Chris Vermeulen

Chris Vermeulen

TheTechnicalTraders.com Chief Market Strategist

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
Oil falls, gold continues range-trade | Oanda

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
Eurozone: PMI drops slightly as inflation pressures remain | ING Economics

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!
EUR/USD: plan for the American session on June 27 (analysis of morning deals). The euro again fell short of 1.0603  Read more: https://www.instaforex.eu/forex_analysis/314608

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!
China Stocks Go Up As There Might Be More Buybacks Coming

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 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 
Will 2022~23 Require A Different Strategy For Traders/Investors? Part III

Will 2022~23 Require A Different Strategy For Traders/Investors? Part III

Chris Vermeulen Chris Vermeulen 08.01.2022 13:50
Is The Lazy-Bull Strategy Worth Considering? - Part IIIThis last part of our multi-part article compares trading styles amidst the increasing price volatility and extended hyperbolic trending. We'll explore what we've witnessed in the US markets over the past 5+ years and highlight what to expect throughout 2022. Additionally, we'll highlight and feature the strategic advantages of our advanced Lazy-Bull strategies.Lazy-Bull Rides Big Trends & Avoids Excessive RisksMany people are inherently opposed to the Lazy-Bull strategy because they've been conditioned to think trading requires actively seeking various opportunities every week. We don't quite see it that way. Instead, we see the opportunity for growth and consistency existing in taking 4 to 12+ strategic trades per year while the markets set up broad momentum moves/trends. Our objective is not to trade excessively just for the sake of trading. Instead, we want to take advantage of when the markets enter opportunistic periods of trending and ride those trends as far as they go.Sign up for my free trading newsletter so you don’t miss the next opportunity!This example Weekly SPY chart showing our TTI trading strategy highlights the growth phases in various trend stages. Notice the GREEN and RED sections on this chart where our system has identified directional changes in the major price trends. Over the past 11+ years, there have been numerous bullish price trend phases resulting in 12 months to 36+ months bullish price trend trends. These major price cycles make up part of the advantage of the Lazy-Bull strategy.We are not actively seeking the strongest stock symbols throughout these trends. Instead, we are simply relying on the strength of the US major indexes to carry our trades further into profits as the market's trend. The TTI strategy is a "set it – and forget it" type of strategy until the strategy generates a new entry or exit trigger.Volatility & Price Rotation Make 2022 More Dangerous Than 2021 – What Next?Our research shows 2022 will likely continue to exhibit increased price volatility and bigger price rotation. Meaning 2022 could be very dangerous for shorter-term strategy traders as volatility levels may disrupt traditional stop boundaries or other aspects of their defined strategies.It is important to understand how and when these issues creep into a strategy and attempt to move above these issues.Looking at the Q1 through Q4 data using our proprietary Data mining utility, I'll give you my insight related to the data and what I believe is likely to happen in 2022. Remember, this data consolidated the past 28-29 years of trends in the SPY to present these results – going back to 1993. That means that this data is compiled through several various price trends, major market peaks, major market bottoms, and various volatility levels along the way.Q:2022 AnalysisQ1 data suggests an overall positive/upward price trend is likely in 2022, with the Total Monthly Sum across 29 years totaling 37.94. Broken into annual gains, that translates into an expected $1.30 gain in the SPY in Q1:2022.The Total Monthly NEG (negative) range appears to be more than double the Total Monthly POS (positive) range. However, we may see some price volatility in Q1:2022 that surprises the markets. For example, maybe the US Fed makes surprise rate increases? Perhaps it relates to some other foreign market event disrupting the US markets? I don't know what it will be, but I feel some market event in Q1 is likely, and this event may prompt a fairly large downward price rotation in the SPY.Overall, I believe Q1:2022 will end slightly higher than the end of Q4:2021 levels and may see the SPY attempt to break above $490~500 on stronger earnings and continue the market's bullish price phase.Q2:2022 AnalysisThe second quarter seems a bit more stable in overall price appreciation trends. The data shows a shallow NEG value compared to a moderately strong POS value for Q2. Because of this, I believe the second quarter of 2022 will slide into a relatively strong upward Melt-Up type of trend after a potentially volatile Q1:2022.The Total Monthly Sum value is higher in Q2 than in Q1, suggesting Q2 may exhibit a stronger upward momentum as a more apparent trend direction sets up after the Q1 volatility.The US Fed will likely attempt to aggressively reduce its balance sheet throughout Q2 and into Q3:2022 if my expectations are accurate. This may create some additional market volatility in Q2 and Q3:2022 – but I suspect the US Fed will attempt to conduct a lot of this activity relatively quietly – almost behind the market strength/trends.Q3:2022 AnalysisQ3 shows data that is somewhat similar to Q1 overall. I interpret this data as showing moderate bullish trend strength within the typical mid-Summer US market stagnation in trend. Mid-Summer trends tend to be a bit more sideways in nature. Many traders are vacationing, enjoying the Summer weather, and/or not paying attention to market trends and dynamics. Because of this, I expect the July through September months of 2022 to be relatively quiet and mundane.Additionally, we have the mid-term US elections set up in November 2022. The July through September months will be packed with political posturing, campaigning, and various events filled with antics to distract the markets from focusing on real issues. As a result, election years tend to be somewhat quiet – especially in the 2 to 5 months leading up to the actual election date.The end of Q3:2022 and the start of Q4:2022 could see some bigger, more aggressive price trending. The elections, ramping up of the early holiday/Christmas seasons, and the end of Summer may prompt traders to move into undervalued assets or other opportunist trades seeking to ride out an end-of-year trend. Right now may be a great time to identify strong swing/position trades to close out 2022 with some nice profits.Q4:2022 AnalysisQ4:2022 shows a very strong bullish trend potential, with the POS results greatly surpassing the NEG results. Historically, this is because of the traditional Santa Rally phase of the US markets and may play a big role in 2022 if the US economy stays strong throughout 2022.Overall, I expect the US Fed to act in a manner that supports the "transitioning" of the global markets away from excessive risks while attempting to nudge inflationary trends lower. There is talk that the US Fed may take aggressive action to combat inflation, but I see the Fed's actions are more subtle than brutal at this stage.I believe the US Federal Reserve is keenly aware of the fragility of the global markets after many years of excessive easy-money policies. In my opinion, the current market environment is more similar to the late 1960s and 1970s than the 1990s and early 2000 time frame. We've seen a massive influx of capital in the global markets – push all traditional economic metrics "off the charts" after the COVID event. That capital will work itself throughout the global economy, disrupting more at-risk companies and nations' capabilities, but still prompt a moderate growth component for many years to come.Volatility, Trading, And Profiting From Bigger TrendsThe entire point was to discuss the opportunities of moving above the current excessive price volatility and adopting a trading strategy that is more suited to bigger, broader market price trends. In 2019, I warned that 2020 was likely to be very volatile.In February 2021, I warned that 2021 was likely to be very volatile for certain market sectors: WILL 2021 PROMPT A BIG ROTATION IN SECTOR TRENDS? – PART IIIn early January 2020, I warned the US markets may be set up for a "Waterfall Selloff": ARE WE SETTING UP FOR A WATERFALL SELLOFF?Today, I'm suggesting that price volatility will likely peak sometime in 2022 or 2023 and begin to subside as the excesses of the past 8+ years continue to process through what I'm calling the "transitioning phase" of the markets. This market phase is more of a deleveraging and revaluation phase which started in February 2020 – in various sectors. It has now extended into many global economies where excess risk factors are being addressed and revalued (think China, Asia, and other areas).This transitioning process will likely continue in 2022 and 2023, meaning traders need to be prepared for the increased price volatility and adopt a style of trading that will allow them to profit from these bigger trends. This is why I'm suggesting taking a higher-level approach to trade over the next 24 to 36+ months.Certain market trends will still allow traders to pick up some fantastic profits as sectors and various undervalued symbols gain momentum. Overall, though, I feel that 2022 and 2023 will be moderately difficult for shorter-term trading strategies and that a higher-level, longer-term approach may be a much more beneficial approach.Want To Learn More About My Long-Term Investing Strategy?My Technical Investor strategy is uniquely suited toward this type of trading style. It is simple, longer-term, and rises above the moderate price volatility that disrupts many shorter-term trading strategies.Get ready; 2022 will be an excellent year for traders with big trends and bigger volatility. We have to stay ahead of these trends to protect our capital and allow it to grow more efficiently. The risks of more traditionally moderate volatility systems getting chewed up in this extreme environment will continue. So be prepared to move towards a more protective trading style to survive the next 12 to 24 months.If you are interested in learning more about how my Technical Investor (and other trading strategies) can help you protect and grow your wealth in any type of market condition, I invite you to visit  www.TheTechnicalTraders.com 
Financial Sector Starts To Rally Towards The $43.60 Upside Target

Financial Sector Starts To Rally Towards The $43.60 Upside Target

Chris Vermeulen Chris Vermeulen 07.01.2022 22:13
Near November 24, 2021, I published a research article suggesting the Financial Sector, XLF in particular, may bottom and start to move higher, targeting the $43.60 level. After watching XLF rotate lower and form multiple bottoms near $37.50, it appears to finally be starting a new breakout rally phase ahead of Q4:2021 earnings. Will it rally up to my $43.60 target level before the end of January 2022? And how far could it rally beyond my $43.60 target?Using a simple Fibonacci Price Extension allowed me to target the $43.60 level. Duplicating that range and applying it to the top of the $43.60 target level will enable me to see a higher target range of $49.55. This upper target level would result from a 200% Fibonacci price rally from the original price range I identified back in late November 2021.Could it happen? Sure, it could happen. Financials are uniquely positioned to benefit from higher consumer engagement in almost all levels of the economy. Housing, consumer spending, credit/loan origination, fees and services, trading, and other services – they all combine into Banking and Financial Services. I expect Q4:2021 to show robust consumer engagement and housing data, likely prompting many financial firms' strong revenues/earnings results.My original financial sector (xlf) research article included (below) for you to review:The recent downward price rotation in the Financial Sector (XLF) may have frightened some traders, but my research suggests this move is setting up a future bullish price target near $43.60 – a more than +11% move. The end of the year Christmas Rally phase of the markets should drive spending and Q4:2021 expectations strongly into the first quarter of 2022. Unless something big breaks this market trend, traders should continue to expect a “melt-up” bullish price trend through at least early January 2022.Sign up for my free trading newsletter so you don’t miss the next opportunity!The Financial Sector continues to deliver strong earnings and revenue data each quarter. The way consumers and assets prices have reacted after the COVID market collapse says quite a bit about the ability of financial firms to generate future profits. Financial firms actively engage in financial services, traditional banking, real estate, and other investments, and corporate financing. The rising inflation trends and consumer spending activities suggest the US economy is still rallying after the COVID stimulus and recovery.Financials May Rally 10% to 15%, or more, by January 2022My analysis of XLF suggests this recent pullback in price may stall and start a new bullish price rally targeting the $43.60 level – a full 100% Fibonacci Price Extension of the last rally in XLF.This Daily XLF chart shows the extended rally in early 2021 and the brief pause in the price rally between June 2021 and early September 2021. Now that we've entered Q4:2021 and the US economy appears to be strengthening in the post-COVID recovery, my expectations are that most sectors, and the US major indexes, will rally throughout the end of 2021 and into early 2022.This recent pullback in XLF sets up a solid buying opportunity for traders targeting a +10% rally that may last well into January/February 2022 – or longer.Longer-term Financial Trends Suggest Another Rally Above $44 May Start SoonOver the past 6+ months, moderate rally phases in XLF have shown a range of about $4.00 to $4.50. I've highlighted two recent rally phases in XLF on this longer-term XLF Daily chart below with gold rectangles. I believe the next rally from the recent pullback will be similar in size and prompt a moderate upward price move targeting the $43.60 level – or higher.Although there are some concerns related to the continuing recovery in the US markets, I believe the momentum of the US recovery and the strength in the US Dollar will push many US sectors higher over the next 60+ days. Closing out Q4:2021 and starting Q1:2022 with a fairly strong rally that may surprise many traders.The Financial sector is likely to present very strong Q4:2021 revenues and earnings data as long as the global markets don't push some crisis event or other issue that could detract from the US economic recovery. Right now, the biggest issues seem to be China and Europe.Concluding thoughtsMy opinion is that any moderate price weakness in the Financial sector will be short-lived and will resolve into a bullish price rally, or "melt-upward" type of trend, as we move into early December 2021. Once the US Debt Ceiling issue is resolved, I believe the Financial sector will begin a very strong rally pushing prices above $44 or $45 as Q4:2021 earnings expectations drive investors' focus into Technology, Consumer Retail, Financials, and Real Estate.The strength of the US Dollar is driving large amounts of capital into US assets and stocks right now. Based on my research, it is very likely that the US major indexes and certain sectors will continue to rally into early January 2022. If my analysis proves accurate, we may see a +11% to +18% rally in XLF before the end of January.If you are interested in learning more about how my strategies can help you protect and grow your wealth in any type of market condition, I invite you to visit www.TheTechnicalTraders.com 
Why Successful Traders Make More By Trading Less

