. As long as the US Fed continued buying assets and kept interest rates near zero, global traders had no reason to fight the US Fed.(Source: StockCharts.com)Is The US Fed About To Pop The Bubble From The Stratosphere?Our research suggests the US Federal Reserve is changing its policy a little late into the game. However, it appears the US and global markets have already "rolled over" in terms of growth trends and expectations. This SPY to QQQ ratio chart highlights that the US markets entered a peaking phase in late July/August 2020 and reached an ultimate peak in February 2021.(Source: TradingView.com)S&P 500 PE Ratio Suggests Investors Are ALL-IN For The Next 90+ YearsIn other words, it appears traders have reached their ceiling in terms of what they believe the US Fed is capable of doing at this stage in the rally. For example, the PE Ratio of the US Stock market ending in 2021 ended just below 30, with a historical high for 2021 near 37. The historical mean is 15.96 – which is still relatively high for the US stock market.Remember, a PE level of 15.96 means any investor buying in at those levels would need a minimum of 15.96 years of a company handing over "every penny of revenue" to the investor (excluding all costs, payrolls, taxes, fees, and other operating expenses) to cover the PE multiple of the investment. So a PE level of 30, as we see at the end of 2021, suggests that stock price valuation levels are at least 60 to 90+ years ahead of real returns.The only thing that can change this historic level of speculation in the markets is a deleveraging/revaluation event.(Source: multpl.com)From the US Fed's Actions To How Traders Should Prepare For Shifting MarketsThis first part of our ongoing research into the US Fed's actions and where they are telegraphing their intents will continue. Part II of this article will investigate how traders should read into these shifting markets and where we're attempting to highlight what has taken place over the past 3 to 5+ years.We've managed to live through an incredible event in history. I can only think of one other time when a global superpower extended this type of credit and support for the worldwide economy. That was the Roman Empire many thousands of years ago.What we experience over the next 20 to 40+ years could be the biggest and most incredible opportunity of your lifetime. The process of deleveraging all this debt and working all this capital through the global markets over the next few decades may present one of the most incredible investment/trading opportunities anyone has ever seen in over 1500 years.Look for my Part II to this article, and we'll continue exploring the current shifts in the US and global stock and asset markets.Finding The Right Strategies That Will Help You Navigate Through Bulls & BearsIf you have struggled with finding opportunities over the past year or so and want to know which are the hottest sectors, or how to protect and grow your capital, then please take a minute to review my Total ETF Portfolio - Triple-Strategy Trading Plan to help you profit from these big market transitions.Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metal