Why Successful Traders Make More By Trading Less

Chris Vermeulen Chris Vermeulen 06.01.2022 18:20
During my 25 years of trading and mentoring others, I have been dragged through the coals a few times. And by that, I mean I have; blown up a few trading accounts; had some massive gains only to watch them turn into worthless penny stocks, and; I even had one trade based around the volatility index blow up and become worthless the day after I bought it. I've had many other painful and costly trading experiences between those as well, and I know there will be more in the future. This leads me to the first topic I would like to talk about – learning through experience.#1 - Learned Through Expensive ExperiencesI help a lot of traders each year from all walks of life. They range from 18 to 85+ years of age. Some are total newbies, financial advisors, money managers, all the way up to billionaires. What is apparent is that the most successful traders (those who make money year after year) have the same things in common with how they trade. They all: walk a straight and somewhat unemotional line outside of learning from losses and trading mistakes.  focus on managing their capital because they understand just how quick and easy it is to lose money, which is why they focus and follow strict rules. follow very specific trading strategies/rules and do not trade on emotions. protect their capital ALWAYS with stops and position management only trade specific trade setups that put the probabilities in their favor focus heavily on index and bond positions say their trading feels slow/boring most of the time trade multiple strategies#2 - Ignore High Flying, News, Manipulated, and Hype Based MovesIt's hard not to participate in some of these wild rallies and stock crashes we have seen over the last couple of years. It's a natural tendency to want to take part in what everyone else is doing, and the lure of instant oversized gains is powerful. But, unfortunately, most individuals who get involved in these trades lose money for a good reason. They are trading based on greed/emotions with no real measured trading plan.Don't get me wrong; I'm not saying, "don't trade these stocks." In fact, many of these are incredible opportunities for experienced traders. These types of stocks generally become ideal for day traders and even momentum and aggressive swing traders. They can provide some quick extra cash. But that's what these types of trades are - small, fast, higher risk trades that only a seasoned trader should trade.Sign up for my free trading newsletter so you don’t miss the next opportunity!For some reason, traders come into this business thinking it's a game and believes these are the types of trades that should always be traded. They take oversized positions only to experience significant damaging losses to their account.I conducted a survey a little while back, and the survey results blew my mind. Most people want to trade the volatile media-driven hype stocks and commodities. People fall in love with specific assets and want to trade only those, even if there are better assets and more efficient ways to pull money out of the market.The results below frustrate the heck out of me because, to me, it makes no logical sense if you are in the market to make money.Trader Survey Results Confirm Why it is Hard To Make MoneyThe above results make sense as studies have proven that humans react seven times more based on emotions versus logic. This is why the stock market has such wild price swings with Euphoric blowoff tops and Panic washout lows.People are highly addicted to riding their emotions (adrenaline/dopamine), and they love the rush of fast-moving stocks and gambling, which is why the markets are regulated, along with casinos, for that matter. Simply put, people lose control of common sense and logic when they are on tilt with emotion.Fast-moving assets with extreme volatility act as a bug-zapper light, which attracts bugs, only to kill anything that gets too close. In this case, new traders think they can make quick and easy money from hot stock in the news.Trading is a numbers game, and it requires logic, rules,and a proven strategy to win long-term.Based on the survey we did with thousands of traders, you can see that making the same amount of money with fewer trades and lower risk is not that exciting. Instead, traders prefer high volatility assets like metals, and natural gas, which are manipulated and have large wild price swings.Also, from a trading statics point of view, those two are among the most difficult to trade.As a pilot, I know the importance of keeping calm, having checklists/rules, and systems in place. Without them, you will eventually crash and burn; it is just a matter of time. The same holds true for trading and investing in that you need to trade what makes the most money, trade only the best setups, and have the lowest risk.Hottest Symbols vs Biggest TrendsBottom line, I don't care about trading every day or trying to catch the hottest symbols everyone is talking about. Instead, I care about catching and riding the biggest trends in the US stock index and the Treasury Bond ETFs. These are highly liquid sentiment trends that produce oversized gains each year. This is also the reason ETFs have taken over the mutual fund market and why financial advisors and hedge funds primarily trade/own stock index funds and bonds.Through the Technical Index and Bond ETF Trading strategy, I help individuals and advisors trade more efficiently. This strategy trades SPY, SSO, SPXL, QQQ, QLD, TQQQ and TLT, TBT, TMF, which generate large, compounded returns as shown in the chart below:This proprietary ETF trading strategy is straightforward and only generates about 3 to 10 trades per year. Most traders dislike this type of strategy because it lacks lots of action and volatility. If you noticed, you won't find many professional advisors telling you to jump into the fast-moving hype stocks, and for a good reason - they know better and want to protect your hard-earned capital. #3 - The Power Of Slow & Steady Gains Are Mind-Bending!As I learned a long time ago (and this holds true for almost everything across the board), learning something new, like mastering how to trade slower, consistent strategies, can take some getting used to. Everything new will always be a challenge, but once you master something, it becomes simple, low stress, and you will experience more consistent results.Take a look at this data from an Atalanta Sosnoff report. This should get my point across about how powerful slow, boring, consistent returns pack a powerful punch and why thousands of traders from 82 countries follow my index and bond trading signals.Source: Eagle Asset Management.The Technical Index & Bond ETF trading strategy has consistently produced positive annual results (CGAR average ROI 15% - 51% depending on ETF leverage, only 7 - 21% max drawdown). If you traded with the 2x or 3x ETFs, you would have crushed the S&P 500 every year and experienced that rush feeling that leverage/volatility provides but within a safer/smarter way.Passive trading styles like this are a bit different from those you may have traded in the past. My objectives consist of four very important concepts:Protect Capital At All Times.Trade Only When Strategically Opportunistic (probabilities are favorable).Trade Efficiently Using Bonds As Trade When Fear Rises among traders and investors.Move to cash or money market fund when the index and bonds are both out of favor.Concluding Thoughts:In short, I hope this has helped confirm your thinking of trading less and focusing on more solid trade setups. Or maybe it has opened your eyes to the world of slow and steady gains wins the race, with much less stress and effort.If you are interested in learning more about TIBT – Technical Index & Bond Trader, I invite you to visit www.TheTechnicalTraders.com/twa 
Will 2022~23 Require Different Strategies For TradersInvestors Part II

Will 2022~23 Require Different Strategies For TradersInvestors Part II

Chris Vermeulen Chris Vermeulen 06.01.2022 00:19
Is The Lazy-Bull Strategy Worth Considering? Part III started this article by highlighting how difficult some 2021 strategies seemed for many Hedge Funds and Professional Traders. It appears the extreme market volatility throughout 2021 took a toll on many systems and strategies. I wouldn't be surprised to see various sector ETFs and Sector Mutual Funds up 15% to 20% or more for 2021 while various Hedge Funds struggle with annual returns between 7% and -5% for 2021.After many years in this industry and having built many of my own strategies over the past decade, I've learned one very important facet of trading strategy development – expect the unexpected. A friend always told me to "focus on failure" when we developed strategies together. His approach to strategy design was "you develop it do too well in certain types of market trends and volatility. By focusing on where it fails, you'll learn more about the potential draw-downs and risks of a strategy than ignoring these points of failure". I tend to agree with him.In the first part of this research article, the other concept I started discussing was how traders/investors might consider moving away from strategies that struggled in 2022. What if the markets continue trending with extreme volatility throughout 2022 and into 2023? Suppose your system or strategy has taken some losses in 2022, and you have not stopped to consider volatility or other system boundaries as a potential issue. In that case, you may be looking forward to a very difficult 12 to 14+ months of trading in 2022 and 2023.Volatility Explodes After 2017Current market volatility/ATR levels are 300% to 500% above those of 2014/2015. These are the highest volatility levels the US markets have ever experienced in the past 20+ years. The current ATR level is above 23.20 – more than 35% higher than the DOT COM Peak volatility of 17.15.As long as the Volatility/ATR levels stay near these elevated levels, traders and investors will likely find the markets very difficult to trade with strategies that cannot properly adapt to the increased risks and price rotations in trends. Simply put, these huge increases in price volatility may chew up profits by getting stopped out on pullbacks or by risking too much in terms of price range/volatility.Sign up for my free trading newsletter so you don’t miss the next opportunity!The increased volatility over the past 5+ years directly reflects global monetary policies and the COVID-19 global response to the crisis. Not only have we attempted to keep easy money policies for far too long in the US and foreign markets, but we've also been pushed into a hyperbolic price trend that started after 2017/18, which has increased global debt consumption/levels to the extreme.2022 and 2023 will likely reflect a very strong revaluation trend which I continue to call a longer-term "transition" within the global markets. This transition will probably take many forms over the next 24+ months – but mostly, it will be about deleveraging debt levels and the destruction of excess risk in the markets. In my opinion, that means the strongest global economies may see some strength over the next 24+ months – but may also see extreme price volatility and extreme price rotation as this transition takes place.Expect The Unexpected in 2022 & 2023The US major indexes had an incredible 2021 – rallying across all fears and COVID variants. The NASDAQ and S&P500 saw the biggest gains in 2021 – which may continue into early 2022. Yet I feel the US markets will continue to transition as the global markets continue to navigate the process of unwinding excess debt levels and potentially deleveraging at a more severe rate than many people expect.Because of this, I feel the US markets may continue to strengthen as global traders pile into the US Dollar based assets in early 2022. Until global pressures of deleveraging and transitioning away from excesses put enough pressure on the US stock market, the perceived safety of US assets and the US Dollar will continue as it is now.(Source: www.StockCharts.com)Watch For Sector Strength In Early 2022 As Price-Pressure & Supply-Side Issues Create A Unique Opportunity For Extended Revenues/ProfitsI believe the US markets will see a continued rally phase in early 2022 as Q4:2021 revenues, earnings, and economic data pour in. I can't see how any global economic concerns will disrupt the US markets if Q4:2021 data stays stronger than expected for US stocks and the US economy.That being said, I do believe certain sectors will be high-fliers in Q1:2022 and Q2:2022 – at least until the supply-side issues across the globe settle down and return to more normal delivery expectations. This means sectors like Automakers, Healthcare, Real Estate, Consumer Staples & Discretionary, Technology, Chip manufacturers, and some Retail segments (Construction, Raw Materials, certain consumer products sellers, and specialty sellers) will drive a new bullish trend in 2022.The US major indexes may continue to move higher in 2022. They may also be hampered by sectors struggling to find support or over-weighted in symbols that were over-hyped through the end of 2020 and in early 2021.I have been concerned about this type of transition throughout most of 2021 (particularly after the MEME/Reddit rally phase in early 2021). That type of extreme trending usually leads to an unwinding process. I still don't believe the US and global markets have completed the unwinding process after the post-COVID extreme rally phase.(Source: www.StockCharts.com)Will The Lazy-Bull Strategy Continue To Outperform In 2022 & 2023?This is a tricky question to answer simply because I can't predict the future any better than you can. But I do believe moving towards a higher-level analysis of global market trends when the proposed "transitioning" is starting to take place allows traders to move away from "chasing price spikes." It also allows them to position for momentum strength in various broader market sectors and indexes.I suspect we'll start to see annual reports from some of the biggest institutional trading firms on the planet that show feeble performance in 2021. This recent article caught my attention related to Quant Funds in China.I believe we will see 2022 and 2023 stay equally distressing for certain styles of trading strategies while price volatility and an extreme deleveraging/transitioning trend occur. Trying to navigate this type of choppy global market trending on a short-term basis can be very dangerous. I believe it is better to move above all this global market chop and trade the bigger momentum trends in various sectors and indexes.Part III of this research article will focus on Q1 through Q4 expectations for 2022 and 2023. I will highlight broader sector/index trends that may play out well for investors and traders who can move above the low-level choppiness in the US and global markets.WANT TO LEARN MORE ABOUT THE TECHNICAL INVESTOR AND THE TECHNICAL INDEX & BOND TRADING STRATEGIES?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 begin 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 take a few minutes to visit the Technical Traders website to learn about our Technical Investor and Technical Index and Bond Trading strategies and how they can help you protect and grow your wealth.Have a great day!
Will 2022~23 Require A Different Strategy For TradersInvestors?

Will 2022~23 Require A Different Strategy For TradersInvestors?

Chris Vermeulen Chris Vermeulen 05.01.2022 16:33
Is The Lazy-Bull Strategy Worth Considering? - Part IMany traders struggled in 2021 with the extended price volatility and sideways price trends. Recently, news that Bridgewater's 2021 results were saved by December's +7.8% gain (Source: Yahoo! Finance) leads me to believe a number of independent funds and investors are going to have a tough end-of-year return for 2021.Average Hedge Fund Returns Less Than 25% Of The 2021 S&P500 GainsThe volatility in the US and global markets throughout most of 2021 took a toll on traditional trading strategies. With the VIX trading above 12 on average throughout almost all of 2021, traditional trading strategies may not have been able to adjust to this increased volatility in the US markets – getting chewed up along the way. I wrote an article series about how computerized trading strategies can fail when volatility levels increase beyond traditional boundaries a few weeks ago. You can read the first of the three part series, US Federal Reserve Actions 1999 to Present - What's Next?, and then link to the other two.(source: Aurum.com)Many of the best Hedge Funds could barely squeeze out a profit in 2021. While the S&P500 rallied more than 27% in 2021, you can see from the graphic above that the average returns for Hedge Funds in 2021 were a paltry +6.24%.Sign up for my free trading newsletter so you don’t miss the next opportunity! I expect that the US and global markets will continue to stay in extended price volatility ranges throughout all of 2022 and into 2023 as broad global market transitioning continues to take place. This expectation leads me to conclude that the “Lazy-Bull” strategy may be better suited for traders/investors over the next 24+ months than more active trading strategies.What Is The “Lazy-Bull” Strategy?The Lazy-Bull strategy is a term I use for my proprietary strategies – The Technical Investor and the Technical Index & Bond Trader. I call it the Lazy-Bull strategy because it is straightforward and only generates about 3 to 10 trades per year (on average). Many traders dislike this type of strategy because it it does not require many trades and does not provide the rush/roller coaster ride that many think they should feel while trading, which is not how it should be. Having said that, overall, this strategy has consistently produced positive annual results (CGAR average ROI 15% - 51% depending on ETF leverage, and only 7 - 21% drawdown) – beating the SPY almost every year. If you traded with the 1x, 2x, or 3x ETFs then you would have crushed the S&P 500 every year, and experienced that positive rush feeling that leverage/volatility provides.My trading style is a bit different than most other traders. My objectives consist of three very important concepts:Protect Capital At All TimesTrade Only When Strategically Opportunistic (probabilities are favorable)Trade Efficiently Using Bonds As Trade When Fear Rises among traders and investors.Through the Technical Investor and Technical Index and Bond Trading strategies, I help individuals and advisors learn how trading more efficiently using the Lazy-Bull strategies is for generating large compounded returns as shown in the SP500 chart below.I'll go further into detail regarding my strategies as we continue this multi-part article.Reading Into Q1:2022 – What To Expect?Right now, the world is waiting on Q4:2021 earnings and economic data. The first Quarter of 2022 should be very exciting for US traders as the year-end momentum of 2021 may carry forward into Q1:2022 with solid revenues and earnings. After that, we move into Q2:2022, which may be much more volatile overall.Let's look at our proprietary data mining utility to see what we might expect from the markets in the first Quarter of 2022.January 2022 has more than a 1.41:1 probability ratio of staying positive based on the past 29 years of historical data. Ideally, the average positive and negative monthly ranges are about equal – nearly $5.00. The accumulated monthly data shows that January is usually overall positive by at least $2.50 to $5.00.February 2022 has a much higher chance of extreme volatility. February 2022 shows a much greater positive to negative ratio while the possibility of a bullish February drops to a 1.33:1 probability ratio. Overall, I would suspect larger price volatility in mid to late February 2022 as the markets attempt to transition into late Q1 expectations.March 2022 has the same 1.41:1 probability ratio as January, yet the overall likelihood of extended downside price trends is about 20% greater than January.My analysis of this data suggests January and March of 2022 may surprise traders with a potential for a significant upward price move headed into Q2:2022. I believe Q4:2021 will also surprise traders as US consumers continue to engage and spend. This will lead to higher expectations for Q1:2022, which may set up a bit of a rally ahead of April/May 2022.Q1 and Q2, historically, seem to be strong in terms of traditional market growth and expectations. Yes, there have been instances when unexpected volatility disrupts the more customary types of trends – and 2022 may be one of those years. Our research shows the US Fed may make early efforts to move away from extreme easy money policies – which may shock the markets.Our research suggests the possibility of a 7% to 10% rally in the SPY in the First Quarter of 2022. If our extended research is accurate, our predictive modeling suggests more extreme price volatility may also play a significant role in how price trends/moves in 2022. Is The Lazy-Bull Strategy Worth Considering?In Part II of this article, we'll review the entire year of 2022 Quarterly Data Mining results and present more evidence that 2022 and 2023 may be years where a shift in strategy plays an important role for traders/investors. With the VIX trading above 15 more consistently, many strategies will get chewed up and spit out as the markets roll 9% - 15% up and down while attempting to transition away from the post-COVID stimulus.Get ready; 2022 will be an excellent year for traders with significant trends and bigger volatility. We just have to stay ahead of these trends to protect our capital and allow it to grow more efficiently. The risks of more traditionally moderate volatility systems getting chewed up in this extreme environment will continue. So be prepared to move towards a more protective trading style to survive the next 12 to 24 months.Want To Learn More About The Technical Investor and The Technical Index & Bond Trading Strategies?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 take a few minutes to visit the Technical Traders website to learn about our Technical Investor and Technical Index and Bond Trading strategies and how they can help you protect and grow your wealth. Have a great day!
Sector Themes In Play In The Markets For 2022

Sector Themes In Play In The Markets For 2022

Chris Vermeulen Chris Vermeulen 31.12.2021 16:45
As 2021 closes, it’s time to consider how sector themes in the markets are likely to perform in 2022. Years like 2021 saw a solid broad-based performance in many stock market sectors. Relatively simple approaches such as Indexing and Sector Rotation did well. But with macro changes in play and many uncertainties for 2022, we may very well see broad indexes underperforming while individual sectors dominated by a few stocks really shine. Dips will continue to be bought unless something significant changes. But let’s not forget that we’re long overdue for a substantial correction. Significant risk catalysts are:Fed actions.International conflicts (i.e., Russia and China).Pandemic developments that are not currently known.There’s always the risk of the unknown – the literal definition of a “Black Swan” event. We shouldn’t get too complacent, knowing that we may need to get defensive to protect capital suddenly. When it’s time to be defensive, let’s not forget that CASH IS A POSITION!sector theme DRIVERS FOR 2022Many uncertainties about Covid and the lingering effects on the economy remain. Inflation has roared back to 30-year highs. Strong employment numbers and consumer spending are fueling significant growth in corporate earnings. We also have a shift in bias at the Fed on interest rates and quantitative easing. These are the “knowns” and are theoretically priced in.For these reasons and more, we should expect more of a “Stockpicker’s Market” in 2022. Certain sectors will do well and weather corrections better than the broader markets.Sign up for my free trading newsletter so you don’t miss the next opportunity! Even short-term traders can gain an edge by paying attention to what sectors are strongest. Traders tend to benefit most from playing the strongest stocks in the strongest sectors for bullish trades and choosing the weakest stocks in weaker sectors for bearish trades. That “tailwind” can make a significant difference in results.Let’s look at some sector themes and individual names to keep an eye on in 2022.ECONOMIC NORMALIZATIONA long-anticipated return to a “normal” economy will continue to be a theme -- we just don’t know if that will be Post-Covid or Co-Covid. Or when. Air travel, theme parks, hotels, cruise lines, etc., have all suffered in the persistent Pandemic. What does seem to be changing is the idea of a “new normal” where virus variants may be with us for years to come. We will adjust socially and economically to that for the foreseeable future. DAL, UAL, LUV, AAL are airlines to watch, and the JETS ETF may be a good way to play a general recovery in this sector.5G INTERNETThe much-hyped rollout of 5G network technology had its share of setbacks and technology disappointments. But 2022 should see the 5G deployment start to take off as technical issues are worked out, and the promise of widespread coverage with transformational performance becomes real. In the background supplying the 5G infrastructure are AMD, QCOM, ADI, MRVL, AMT, XLNX, and KEYS. Along with infrastructure and testing companies, shares of major carriers T, TMUS, and VZ languished for much of the second half of 2021 and looked poised for recovery in the coming year.ARTIFICIAL INTELLIGENCEIn all its various forms (including autonomous vehicles), AI will remain a developing trend. Big players in the space to watch include MSFT, AMAT, GOOGL, NVDA, AAPL, and QCOM. EVs and AUTONOMOUS VEHICLESElectric Vehicles (EVs) are nearing an inflection point where widespread adoption is poised to take off. Technology and cost competitiveness has improved where some EVs will reach price parity with their traditional internal combustion counterparts.While there are many smaller players in the EV space, automotive stalwarts F, GM, and TM are investing very heavily. TSLA has been grabbing the headlines, but many others want to stake out their territory in the space, including whole tiers of manufacturers and infrastructure enablers like WKHS, XPEV, NKLA, and CHPT.MATERIALS and MININGGold, silver, and related miners underperformed for much of 2021 and now look poised for a recovery year as inflation, and monetary concerns grow. GLD, SLV, GDX, GDXJ, SIL, SILJ look good as both longer and mid-term plays. Metals and miners may get hit initially with a significant downturn in stocks but could ultimately demonstrate their safe-haven potential. Specific to the growth in EVs, battery technology, etc., copper, lithium, and related basic materials should see stronger demand ahead. FCX looks particularly interesting as a dual play on gold and copper. LIT may be a good ETF play on lithium battery technology.SEMICONDUCTORSThe market for chips is primed for exponential growth. EV’s have about ten times the number of specialty semiconductors as conventional vehicles. AI, crypto, 5G, mobile devices, and ubiquitous computing should drive growth in the semiconductor sector for some time to come.REAL ESTATEReal Estate and Homebuilders should continue to do well while employment numbers remain strong and if interest rates don’t rise too quickly. The inventory shortage in most real estate markets will likely persist well into the new year.Storage REITs like PSA, LSI, and CUBE have been big winners in the Covid economy and still have room to run.SUMMARYMany sectors still look bullish after gains in 2021. But there are “storm clouds” on the horizon, and we must not take future performance for granted.Lastly, one of the simplest ways to assess how sectors are measuring up is to watch the charts for the S&P SPDR series sector ETFs and a few others. Here are some notable ones to watch:These can give us a good starting place to look for leading stocks in winning sectors as the year unfolds.Let’s remain vigilant for possible market corrections and may the wind be at our backs!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 check it out, click here: TheTechnicalTraders.com.Enjoy your day!
S&P 500 - ATH?

S&P 500 - ATH?

Chris Vermeulen Chris Vermeulen 30.12.2021 22:59
A very late Santa Rally appears to have been set up in the US markets as we close in on the end of 2021. The US markets have already started a melt-up trend – which is what I expected to happen prior to the bout of volatility over the past 30+ days. A Very Late Santa Rally Could Prompt A Powerful Move Upward A very late positive shift in the US major indexes may prompt a powerful upward price trend in early 2022. I expect that Q4:2021 earnings and revenues will continue to impress traders while the US Dollar strengthens above 95. This combination of a strong US economy with a stronger US Dollar will continue to attract foreign capital investment in US equities in early 2022. Traders won't want to miss the potential for a Q1 and Q2 rally phase in the US markets IF the US Fed stays moderately inactive throughout the first half of 2022. Sign up for my free trading newsletter so you don’t miss the next opportunity! Traders were concerned that the US Fed and Inflation would prompt a sudden shift by the US Fed. Still, I believe the new Omicron COVID virus and the shift away from hyper-inflationary trends may alter how the Fed sees the global economy in 2022. The US markets may be strengthening simply because of the additional stimulus and strong US consumer activity from the recovery/reflation trade momentum (late 2020 and almost all o 2021). The early 2022 trends may carry momentum into the first two Quarters of 2022 with slowly diminishing strength overall. Please take a minute to review our ADL Price Predictions for 2022 in this research article: The Technical Traders S&P 500 Rallying To New All-Time Highs To Close Out 2021 The S&P 500 recently rallied to new all-time highs just days before the end of 2021. This move suggests traders are shifting away from broader market concerns and starting to pay attention to the pending Q4:2021 earnings and revenue data and the 2021 Annual Data that will hit over the next 30 to 60+ days. Even though the markets are looking for any reason to spike the VIX (volatility), I believe the momentum behind this rally phase is going to continue to drive the S&P 500 up towards 5000 – or higher. My expectations are that we will see a fairly strong 5% to 8% rally in early 2022 from the 2021 end-of-year price levels. I believe the US market is attracting lots of foreign market capital as long as the US Fed does not do anything to topple the current market dynamics. NASDAQ Is Struggling To Reach New All-Time Highs, But Could Explode Higher In Early 2022 Even though the NASDAQ appears to be more volatile than the S&P500 and Dow Jones, it stands a very good chance of exploding higher in early 2022 as Q4:2021 earnings are announced, and end-of-year revenues and US economic data are presented in January/February. I expect that technology will continue to dominate trends related to how US consumers spend their time/money in 2022 – especially if we continue to go through more COVID virus waves. The sectors I'm watching in 2022 are Housing, Technology, Healthcare, Consumer Staples/Discretionary, Metals/Mining, and Retail. If there are any signs of concern in the US/Global markets, I expect to see these concerns appear in the strongest sectors right now (Consumer, Retail, Metals, Housing, and Technology). The US Fed will probably not take any severe actions in Q1:2022 and maybe talk about raising rates in Q2:2022. This means the US markets will continue to attract foreign capital, and traders need to prepare for a potentially explosive upside price trend in the NASDAQ before March 2022.
Has the Santa Rally arrived late this year? Are traders trying to position for a Q4 earnings blowout before the end of 2021?

Has the Santa Rally arrived late this year? Are traders trying to position for a Q4 earnings blowout before the end of 2021?

Chris Vermeulen Chris Vermeulen 28.12.2021 21:50
Predictive Modeling Suggests 7~10% Rally In SPY/QQQ Before April 2022 Has the Santa Rally arrived late this year? Are traders trying to position for a Q4:2021 earnings blowout before the end of 2021? Let’s take a look at what predictive modeling can help us understand. The recent rotation in the SPY/QQQ has shaken some traders’ confidence in the ability of any potential rally – blowing up expectations of a Santa Rally. Yet, here we are with only five trading days before the end of 2021, and the US major indexes are nearing all-time highs again. PREDICTIVE MODELING SHOWS A CONTINUED MELT-UP TREND THROUGH JAN/FEB 2022 Our Adaptive Dynamic Learning (ADL) Predictive Modeling system may hold the answers you are looking for. Let’s look at a few charts to prepare for what may unfold over the next 60+ days. First, this SPY Weekly ADL chart highlights the range of potential outcomes going forward into March/April 2022. The further out we attempt to predict using this technique, the more opportunity exists for outlier events (unusual price trends/activity). Yet, the SPY ADL predictive modeling system suggests a very strong upward price trend in January/February 2022, with a possible narrowing of price in late February – just before another big move higher in March/April 2022. There is an outlier trend that appears below the current price trend. So far, this outlier trend has not aligned with price action over the past 5+ weeks and shows an alternate support level near $430. Sign up for my free trading newsletter so you don’t miss the next opportunity! The ADL predictive modeling system suggests a broad market uptrend is likely in the SPY, with an initial target near $490 possibly being reached by early February. If Q4:2021 earnings come in strong and revenues continue to impress the markets, we may see a rally above the $490 level before the end of February 2022. After the tightening of price near the end of February 2022, it appears the SPY will consolidate near $480, then enter another rally phase and attempt to rally above $500. This type of price action aligns with solid Q4:2021 expectations and continued Q1:2022 economic growth. ADL PREDICTS QQQ WILL RALLY ABOVE $430 BY MARCH/APRIL 2022 This Weekly QQQ ADL Chart highlights a similar type of price trend compared to the SPY. The QQQ appears to have a more consistent upward trend bias with a fairly solid upward price channel trending through the first four months of 2022. It appears the QQQ will rally to levels above $420 by mid-February 2022, then stall for a few weeks, then resume a rally trend through most of March 2022 and into early April 2022. After mid-April 2022, it appears the QQQ will consolidate, again, near the $420~$425 level. This ADL prediction suggests Technology, Healthcare, Consumer stables/discretionary, Real Estate, and other sectors will continue to do well in Q1:2022 and beyond. A rally of 7% to 10% in the first few months of 2022 may send the US markets dramatically higher throughout the rest of 2022 if economic growth stays strong. The ADL predictive modeling system has proven to be a valuable tool in understanding what lies ahead for the markets. Not only does it show a range of potential outcomes and price targets, but it also helps us understand if and when price breaks beyond these ADL predictive ranges (which translates into a unique price anomaly). Price anomalies happen. The COVID-19 price collapse represented a unique price anomaly in 2020. This event, somewhat like a Black Swan event, hit the markets hard and quickly sent prices tumbling. It is important to understand that these events can still happen in the future and can dramatically disrupt expected price trends. Still, if the ADL predictive price trends continue to be accurate, it looks like Q1:2022 and Q2:2022 may continue to see moderate upward price trends with bouts of sideways volatility taking place. The range of the ADL predictive levels (the MAGENTA LINES) shows the type or expected volatility in the markets for Q1 and Q2. It appears volatility will stay elevated over the next 6+ months – so get ready for some big, explosive price trends. Watch for the markets to continue to melt higher over the next few weeks as traders prepare for Q4:2021 earnings to start hitting in early January 2022. We may see the US markets start another big upside price trend – possibly breaking to new all-time highs soon enough. WANT TO LEARN MORE ABOUT PREDICTIVE MODELING? 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. Please take a minute to visit www.TheTechnicalTraders.com to learn about our Total ETF Portfolio (TEP) technology and how it can help you identify and trade better sector setups. We’ve built this technology to help us identify the strongest and best trade setups in any market sector. Every day, we deliver these setups to our subscribers along with the TEP system trades. You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results. Have a great day!
Fear May Drive Silver More Than 60% Higher In 2022

Fear May Drive Silver More Than 60% Higher In 2022

Chris Vermeulen Chris Vermeulen 22.12.2021 23:17
As the US and global markets rattle around over the past 60+ days, many traders have failed to identify an incredible opportunity setting up in both Gold and Silver. Historically, Silver is extremely undervalued compared to Gold right now. In fact, Gold has continued to stay above $1675 over the past 12+ months while Silver has collapsed from highs near $30 to a current price low near $22 – a -26% decline. Many traders use the Gold/Silver Ratio as a measure of price comparison between these two metals. Both Gold and Silver act as a hedge at times when market fear rises. But Gold is typically a better long-term store of value compared to Silver. Silver often reacts more aggressively at times of great fear or uncertainty in the global markets and often rises much faster than Gold in percentage terms when fear peaks. Understanding the Gold/Silver ratio The Gold/Silver ratio is simply the price of Gold divided by the price of Silver. This creates a ratio of the price action (like a spread) that allows us to measure if Gold is holding its value better than Silver or not. If the ratio falls, then the price of Silver is advancing faster than the price of Gold. If the ratio rises, then the price of Gold is advancing faster than the price of Silver. Right now, the Gold/Silver ratio is above 0.80 – well above a historically normal level, which is usually closer to 0.64. I believe the current ratio level suggests both Gold and Silver are poised for a fairly big upward price trend in 2022 and beyond. This may become an exaggerated upward price trend if the global market deleveraging and revaluation events rattle the markets in early 2022. Sign up for my free trading newsletter so you don't miss the next opportunity! I expect to see the Gold/Silver ratio fall to levels below 0.75 before July/August 2022 as both Gold and Silver begin to move higher in Q1:2022. Some event will likely shake investor confidence in early 2022, causing precious metals to move 15% to 25% higher initially. After that initial move is complete, further fallout related to the deleveraging throughout the globe, post-COVID, may prompt an even bigger move in metals later on in 2022 and into 2023. COVID Disrupted The 8~9 Year Appreciation/Depreciation Cycle Trends In May 2021, I published an article suggesting the US Dollar may slip below 90 while the US and global markets shift into a Deflationary cycle that lasts until 2028~29 (Source: The Technical Traders). I still believe the markets will enter this longer-term cycle and shift away from the broad reflation trade that has taken place over the past 24+ months – it is just a matter of time. If my research is correct, the disruption created by the COVID virus may result in a violent reversion event that could alter how the global markets react to the deleveraging and revaluation process that is likely to take place. I suggest the COVID virus event may have disrupted global market trends because the excess capital poured into the global markets prompted a very strong rise in price levels throughout the world in real estate, commodities, food, technology, and many other everyday products. The opposite type of trend would have likely happened if the COVID event had taken place without the excessive capital deployed into the global markets. Demand would have diminished. Price levels would have fallen. Demand for commodities and other technology would have fallen too. That didn't happen. The opposite type of global market trend took place, and prices rose faster than anyone expected. Markets Tend To Revert After Extreme Events As much as we may want to see these trends continue forever, any trader knows that markets tend to revert after extreme market trends or events. In fact, there are a whole set of traders that focus on these “reversion events.” They wait for extreme events to occur, then attempt to trade the “reversion to a mean” event in price action. My research suggests the COVID virus event may have created a hyper-cycle event between early 2020 and December 2021 (roughly 24 months). My research also suggests a global market deleveraging/revaluation event may be starting in early 2022. If my research is correct, the recent lows in Gold and Silver will continue to be tested in early 2022, but Gold and Silver will start to move much higher as fear and concern start to rattle the markets. As asset prices revert and continue to search for proper valuation levels, Gold and Silver may continue to rally in various phases through 2028~2030. Initially, I expect a 50% to 60% rally in Silver, targeting the $33.50 to $36.00 price level. For SILJ, Junior Silver Miners, I expect an initial move above $20 (representing a 60%+ rally), followed by a follow-through rally targeting the $25.00 level (more than 215% from recent lows). I believe the lack of focus on precious metals over the past 12+ months may have created a very unusual and efficient dislocation in the price for Silver compared to Gold. This setup may present very real opportunities for Silver to rally much faster than Gold over the next 24+ months – possibly longer. If my research is correct, the Junior Silver Miners ETF, SILJ, presents a very good opportunity for profits. Want to learn more about the movements of Gold, Silver, and their Miners? 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. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP – Total ETF Portfolio. Pay particular attention to what is quickly becoming my favorite strategy for income, growth, and retirement - The Technical Index & Bond Trader. Have a great day!
Are You an Options Buyer or an Options Seller?

Are You an Options Buyer or an Options Seller?

Chris Vermeulen Chris Vermeulen 17.12.2021 08:20
Options are an increasingly popular financial product that gives traders numerous ways to manage risk while significantly leveraging capital. They are a powerful trading “tool” that can be bought, sold, and combined in a seemingly limitless number of ways to achieve a specific objective. One of the bigger questions for new -- and even experienced traders -- is whether to be an options buyer or seller. Or both.   QUICK REVIEW The price of an option is the sum of intrinsic and extrinsic (time) values. Intrinsic value is the mathematical difference between the option strike price and the price of the underlying.  Extrinsic value is variably priced based on the expected volatility of the underlying and remaining time before the option expires.  Let’s go through some of the pros and cons of buying versus selling options. BUYING OPTIONS Buying options seems like a simple enough strategy. The trader picks a bullish or bearish direction and goes long (buys) a put or a call corresponding to the stock's anticipated directional move. Be sure not to confuse being long an option and being long underlying. For example, if a trader is long a put, due to inverse correlation that is akin to being short the underlying. But being long an option is not as simple or easy as it appears. The first challenge with a long option is being right about the direction of the stock. The underlying has to move in the expected direction for the option to go up in value and possibly generate a profit.  The option buyer also has to be correct about the magnitude of the underlying move. If a trader buys an option and the amount of the move is not greater than what was spent for the time value, the option won't be profitable. For example, if $2 is spent for options time value, but the stock only moves $1, it is quite possible to be right about direction but still not profitable.  Time Value The time value in options is a wasting asset as it will always approach $0 at expiration, so that works in favor of option sellers and against option buyers. Think of time value like an ice cube, melting away slowly at first and then more rapidly. Since all options have a fixed time when they expire, duration is a significant consideration. A trader could be right about the direction and magnitude of the underlying move, but perhaps that doesn't materialize sufficiently during the option's lifetime. So enough time value has to be purchased for the move to happen. And more time value, of course, costs more money. Implied Volatility (IV) There's also the effect of volatility. The time value portion of an option is priced according to the underlying's anticipated (Implied) volatility. If an option is bought when volatility is low, and there is an increase in volatility, that makes the remaining time value portion of the option price more valuable. That can work in the option buyer's favor. But there's also the opposite situation; when an option is purchased when volatility is high, and there is a contraction in volatility. It's important to be able to gauge if option premium is underpriced, overpriced, or "average" priced. Technical tools to do that include charting implied volatility itself and some version of IV Rank where current IV is evaluated as a percentile of the range of IV over some time period, typically one year. So the inherent disadvantages of a long option are the necessity to be correct about direction, magnitude, duration, and possibly implied volatility. These considerations can make the probability of profit with a long option relatively low, often far below 50%. So why buy an option? Simple – unlimited profit potential! Long options can generate outsized profits when the trader is right about direction, magnitude, and duration. When does it make sense to use a long option? When a significant move in a stock is expected. When there’s a trend. When there’s a reversal in a range. When there’s a breakout (up or down). Solid technical analysis and a keen sense of the specific market are key success factors. SELLING OPTIONS For every buyer of an option, there is a seller (counterparty). Option sellers take on an obligation to either buy or sell and stock in return for collecting a premium.  There are a couple of disadvantages to selling options. The premium collected is the maximum profit possible. Selling an option also comes with a possibly substantial obligation to buy or provide stock. There are ways to reduce and manage that obligation risk, such as structuring trades as either vertical or calendar spreads, and these and others will be the subject of many future posts. So why sell an option? Probability of profit! Depending on how an option selling trade is structured, it’s possible to have a very high probability of success, sometimes 80% or more. It can be quite a bit easier to generate consistent, albeit smaller, profits with selling options. So, in summary, buying options come with an inherently low probability of an unlimited profit. Selling options come with a relatively high probability of a modest profit.  What do I do? Both. But I tend to be an option seller much more often than an option buyer. That better suits my personal style in trying to generate consistent profits for income. Other traders and investors with different objectives may find a different approach works best for them. 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 check it out, click here: TheTechnicalTraders.com. Enjoy your day! Chris VermeulenFounder & Chief Market StrategistTheTechnicalTraders.com
US Fed Actions 1999 to Present – What's Next?  - Part II - 15.12.2021

US Fed Actions 1999 to Present – What's Next? - Part II - 15.12.2021

Chris Vermeulen Chris Vermeulen 16.12.2021 08:53
Part II Let's continue to explore the past 20 years of US Fed actions. I believe the US Fed has created a global expansion of both economies and debts/liabilities that may become somewhat painful for foreign nations – and possibly the US. Reading The Data & What To Expect in 2022 And Beyond In the first part of this research article, I highlighted the past 25 years of US Fed actions related to the DOT COM bubble, the 9/11 terrorist attack, the 2008-09 US Housing/Credit crisis, and the recent COVID-19 virus event. Each time, the US Federal reserve had attempted to raise interest rates before these crisis events – only to be forced to lower interest rates as the US economy contracted with each unique disruption. The US Fed was taking what it believed were necessary steps to protect the US economy and support the global economy into a recovery period. Sign up for my free trading newsletter so you don’t miss the next opportunity! The following few charts highlight the results of the US Fed's actions to keep interest rates extremely low for most of the past 20 years. I want to highlight what I believe is an excessive credit/debt growth process that has taken place throughout most of the developing world (China, Asia, Africa, Europe, South America, and other nations). At the same time, the US has struggled to regain a functioning growth-based economy absent of US Federal Reserve ZERO interest policies and stimulus. Extreme Growth Of World Debt (excluding the US) This Rest Of The World; Debt Securities & Loans; Liabilities chart highlights the extreme, almost parabolic, growth in debt and liabilities that have accumulated since 2005-06. If you look closely at this chart, the real increase in debt and leverage related to global growth started to trend higher in 2004-05. During this time, the US housing market was on fire, which likely pushed foreign investors and foreign housing markets to take advantage of this growing trend in US and foreign real estate. This rally in speculative investments, infrastructure, and personal/corporate debt created a huge liability issue throughout many developing nations. Personal and Corporate debt levels are at their highest levels in decades. A recent Reuters article suggests global debt levels have risen in tandem with real estate price levels and is closing in on $300 Trillion in total debt. (Source: fred.stlouisfed.org) GDP Implicit Price Deflator Rallies To Levels Not Seen Since 1982~83 The rally in the US markets and the incredible rise of inflation over the past 24 months have moved the consumer price levels higher faster than anything we've seen over the past 50+ years. We've only seen price levels rise at this pace in the 1970s and the early 1980s. These periods reflected a stagflation-like economic period, shortly after the US Fed ended the Gold Standard. This was also a time when the US Federal Reserve moved the Fed Funds Rate up into the 12% to 16% range to combat inflationary trends. If the GDP Implicit Price Deflator moves above 5.5% over the next few months, the US Fed may be forced to take stronger action to combat these pricing issues and inflationary trends. They have to be cautious not to burst the growth phase of the markets in the process – which could lead to a very large deflationary/deleveraging price trend. (Source: fred.stlouisfed.org) We need to focus on how the markets are reacting to these extreme debt/liability trends and extreme price trends. The markets have a natural way of addressing imbalances in supply/demand/pricing functions. The COVID-19 virus event certainly amplified many of these issues throughout the globe by disrupting labor, supply, shipping, and manufacturing for a little more than 12+ months. The future decisions of the US Federal Reserve will either lead to a much more orderly deleveraging/devaluation process for the US and global markets – supporting the natural economic functions that help to process and remove these excesses. Or, the US Federal Reserve will push interest rates too high, too fast, and topple the fragile balance that is struggling to process the excesses throughout the global markets. What does this mean? I believe this data, and all the charts I've shared with you in this research article, suggest the US Fed is trapped in a very strenuous position right now. I'll share more information with you regarding my predictions for December 2021 and 2022 in the third part of this article. I will also share my proprietary Fed Rate Modeling System's results in Part III of this article and tell you what I expect from the US Federal Reserve and US stock markets. WANT TO LEARN MORE ABOUT HOW I TRADE AND INVEST IN THE MARKETS? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels. 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. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP – Total ETF Portfolio. Have a great day! Chris VermeulenChief Market Strategist
Awaiting US CPI And Speaking Of Disney and Uber. SEK And PLN As Central Banks Moves

US Fed Actions 1999 to Present – What's Next?

Chris Vermeulen Chris Vermeulen 15.12.2021 09:48
I find it interesting that so much speculation related to the US Federal Reserve drives investor concern and trends. In my opinion, the US Federal Reserve has been much more accommodating for the global economy after the 2008-09 US Housing Market crash. The new US Bank Stress Tests and Capital Requirements have allowed the US to move away from risk factors that may currently plague the global markets. What do I mean by this statement? US Fed Continues To Maintain Extremely Accommodative Monetary Policy Over the past 12+ years, after the 2008-09 US Housing Market collapse, the US Federal Reserve has acted to support the US and global economy while the US Congress and US Federal Reserve have acted to build a stronger foundation for US banking and financial institutions. The most important aspect of this is the Capital Requirements that require an operating US bank to hold a minimum amount of reserve capital (Source: Federal Reserve). The US Federal Reserve installed this program to prevent US banks from over-leveraging their liabilities based on the 2008-09 Housing Market Crisis lessons. Sign up for my free trading newsletter so you don’t miss the next opportunity! There are still risks associated with a complete global economic collapse – where consumers, banking institutions, and economic activity grinds to a halt because of some external or unknown factor. Yet, the risks of a US-based collapse based on excessive Banking or other financial institution liabilities are somewhat limited in today's US Economy. Although, globally, the risks have accelerated over the past 12+ years while the US Federal Reserve maintained a very accommodative monetary policy. Historical US Federal Reserve Actions Let's review some of the most significant US Federal Reserve actions over the past 25 years. Early/Mid-1990s: The Fed raised the FFR from 3.0% to 6.5% to 7.0% as the DOT COM Rally continued to build strength. 1998/1999: The Fed dropped the FFR to 4.0% as the DOT COM bubble became frothy and started to fracture/burst. Early 2000: The Fed raised the FFR from 4.0% to 6.86% over just five months, pushing the cost of borrowing above 7.5%~8.5% in the open market. Late 2000/Early 2001: The September 2001 Terrorist Attack on the US pushed the Fed to lower the FFR to 1.0% by December 2002. Before the 9/11 attack, the Fed lowered the FFR after the DOT COM bubble burst rattled the US economy and output. 2004/2006: The Fed raised the FFR from 1.0% to 5.5% (more than 550%) while the US Housing Market boom cycle pushed the US economy into overdrive. This was the biggest FFR rate increase since the 1958-1960 rate increase (from 0.25% to 4.0% - more than 1600%) or the 1961-1969 rate increase (from 0.50% to 9.75% - more than 1950%). 2007/2008: The Fed decreased the FFR from 5.5% to 0.05 (Dec 2009), effectively setting up a 0% interest rate while the US attempted to recover from the 2008-09 Housing Market Crisis. 2015/2020: the Fed attempted to raise the FFR from 0.08% to 2.40% as the US economy transitioned into a strong bullish breakout trend. When the US markets collapsed in early 2020 because of the COVID-19 virus, the Fed moved interest rates back to near 0% and have kept them there ever since. The deep FFR discounts/rates that started after the 1999/2000 DOT COM/9-11 events pushed foreign markets to borrow cheap US Dollars as a disconnect of capital costs and a growing foreign market economy allowed certain economic functions to continue. Borrowing cheap US Dollars while deploying that capital in foreign economies returning 4x to 10x profits allowed many foreign companies, individuals, and governments to build extremely dangerous debt levels – very quickly. (Source: ST Louis FED) Now, let's get down to the core differences between pre-1990 and post-1990 US Fed actions and global economy functions. US Fed Added Rocket Fuel To An Already Accelerating Global Economy Before 1985, foreign markets were struggling to gain their footing in the global economy. Larger global economies, like the US, Japan, Europe, and Canada, could outsource manufacturing, supplies, and labor into foreign nations that provided a strategic cost advantage. After 1994 or so, after the Asian Currency Crisis settled, the growth of manufacturing and labor in China/Asia started booming at an exponential rate. This prompted a 2x to 5x growth factor in many Asian nations over 10+ years. The 9-11 terrorist attacks briefly disrupted this trend, but it restarted quickly after 1994~1995. This high-speed growth phase in China/Asia after 1999 created a massive demand for credit and expansion as Asian consumers and economies grew at exponential rates from 1997 to now. The US Fed inadvertently promoted a global growth phase that resulted in the fastest global economic increase in history. Multiple foreign nations were able to take advantage of cheap US Dollars. At the same time, the US Fed acted to support the recovery of the US economy after 9-11 and the 2008-09 Housing/Credit crisis. Those cheap US Dollars continued after the COVID-19 turmoil in early 2020 and likely pushed already at-risk debtors over the edge as bond rates have started to price extensive risk factors. The result of these crisis events and the US Federal Reserve's continued easy monetary policy has been the fastest growth of assets the planet has seen in over 80 years. Not only have global economies grown in a parabolic phase, but the US stock market has also moved higher and higher after the 2010 bottom and the 2015-2016 shift towards higher US corporation earnings/revenues. Once the COVID-19 virus event hit in early 2020, the US Fed moved rates back to near 0% - supplying a nearly unlimited amount of rocket fuel for the global markets (again). The problem this time was the global COVID shutdowns essentially took the spark away from the fuel (capital). Now, we are waiting for the US Fed statements to close out 2021. I'll offer this simple hint to help you prepare for what's next – more volatility, more big trends, and more deleveraging throughout the global markets. In Part II of this research article, I'll share my thoughts on what I expect from the US Fed and what I hope for in 2022 and beyond. Want to learn more about how I trade and invest in the markets? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels. 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. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP - Total ETF Portfolio. Have a great day! Chris VermeulenChief Market Strategist
Financial Sector May Rally 11% - 15% Higher Before End Of January 2022

Financial Sector May Rally 11% - 15% Higher Before End Of January 2022

Chris Vermeulen Chris Vermeulen 11.12.2021 10:25
The financial sector is poised for a very strong rally into the end of 2021, and early 2022 as revenues and earnings for Q4:2021 should continue to drive an upward price trend. The US Federal Reserve is keeping interest rates low. At the same time, the US consumer continues to drive home purchases and holiday shopping. Strong economic data should drive Q4 results for the financial sector close to levels we saw in Q3:2021. If that happens, we may see a robust rally in the US Financial sector over the next 45 to 60+ days. The strength of the recent rally in the US major indexes shows just how powerful the bullish trend bias is right now. Some traders focus on the downside risks associated with the US Federal Reserve actions and/or the concerns related to inflation and global markets. I, however, continue to focus on the strength in the US major indexes and various sector trends that show real opportunities for profits. Comparing Sector Strength The following two US market sector charts highlight the performance over the last 12 vs. 24 months. I want readers to pay attention to how flat the Financial Sector has stayed since just before the 2020 COVID event and how the Financial Sector has started to trend higher over the past 12 months. This is because the shock of COVID briefly disrupted consumer activity. Yet, consumers are coming back strong, driving retail sales, home sales, and the continued strong US economic data. Therefore, it makes sense that the Financial sector should continue to show firm revenue and earnings growth while the US consumer is active and spending. Sign up for my free trading newsletter so you don’t miss the next opportunity! Over the past two years, Discretionary, Technology, and Materials drove market growth compared to other sectors. Remember, the initial COVID virus event disrupted market sector trends over the last 24+ months. (Source: StockChart.com) Taking a look at this 1 Year US Market Sector chart shows how various sectors have rebounded and how the Discretionary and Materials sectors have flattened/weakened. Pay attention to how the Energy and Real Estate sectors have been over the past 12 months. Also, pay attention to how the Financial sector is strengthening. I believe that the continued deflation/deleveraging that is taking place throughout most of the world will continue to drive global central banks to stay relatively neutral regarding rising interest rates. This will likely prompt an easy money policy throughout most of 2022 and drive continued revenues/earnings for sectors associated with consumers' engagement with the economy. If inflation weakens into 2022 while wage and jobs data stays strong, we may see more moderate strength in the Financial, Healthcare, Discretionary, and Technology sectors over the next 6 to 12+ months. Read more about Global Deleveraging Here: Delivering Covid Bubble Possible Volatility Risks In Foreign Markets (Source: StockChart.com) Financials May Pop 11% Or More Over The Next 6+ Months This Weekly IYG, IShares US Financial Service ETF, highlights the recent sideways price trend in the Financial sector and the potential for a 9% to 13% rally that may take place as the markets shift into focus for the Q4:2021 earnings. Yes, inflation is still a concern, but as long as the US consumer continues spending and engaging in the economy, the Financial Services and US Banks should show strong returns. If the US markets rally into the end of 2021, possibly reaching new all-time highs again, this trend may carry well into 2022 and drive Q4:2021 and Q1:2022 revenues and earnings for the Financial sector even higher. This Weekly XLF chart shows a very similar setup to IYG. I firmly believe the recent fear in the markets related to the US Federal Reserve, the new COVID variants, and the global markets deleveraging process is missing one critical component – the strength of the US markets and the strength of the US Dollar. As the rest of the world struggles to find support and economic strength, the US markets continue to rebound on the strength of the US consumer, the recovering economy, and the growth of these sectors. As long as the US Federal Reserve does not disrupt this trend, I believe Q1:2022 could be much more robust than many people consider. I also think the deflation/deleveraging process will work to take the pressures away from recent inflation trends. What could this mean for 2022? Early 2022 may well work as a "rebalancing" process for the global markets – possibly taking the pressures away from the strength in energy, commodities, and staple products/materials. This means pricing pressures will decrease while consumers are still earning and spending. The Financial sector should benefit from these trends over the next 6+ months. Watch for the Financials to start to increase throughout the end of 2021 and into early 2022. There are many ways to consider trading this move, but ideally, I think the rally will take place before the end of February 2022. Q1 is usually relatively strong, so that this trend may last well into April/May 2022. It all depends on what happens that could disrupt the current market sector trends. If nothing happens to disrupt the strength of the US Dollar and the strength of the US markets, then I believe the Financial Sector has a very strong opportunity for at least 10% to 11% growth. Want to learn more about the potential for a financial sector rally? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels. 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. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP - Total ETF Portfolio. Have a great day! Chris VermeulenChief Market Strategist
Major Indexes Consolidate Into Sideways/Flagging Pattern – Watch For Aggressive Trending Soon

Major Indexes Consolidate Into Sideways/Flagging Pattern – Watch For Aggressive Trending Soon

Chris Vermeulen Chris Vermeulen 01.06.2021 16:14
Over the past few weeks, the US major indexes have consolidated into a sideways price channel.  This is most obvious on the NASDAQ and SPY charts as we've seen moderately deep pullbacks through the months of April/May 2021.  My research suggests this sideways price Flagging might be concerning for active traders/investors. When the market flags into a sideways price pattern and near an Apex level, price tends to act in a very aggressive manner while attempting to establish a new trend. The longer price continues to trade within that sideways/flagging price range, the more aggressive and violent the new trend may be when it finally breaks free of the sideways price channel.After Many Weeks Of Sideways Price Trending – What's Next?The Weekly SPY chart, below, highlights the seven weeks of moderate sideways price activity and shows the extended resistance level (MAGENTA Line) which represents an almost extreme rally trend originating from the 2009~2011 initial price bottom/rally after the housing/credit crisis. My research team and I are cautious of how the SPY has rallied recently, targeting the prior MAGENTA Line trend level and then dramatically stalled after briefly touching this level.Long Term SPY Chart Highlights Incredible Price - “Fuzzy Double Top” From 2009 Bottom LevelsThe following Monthly SPY chart shows you the bigger picture.  As the bottom setup in 2009-2010, price rallied sharply and set up an upward sloping price channel off these highs. Usually, as prices move away from the bottom, a sharp recovery may take place initially after the bottom completes.  This initial upward price trend often represents some of the strongest upward price momentum one will see as the bullish trend continues to unfold.  It is very unusual for price to rally very strongly after a deep price bottom, then move into weaker bullish trending, then begin to accelerate into a very aggressive upward price trend targeting or reaching the initial bullish momentum after the initial deep bottom level. Sign up for my free trading newsletter so you don’t miss the next opportunity!This is exactly what happened in this case with the SPY.  Price rallied off the bottom, began to stall in a bullish trend while still moving higher, then after COVID-19 began to rally excessively back to the original MAGENTA upward sloping price channel.  This type of price activity is very unusual and typically relates to a hyper-parabolic price trend.Transportation Index Forming Tight Price Flag – Which Way Will It Break?This Weekly Transportation Index highlights the Flagging price formation that has recently set up.  Although one could argue the current trend is still very bullish overall, the recent sideways price formation suggests the momentum behind the recent bullish price trend has weakened.  We have drawn both bullish and bearish arrows on this chart to illustrate that the Apex of the Flag formation may prompt some type of wild, volatile price activity.  This Apex has nearly completed as of last week.  It is very likely that a more volatile price trend will begin over the next few weeks and we believe this could be the beginning of a bigger price trend lasting through August or September 2021.If the trend resumes as a bullish price trend, then we may continue to see a melt-up in price targeting the $16,500 level (or higher).  If the trend breaks lower, then we believe the Transportation Index may attempt to move below the $14,000 level and possibly attempt to retest the early 2021 lows near $12,000.Custom Volatility Index Confirms Bigger, Aggressive Price Trends/Breakouts Are PendingLastly, we want to highlight our Custom Volatility Index Weekly chart – which we use to measure and gauge market peaking and bottoming setups as well as overall trend direction and momentum.  When the Custom Volatility Index moves above 12~13, it is nearing an extreme bullish trend phase (or potentially nearing a peak price level where bullish momentum may stall).  When the Custom Volatility Index moves below the 9~10 level after reaching the 12~13+ level, we are experiencing a moderate price pullback (usually).  When the Custom Volatility Index falls below the 9~10 level, this suggests the markets are breaking major support channels and falling into a new type of Bearish trending (possibly attempting to target the 3~5 level – or lower).Currently, the Custom Volatility Index has reached levels above 14 on April 12, 2021.  That is the origination of this recent stalling in the Weekly SPY chart (near the top of this article).  The current sideways price action in the SPY after April 12 was illustrated in the Custom Volatility Index as the large candlestick bars rotating near the 10~11 level.  This period represents a fairly large range price volatility period where prices have stalled.Now, the Custom Volatility Index is back above 13.50 and reached a high of 14.33.  This move higher suggests the markets are back into bullish exhaustion/peaking range while the SPY and Transportation Index are still suggesting a sideways price Flag formation is Apexing.  We expect some very volatile price action to pick up throughout most of June 2021 which may prompt a new major price trend in the US Major Indexes because of this setup.As various assets seek out critical support and resistance levels in early June 2021, pay attention to how markets react near past critical stand-out lows and highs.  For example, The Transportation Index chart, above, highlights a “stand-out” low near $12,000 that is a likely downside price target if we see a breakdown trend in early June.  These past stand-out price levels often represent very important support and resistance levels for technical traders.Again, we are not making a prediction that a breakdown event is going to crash the markets right now.  We are suggesting that a price volatility event is about to happen in early June based on our research.  This volatility event may prompt a new major price trend if the event is big enough to break through historic support/resistance levels.  If not, then we may see a moderate 8 to 11% price rotation take place before the markets resume the bullish trending phase again.We are suggesting that traders prepare for this volatility event which appears to likely happen in early June 2021 and may last many weeks (through August or September 2021).  Only time will tell how this plays out, but we are fairly certain a spike in the VIX is near and that we may see a moderate downside move in the SPY – possibly below $400.  Many various sectors will likely rotate as well and set up excellent opportunities for active traders throughout this volatility event.For those of you who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily pre-market reports, proprietary research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers. Sign up today!Enjoy the rest of your Memorial Day Weekend!
You Should Never Trade Options If You Don’t Know This..

You Should Never Trade Options If You Don’t Know This..

Chris Vermeulen Chris Vermeulen 27.05.2021 12:50
Have you ever heard someone say “90% of people that trade options lose money.”? I certainly have. Looking at an options chain can be a dizzying exercise for the uninformed. Delta, Gamma, Theta, Rho, Vega - and let's not forget - implied volatility? Single, spread, butterfly, condor. What does it all mean? So what is an option from a high level view? At the end of the day, an options contract is just a derivative like any other stock, bond, ETF, or other tradable security based on an underlying asset. Most people will look at these other forms of derivatives and have an understanding of why the price fluctuates. For example, if a company posts a strong earnings report and the price of the stock goes up, it is easy to understand what is going on. In the case of options contracts, however, things do get a bit more complicated. Let’s break things down a little bit to start to get an idea of why many investors are afraid to trade options. Simple and Straight Forward Options BasicsThere are two forms of options contracts, Puts and Calls, and two things you can do with each type. For each of these, I can either buy or sell them. Buying a call option gives me the right to buy the underlying security at an agreed price or “strike” price. Selling a call option gives me the obligation to sell the underlying security at the strike price. On the other hand, buying a put option gives me the right to sell a stock at the strike price, while selling a put option obligates me to buy a stock at the strike price. Here is a diagram:Seems simple enough right? In fact, if you think about it, it might seem similar to your car insurance. You give your insurance company premiums every month, and they are obligated to cover you in the event of damage to your car. So in many ways, you are correct, it is like insurance. The price of an option is even called the “premium!” As you can imagine, the price of the premium would have a big impact on whether or not you decided to trade it. Taking insurance as an example, why would you want to pay $500 dollars per month to your insurance company if they only cover you up to $1000 in damage? Many beginners don’t understand what is really being exchanged in the options market and how the prices are calculated. How are options premiums calculated? This is where things get much more complicated and one of the most overlooked factors in options pricing is the current market volatility.The Price of an Option ExplainedIn simple terms, options prices are generally broken out into two different components: intrinsic and time value. These two values combined make up the option premium. The intrinsic value of a call option is calculated as the difference in the current price of the underlying security and the strike price of the option.Sign up for my free trading newsletter so you don’t miss the next opportunity!For example, if I buy a call option with a strike price of 100 when the underlying is 100, the difference between the two numbers is 0, thus the call option has no intrinsic value. If the price of the underlying goes up to 105 dollars, my call option now has 5 dollars of intrinsic value. Put options are reversed - their intrinsic value is the difference between the price of the put option minus the price of the underlying security. Time value is calculated by taking the price of the option and subtracting the intrinsic value. This will tell you how much the option writer is compensated for taking on the obligation to buy or sell the underlying for the pre-determined amount of time. The price of an option is typically calculated using a few industry standard models. These models use historical data and many variables to calculate the price of an option including the current stock price, the strike price of the option, the risk-free rate and the option expiration. All of these variables are plugged into the mathematical models such as the Black-Scholes and ultimately a price is calculated.  This is typically where people get bogged down by the complexity. Each of these variables can make a big difference in the price of an option, and when looking at an options chain, most people simply don’t have the knowledge to make an educated decision about what sort of trade they should make. In reality, options can be used in so many different ways. They can be used to hedge, speculate, or make a profit all on their own. Having a basic understanding of the options market can help you enhance your existing positions and allow you to reduce your risk. Or you can trade options as their own individual positions which is what we teach and provide at Options Trading Signals. Once you have a complete understanding of options, the possibilities are endless. If you are just starting out on trading options and want to learn more about the different strategies, follow me on https://www.thetechnicaltraders.com/ots/ and look out for more articles where we’ll take you step by step through real live options trades with members.
Stock Market Cycles Tipping The Balance From Euphoria To Complacency - Is Gold Setting Up For A Rally Above $2000 Again?

Stock Market Cycles Tipping The Balance From Euphoria To Complacency - Is Gold Setting Up For A Rally Above $2000 Again?

Chris Vermeulen Chris Vermeulen 27.05.2021 01:28
Gold has set up a very strong confluence pattern across multiple foreign currencies recently.  This upside confluence pattern suggests that Gold has now moved into a much stronger bullish price phase compared to various currency pairs.  This upside move in precious metals aligns very well with my broad market cycle phase research. I urge traders/investors to start paying attention as we transition into this new longer-term cycle phase.Recently, my team and I published a series of articles related to these longer-term cycle phases and how they related to the current market trends.  The biggest concept we want to highlight is that we've transitioned away from an Appreciation cycle phase and into the early stages of a Depreciation cycle phase.  Often, near this type of transition, the global markets experience a unique type of Excess Phase Peak.  This type of price pattern happens because traders/investors are slower to identify the end of a trend and often attempt to continue the Thrill/Euphoric phase of the previous market trend – until the markets prove them wrong.You can review some of our most recent research posts about these topics here: US Dollar Breaks Below 90 - Continue To Confirm Depreciation Cycle Phase (May 23, 2021); Bitcoin Completes Phase #3 Of Excess Phase Top Pattern - What Next? (May 20, 2021) and; What To Expect - A Critical Breakout Warning For Gold, Silver & Miners Explained (May 18, 2021).Stock Market CyclesThe custom graphic shown below highlights the phases of typical market trends through various stages of market trends.  My team and I believe we have crossed the peak level (or are very near to that crossover point) and have begun to move into the Complacency and Anxiety phases of the market trend.  As suggested, above,  the psychological process for traders/investors at this stage is to hope and plan for the never-ending bullish price trend while the reality of the market trend suggests a transition has already started taking place and the market phase has shifted.Our research suggests the last Appreciation phase in the market took place from mid/late 2010 to mid/late 2019.  That means we started a transition into a Depreciation cycle phase very near to the beginning of 2020.  Our belief that a moderate price rotation is pending within the markets stems from the excess phase rally that took place after the COVID-19 virus event.  We've witnessed the sideways price trend in precious metals over the past 8+ months which suggested that global traders were confident an economic recovery would take place (eventually).  Yet, the question before everyone is, as we move away from an Appreciation cycle phase and into a Depreciation cycle phase, what will that recovery look like?  Can we expect the recovery to be similar to levels seen in the previous Appreciation cycle phase?  Let's take a look at how these phases translated into trends in the past.Appreciation and Depreciation Cycle PhasesThe first Depreciation cycle phase (1983~1992) took place after an extended deflationary period where the debt to GDP was rather low comparatively. It also took place within a decade or so after the US moved away from the Gold Standard.  The strength in trending we saw in the US stock market was directly related to the decreasing interest rates and strong focus on credit/equities growth throughout that phase.The second Depreciation cycle phase (2001~2010) took place after the DOT COM rally prompted a huge boom cycle in equities and as a series of US/global events rocked the US economy.  First, the September 11, 2001 attack in New York, and second, by the engagement in the Iraq War.  Additionally, the US Fed was actively supporting the US economy after the 9/11 terrorist attacks, which prompted many American's to focus on supporting a stronger US economy.  This, in turn, prompted a huge rally in the housing market as banks and policies supported a large speculative rally (FOMO) in Real Estate.The current Depreciation cycle phase (2019~2027+) comes at a time where the US Fed has been actively supporting the US/global economy for more than 11 years and after an incredible rally in Real Estate and the US stock market.  Additionally, a new technology, Crypto currencies, has taken off throughout the world as an alternate, decentralized, asset class – somewhat similar to how the DOT COM rally took off. As we've seen this incredible rally in global equities, Cryptos, commodities and other assets over the past 7+ years, we believe the last Appreciation cycle phase is transitioning into an Excess Phase Peak (see the Euphoria/Complacency phases above), which may lead to some incredibly volatile price trends in the future.Sign up for my free trading newsletter so you don’t miss the next opportunity!You may be asking yourself, “how does this translate into precious metals cycles/trends?” after we've gone through such a longer-term past cycle phase review...The recent upside price trends in precious metals are indicative of two things; fear and demand.  First, the economic recovery and new technology are increasing demand for certain precious metals and rare earth elements (such as battery and other technology).  Second, the move in Gold and Silver recently is related to credit, debt, economic and cycle phase concerns.  As we've seen Bitcoin move dramatically lower and as we start to move into a sideways price trend in the US stock market, there is very real concern that the past price rally has reached an intermediate Excess Phase Peak.Please take a moment to learn about our BAN Trader Pro strategy and how it can help you identify stock market cycles, which phase we are in, and how that will lead us to trade better sector setups.  Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades.  You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.Have a great day!!
Can You Guess What The Number One Most Overlooked Factor In Options Pricing That Most Traders Ignore Is?

Can You Guess What The Number One Most Overlooked Factor In Options Pricing That Most Traders Ignore Is?

Chris Vermeulen Chris Vermeulen 24.05.2021 03:14
Over the past year, the world we live in has drastically changed.  In the covid era, we have lived in the midst of a pandemic requiring limited personal interactions with people outside our households and seemingly endless precautions in an effort to slow the spread.  In short, the world we live in today is radically different than the way things were less than two years ago.  Since we have all be locked away in our homes, working remotely or not working at all, we have had to take on learning new skills.  One skill everyone has been flocking to is trading. Sign up for my free trading newsletter so you don’t miss the next opportunity!According to a recent Charles Swab survey, fifteen percent of current retail investors began investing in 2020.  This is a big number.  Many of those investors cling to stock options as a way to leverage small money and trade big.  With all the new traders trading, the markets have changed along with everything else.  Many refer to these new traders as the “dumb” money while the historical institutional investors as the “smart” money. Many of these new traders trade options before having any idea of how the price of an option is really constructed.  They believe they can buy the option and only time and the price of the underlying stock matters in the price movement of the option.  This is not the case.  So, what are they missing?The number one most overlooked factor in options pricing that most traders ignore is………drum roll……..Volatility!  Yes, that’s right I said volatility.  Volatility arguably could be the most important factor in option pricing.  But before I explain, we must first understand what is meant by Volatility in options pricing.  With volatility, you have two types - historical volatility and implied volatility.  Historical volatility is what price volatility was historically, while implied is what the future volatility is expected to be.  To sum in simple terms: The higher the volatility of the underlying asset, the higher the price is for both call and put options. This happens because higher volatility increases the price range of the underlying asset. The most overlooked factor that most traders ignore...VolatilitySo back to the most overlooked factor that most traders ignore - why volatility?  In options trading, volatility will move up and down as the price of the underlying asset range increases.  This can make a trade, where you have direction and time right, a losing trade and make a trade, where you miss the direction and time, yet still make a profit.  That is the power of volatility that most traders, especially new ones, overlook.  In many cases this can lead to catastrophic losses in trading options.  In many cases, the script goes like this:The euphoria of trading options sets in as new traders just walk up and trade options.They will start with one lot and go small and may get a few wins.They then start to increase their size as they have been winning.Then the market teaches them a lesson and they lose (because their size was larger overall, they are at a net loss).So, if one trades options, why should they care about volatility?  One should care because arguably, this can affect options pricing the most and can turn winning trades into losing ones. If you are one of these new options traders and would like to learn more about how to trade options and take all factors of options pricing into consideration, learn how to account for volatility in your options trading at Options Trading Signals.  We send trade alerts out weekly and do daily updates on our positions as to why we got in and out along with the factors to our strategies.  We trade proprietary strategies you will not find anywhere else.  Our goal is to make the market work for us and not try to work the market like everyone else.  You owe it to yourself to have the best tools and subject matter experts on had to ensure you are set up for ultimate success.  Don’t trade with one hand behind your back. Rather, expedite your learning curve with the Options Trading newsletter service.Have a wonderful weekend!
Stock Market Attempts To Break Support Channel – What's Next?

Stock Market Attempts To Break Support Channel – What's Next?

Chris Vermeulen Chris Vermeulen 19.05.2021 22:12
The recent price volatility related to the surprise Jobs number, nearly ten days ago, and the potential for inflationary price trends extended beyond the Fed expectations has created a unique type of sideways price rotation on the INDU chart.  This recent price volatility suggests the markets are struggling to identify future trend bias as well as attempting to shake out certain traders and investors (running stops).Additionally, the downside price trend we've recently seen in Lumber, breaking away from the continued rally mode, and Bitcoin, breaking downward nearly -54% from recent highs, suggests a broad market “washout” is taking place.  How far will this trend continue?  Will the US stock market break downward like Bitcoin has recently done?  Let's take a look at the charts and try to answer some of these questions.Before we continue exploring charts, I suggest readers review some of my recent research posts relating to this potential downward price trend in the US/Global markets, including: Are We Days Away From Potential Gann/Fibonacci Price Peak? (March 17, 2021); Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues (April 25, 2021); and Are Apple, Tesla, and Bitcoin Entering a Technical ‘Excess Phase Top’? Should You Be In Cash Right Now? Part II (May 15, 2021).Expect Continued Price Volatility As Markets Attempt To Establish New TrendsWe'll start by exploring the Dow Jones Industrial Average Daily chart, below, and the first thing we want to highlight is the extended upward (YELLOW) price trend channel.  This upward sloping price channel has been in force since the March 2020 COVID-19 lows.  It was confirmed by the November 2020 lows and retested in March 2021.  Typically, when price channels this strongly over an extended period of time, the price channel becomes a psychological barrier/wall for price trending.  When it is breached or broken, price trends often react moderately aggressively – with excessive volatility.Over the past 10+ days, near the right edge of this chart, we can see that price has started to react with much higher volatility and broad sideways price trends.  It appears the INDU chart has entered a new phase of market price activity – moving away from moderately low volatility bullish trending and into much higher volatility sideways rotation.  We attribute this to a shift in how traders and investors perceive the future actions of the US Fed and how risks are suddenly much more prominent than they were 3+ weeks ago.  It appears the “rally euphoria” has ended and traders are starting to adjust expectations related to a slower economic reflation of the global economy.Depending on how traders and investors perceive the future growth opportunities in the US and global markets, as well as how new strains of the COVID-19 virus may continue to disrupt global economies, we may see a fairly big change in trend throughout the rest of 2021 and possibly into 2020.  In our opinion, the tremendous rally phase that took place between October 2020 and now has been anchored on the perception that the COVID vaccines would allow for an almost immediate and nearly full economic recovery attempt.  Now, after we are seeing various new strains of COVID ravage India, Europe, Africa and parts of South-East Asia, expectations may be changing quickly.Everything Hinges On How Price Reacts Near The YELLOW Support Channel LineThis Weekly Dow Jones Industrial Average chart highlights the same upward sloping price trend from the March 2020 COVID-19 lows.  It also shows the start of the broad market rotation over the past three weeks and highlights three key “standout lows” that we interpret as critical support levels.  These support levels are at $32,090, 30,575, and $29,875.Sign up for my free trading newsletter so you don’t miss the next opportunity!If we continue to see downward price trending which breaks through the YELLOW upward sloping price channel line, it is very likely that price will continue to move lower while attempting to find new support near these standout low price levels.  This suggests any breakdown in the INDU may prompt a further -5% to -11% downside price move.If the recent price rotation stalls and continues to find support above the YELLOW upward sloping price channel line, then we expect the US markets to transition into a sideways bottoming formation which will prompt another rally attempt in the near future. Everything hinges on what happens over the next few weeks related to this key YELLOW upward sloping price channel.What this means for traders and Investors is that certain market sectors are still posed for strength and growth over the next 6 to 12 months.  The recent downside price volatility suggests broad market concerns related to a continued reflation trade are certainly evident in how the markets are trending.  Yet, within this potential sideways rotation, there are sectors and trends that still present very real opportunities for profits. If the major US indexes find support above the YELLOW price channel line and attempt to mount another rally, traders need to be prepared for this potential opportunity in the markets – attempting to target the best and strongest market sectors.As I just mentioned, everything hinges on what happens over the next few days and weeks related to the YELLOW price support channel.  One way or another, the markets are either going to attempt to rally higher while this support channel holds or a bigger breakdown event may take place as price breaks below the support channel and attempts to find new, lower, support.Learn why we moved our BAN clients into CASH over a week ago and learn how we use the BAN trading strategy to manage risks and take advantage of the strongest market sectors. Please take a minute to learn about our BAN Trader Pro strategy and how it can help you identify and trade better sector setups.  Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades.  You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.Enjoy the rest of your day!!
Metals Preparation For A Big Upside Move (Part II)

Metals Preparation For A Big Upside Move (Part II)

Chris Vermeulen Chris Vermeulen 18.05.2021 05:23
In the first portion of this research article, I highlighted the correlation between Gold and the US Dollar as well as the correlation between the US Dollar and the EURUSD and JPYUSD.  The purpose of this example was to highlight the different phases of US Dollar appreciation vs depreciation compared to the EURUSD/JPYUSD.  The EURUSD and JPYUSD are often compared to the US Dollar as major global currencies.  Therefore, when the US Dollar moves into a depreciation phase, we expect to see the EURUSD and JPYUSD move into an appreciation phase.How this correlated to the price of Gold and the phases of advancing vs declining precious metals is simple to understand.  Gold will stall, or more broadly downward, while the US Dollar is within an advancing/appreciation phase.  Gold will move higher or begin an upward trend bias when the US Dollar begins to generally weaken or moves into a declining/depreciation phase.Understanding Cycle Phases & Correlative Gold Price Trend BiasIn the first portion of this research article, I highlighted this relationship by detailing the 2007-08 US Dollar depreciation phase that lasted until a major bottom setup in 2014 (almost exactly 7 years).  That next US Dollar appreciation phase lasted until a recent major peak in March 2020 (almost exactly 7 years).  If the US Dollar continues to decline in value after the COVID-19 virus event and the change in cycle phases, we can expect another 5 to 7+ years of advancing precious metals prices as a result.The recent bottoming in Gold, just above the $1700 price level, set up a very unique scenario related to potential future advances in price.  The current Gold rally from the 2015 lows, near $1045.40, to recent highs near $2089.20 represents almost a 100% price advance.  In my opinion, this rally in Gold is similar to the rally that took place between 2000 and 2005 – starting near the end of a US stock market appreciation phase and lasting about 3.5 years into a US stock market depreciation phase.  Our researchers believe the US stock market has completed a recent price appreciation phase in 2018~2019 and that we are only about 1~2 years into a new US stock market depreciation phase – which may last until 2027~2029.The Monthly Gold Futures chart, below, highlights these Appreciation/Depreciation phases and the advancing/declining price of Gold over the past 25+ years.  We want you to pay very close attention to how Gold started to rally in 2000 as the markets peaked because of the DOT COM rally.  This rally started in the midst of a US stock market appreciation phase – just like what happened in 2015.  Gold prices rallied from the 2000 lows to reach the initial +100% advance by early 2006 (in the midst of a housing market rally and in the midst of a Depreciation US stock market phase).  After that, Gold rallied another +265% reaching a peak price level $1923.70 in September 2011.Currently, Gold has rallied approximately 100% from the 2015 lows – similar to the 2000~2006 rally.  The current downside price move in Gold suggests the recent highs, near $2089.20 in August 2020, complete a Cup-n-Handle pattern.  Additionally, because we have just entered a US stock market Depreciation phase, we believe the price of Gold will continue to advance to levels highlighted in the chart above.  The first target level is $2600, then $3200, then $3790.Sign up for my free trading newsletter so you don’t miss the next opportunity!Our Currency Correlation Inverse Trend Index also aligns with the Appreciation/Depreciation cycle phases.  If the US Dollar continues to decline in value over the next 2 to 5+ years, attempting to consolidate below $84 as it has done in the past, then we believe the EURUSD/JPYUSD currency values may advance above the threshold (near 0.65) to prompt a stronger rally in precious metals over the next 4+ years.US Dollar & Currency Correlations Suggest Big Advance In Metals Is PendingThe primary driver of this move is the declining US Dollar – not the move higher in the EURUSD or JPYUSD.  These other currencies are simply barometers of the global perception of the strength of the US Dollar.  A weakening US Dollar will usually be prompt a moderate advance in Gold prices.  We believe the correlation between the US Dollar value (above or below the 85~86 level), as well as the correlation of the strength of the EURUSD and JPYUSD in comparison to the US Dollar, may prompt a change in how Gold reacts to moderate trend bias as well as how Gold reacts to changes in the US Dollar trends.  The bias trend of Gold within this extended market cycle phase tends to mitigate Gold price volatility as the US Dollar temporarily bottoms/bases and starts to rise.  This suggests a broader rally in Gold throughout this new market cycle phase may extend much higher than many people expect.The following Monthly Custom Metals Inverse Trend chart, below, highlights the bottoming/basing formation in the currency correlation compared to Gold.  You can see the moderately deep bottom that set up in Gold between the peak in 2011 and the bottom in 2015, as well as the recent rally in gold to the new highs.  The recent moderate selloff in Gold correlated to a very minor decline in the Inverse Currency Index – suggesting that a bigger rally is setting up as currencies rotate into the new cycle phase.Our Custom Metals Index Weekly chart, below, highlights the recent upward price rotation in the precious metals/miners sectors.  Pay very close attention to the RED price channels on this chart and the LIGHT BLUE arching GANN Fan resistance levels near the recent tops in price.  We believe any upside price advance above these current GANN arcs will prompt a rally that may push metals prices back into the RED price channels – advancing possibly +10% to +30% higher before the end of 2021.  This advance may prompt Gold to rally to levels near our $2600 price target before the end of 2021.  Silver may advance to levels above $39~$44, more than 30% to 40% from current price levels if Gold continues to advance as we expect.US Dollar Flirting With Massive Price Decline Once $89.00 Is BreachedOne key factor that is likely to drive this new advance in Gold and Silver – the US Dollar trends.  I am watching two critical support levels in the US Dollar right now; $89.70 and $89.20.  If the US Dollar falls below either of these support levels, Gold will likely advance higher as the currency depreciation cycle phase appears to be continuing to engage as we expect.  Remember, the key level for the US Dollar is that 85~86 level. The closer we get to those levels, the more conviction traders and investors will have regarding the advancing precious metals prices.  The 89 price level for the US Dollar is likely the breaking point for this cycle phase to really break loose so watch that level very closely.As the US stock market attempts to shrug off inflationary concerns and worries that the US Fed may be forced to raise rates to curb inflationary trends, Traders and Investors should start to pay attention to precious metals and the currency correlations related to these broader market cycle phases.  My research team and I have published a number of articles related to these Appreciation/Depreciation cycle phases and attempted to warn of potential market volatility events over the past 8+ months, including: How To Spot The End of an Excess Phase (November 27, 2020); Are We Days Away From Potential GANN/Fibonacci Price Peak? (March 17, 2021); Adapting Dynamic Learning Shows Possible Upside Price Rally In Gold & Silver (November 22, 2020).What is important to understand about this potential cycle phase shift and new precious metals trend bias is that it may take many weeks or months to complete before the bigger rally really starts to build momentum.  Yet, the evidence is starting to build that a decreasing US Dollar trend may prompt this new cycle phase shift in the currency correlation and that may prompt a big shift in how precious metals and miners start to rally higher.  Right now, we are seeing Gold and Silver start to shift into a new bullish trend bias – therefore, we may be starting to see a shifting in expectations; which is very similar to what we saw in 2000~2005 – just before Gold exploded higher.Make sure you stay on top of the prices of precious metals if you want to be able to take advantage of the expected rally. Every morning I share my market analysis and review the price action of precious metals with my premium subscribers of BAN Trader Pro. Join now to get my pre-market video analysis deilvered to your inbox every morning, and get ready for a great ride in Gold and Silver over the coming months and years!Enjoy the rest of your weekend!!
Watch Out As Gold Appears To Be Staging New Momentum Base In Preparation For A Big Upside Move

Watch Out As Gold Appears To Be Staging New Momentum Base In Preparation For A Big Upside Move

Chris Vermeulen Chris Vermeulen 17.05.2021 15:03
Although Gold has continued to drift downward after reaching a peak near $2089.20 in early August 2020, our Custom Gold Inverse Trending Index suggests this weakness has actually built a very strong momentum base – preparing for a big move higher.The relationship of Gold to the US Dollar is a fairly widely known correlation.  When the US Dollar is weaker, Gold tends to rally.  When the US Dollar is stronger, Gold tends to be weaker.  Yet the combination of EURUSD and JPYUSD (plotted in INVERSE) in combination to the trend of the US Dollar related to Gold is difficult to ignore.  Let's explore this unique correlation a bit deeper.Exploring Currency/Gold Correlations – Are We Starting A New 7 Year Gold Rally?The Weekly Gold vs Currencies Chart, below, may seem a bit complicated, so let me try to explain what I'm trying to illustrate. First, the CYAN colored line is the US Dollar Index.  What I want to share with you is the US Dollar enters periods of strength or weakness for extended periods of time.  You can see the US Dollar Index weakening near the left edge of this chart near 2006-07, then strengthening again after a moderate bottom near 2013~14, then starting to weaken again after the recent peak in March 2020.  These roughly 7-year cycles act as major US Dollar Index bias trends.  We are current within a weakening US Dollar Index bias based on our research.Second, the 85 to 86 level on the US Dollar appears to be a moderately critical support level.  When the US Dollar falls below this level, entering a period of broad overall weakness, Gold tends to react to US Dollar strength more aggressively than when the US Dollar stays above the 85~86 level.  A good example of this can be seen by the 2019 to 2020 rally in Gold while the US Dollar Index traded moderately higher while above the 86 level.Next, when the EURUSD and JPYUSD move into a position of strength compared to the US Dollar, Gold tends to trend generally higher as the US Dollar weakness is persistent in driving traders/investors into safe-havens.  The 0.65 level, the BLUE line, on this chart highlights the combined threshold for the US Dollar Index and the EURUSD/JPYUSD trend bias.Lastly, we want to highlight how Gold reacted to US Dollar bottoming rotations in different bias trends.  We've highlighted a number of US Dollar bottoms with MAGENTA arcing arrows.  Notice how stronger upside moves in the US Dollar Index while trading below the 85~86 level prompted fairly deep downside price trends in Gold.  You can see this happen over and over again in 2008, 2010, and 2011.  Now, compare the US Dollar rallies/bottoms in 2014, 2016, and 2018 to how Gold reacted while the US Dollar Index had transitioned into a bullish bias (moving above the 85~86 level, or trending towards this bias). The deep low in the US Dollar Index in 2011 prompted a very big change of trend for Gold – prompting a -20% decline followed by a deeper -38% decline before starting to bottom in 2015.  The US Dollar bottom in 2015 prompted another-20% decline in Gold prices, yet the transition of the US Dollar moving to levels above 85~86 while the EURUSD/JPYUSD fell below 0.65 prompted a shift in how Gold started reacting to US Dollar weakness.  The US Dollar bottom in 2016 actually prompted some moderate strength in upside trending in Gold and continued a new bullish bias for Gold over the past 6+ years.Sign up for my free trading newsletter so you don’t miss the next opportunity!Now, with Gold rallying off the current US Dollar weakness while trading quite strongly above $1800, we are starting to see a transitional shift in the US Dollar Index and the EURUSD/JPYUSD correlation.  Just like in 2006-07, if the US Dollar continues to weaken and trail below the 85~86 level, the current bullish trending in Gold will likely continue to strengthen.  At that time, reactions to US Dollar bottoms may prompt some Gold volatility and rotation, yet the bias of the trending appears to be starting a new 7-year bullish Gold trending phase (just like what happened between 2007 and 2014).  All we need to see happen is for the US Dollar to continue to weaken to levels below 85~86 (or continue to drift lower) while the EURUSD/JPYUSD correlation continues to strengthen.Comparing Inverse EURUSD/JPYUSD to Gold TrendsOur research team decided to try to use the EURUSD/JPYUSD correlation and attempt to align it to the price of Gold.  In order to do this, because of the inverse price relationship between the two, we had to invert the EURUSD/JPYUSD price structure.The Japanese Candlesticks on the chart, below, are reflective of our EURUSD/JPYUSD correlation to Gold.  The GOLD line on the chart, below, is the real Gold Futures price level.We are starting to see an upward price correlation between these two symbols as well as a potential technical correlation setting up over the next few weeks.  If the US Dollar continues to weaken, pushing the EURUSD/JPYUSD higher, we'll likely see an RSI bullish breakout confirm the price trigger that has just broken the downward price channel on this chart (the MAGENTA line).It appears the recent weakness in Gold translates into the building of a new momentum base for precious metals near $1700.  Are you ready for what may come next?Although it may be difficult for you to see and understand these broad market bias phases and cycle trends, there are two key elements I hope you to conclude from our research:It appears a, roughly, 7-year currency/gold cycle phase takes place where the US Dollar becomes decidedly weaker while the EURUSD/JPYUSD becomes decidedly stronger – then these two switch directions/strengths.  When the US Dollar is weaker throughout this 7 year cycle phase, Gold tends to become a bit more reactive to US Dollar strength, yet Gold continues to trend higher showing a very defined bullish trend bias.The transitional process of this cycle phase appears to be shifting into US Dollar weakness right now.  The recent downward price trend in Gold appears to be a new Momentum Base in price near, or above $1700.  If our research is correct and the proposed current transition takes place in the near future (the new cycle phase), we may see Gold enter a very defined bullish trend bias lasting more than 4~5+ years.If you believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily pre-market reports, proprietary research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers. Sign up today!In Part II of this article, I will explore longer term charts and how this currency correlation may be confirming a big upward price trend in Gold and what it means for traders/investors.  I will also explore how this new potential rally phase in gold translated into proper positioning of assets and preparations for broad market volatility.Have a great weekend!
Apple, Tesla, and Bitcoin are in a technical ‘Excess Phase Top”

Apple, Tesla, and Bitcoin are in a technical ‘Excess Phase Top”

Chris Vermeulen Chris Vermeulen 17.05.2021 14:58
Yesterday I highlighted thebroad market cyclesand what technical analysts call the “Excess Phase Top” process, which usually takes place after the markets peak and setup a downward price trend.There are a number of technical setups that take place throughout this process. Today, I will be exploring the charts of Tesla (TSLA), Apple (AAPL), and Bitcoin (BTC) to see where they are in the process.The suggestion I am making by highlighting these market trends and setups is that a Cash Position is a viable allocation of capital away from risks and losses. Many traders don't view a cash position as a properly allocated use of capital. We believe taking a cash position at the right times can anddoes provide very clear benefits, including:Eliminating risks of further losses/drawdowns.Setting up a process of protecting cash and waiting for a confirmed re-entry trigger.Avoiding the failure of buying into a declining market – which is one of thebiggest faults of active traders.Using the Cash position as a hedge against shifting currency/market valuations.Remember, in many cases, broad market downtrends are often associated with bigger trends in currencies and global market sectors. Chasing these trends can lead to further risks if you are not careful and skilled in your trading decisions. Keeping your capital in a Cash Allocation/Position is often the easiest and safest way for you to ride out volatile downside price trends and allows you tore-deploy your cash into new trades when the time is right.Understanding Broad Market Cycles & TrendsBefore we get started, we are going to share the broader market cycles chart with you to refresh your memory (or if you missed the first part ofthis research article).Before looking at the charts, please bear in mind that these patterns often take place over many months. Usually, the initial topping (#1) phase and flagging formation (#2) take place over a 60 to 90+ day span of time. Yes, sometimes these setups can take place over shorter spans of time, but usually, they last over 60+ days.Additionally, the breakdown of the Flag formation (#2), which leads to the setup of intermediate support (#3), can often take many months to complete aswell. My research team and I have seen the Flagging setup last well over 30 days at times and after the immediate support level is reached, markets sometimes attempt to move sideways for many weeks/months before attempting to break below that support level.APPL Continues To Flag Out – Watch for potential breakdown below $115.The Weekly AAPL chart below highlights the rally from $35 to over $140 over the past 2.5 years (notice the price split that happened in 2020). This rally reached a peak near January 25, 2021 (#1) and has fallen nearly 20% from the peak levels before starting a sideways Flag formation (#2). This type of setup completes the first two processes of the Excess Phase Top setup and aligns with the broader market cycles to suggest we mayhave entered the “Complacency” phase of price trending.The sideways Flagging pattern (#2) on this chart suggests AAPL may continue to move within this price channel before attempting to either recover, by moving to new highs or to break below the $115 level (#3), which would confirm the next phase of the Excess Phase Top pattern. If we see any continued breakdown in price, traders need to prepare for the markets to attempt to move downward, targeting historical support levels, where we expect price toconsolidate for many weeks/months. I have drawn a YELLOW line near a very clear support level for AAPL near $80 as a potential downside price target. If this Excess Phase Top pattern fails, we will likely see AAPL rally back above $145 and attempt to break into a new bullish trending phase.Tesla Breaks Below Flag Channels – What's Next?The following Weekly TSLA chart highlights the rally from $73 to over $900 over the past year (note the price split that happened in 2020). This rally also reached a peak near January 25, 2021 (#1) and has fallen nearly 40% from the peak levels before starting a sideways Flag formation (#2). At this phase of price action, we can see TSLA has recently broken below the lower Flag price channel and may be attempting to start a downward price trend where price will seek out intermediate support.I have drawn a YELLOW line near a very clear support level for TSLA near $430 as a potential downside price target for this next phase of the Excess Phase Top pattern (#3). From atechnical standpoint, if the support level near recent lows, near $540, holds, and price is unable to move below this level, then we may see a technical failure of the Excess Phase Top pattern. The move to the intermediate support level, which must be lower than the lows of the Flag formation, is critical in confirming the move into “Complacency” and the transition into “Anxiety” on the Broad Market Cycle example. Without this subsequent breakdown in price happening, we would consider the Excess Phase Top pattern potentially invalid (or failed) and start to watch for any new upside price trending – eventually targeting recent highs near $780. At this point, the $540 lows have become the new critical price level for TSLA and we are expecting price to continue to move lower, possibly breaching the $540 level.Bitcoin Gaps Lower After Peak & Breaks Flag Lows – What's Next?This last chart for Daily BTC Futures highlights the rally from $10,200 to over $65,500 over the past 7.5 months. This rallyreached a peak near April 14, 2021 (#1) and Gapped lower on April 19, 2021. The recent downside price move from that peak totaled nearly -27% before starting a sideways Flag formation (#2). In order to confirm the next phase of this Excess Phase Top pattern, we would watch for price to break lower, breaking the Flag formation channels, and attempt to break below the recent support level near $47,440. If we see a strong breakdown in price where closing price levels break below $47,440, I would expect price to move quickly below $40,000 and attempt to seek out critical support.I have drawn a YELLOW line near a very clear support level for BTC near $34,250 as a potential downside price target for this next phase of the Excess Phase Top pattern (#3).Recently, Bitcoin broke below the Flag formation lower channel and briefly traded below support near $47,440. If we continue to see downward price trending where price closes below this level, I would consider this technical confirmation of the Excess Phase Top pattern, suggesting price will attempt to continue moving lower while trying to seek out intermediate support (near the YELLOW line possibly).At this point, Bitcoin is showing moderate weakness and has already attempted to break recent support. Any confirmation of further downward trending could push us out of the Complacency phase and into the Anxiety phase of the broad market cycles. Are you ready for what's next?The question of “Should You Be In Cash” right now is a very valid concern for many traders/investors. Learning how to identify and understand risks and technical patterns/setups in the markets is critical to understanding how to protect and grow your wealth. Additionally, learning to use the Cash Position, and proper position sizing, asa valid type of trading allocation is essential, in our thinking, to protect your assets throughout volatile market trends. The next 12 to 24 months are almost certain to include much higher price volatility and big price rotations/trends, which will translate into incredibleopportunities for traders/investors.Over the next 6+ months and beyond, there are going to be incredible market moves. Staying ahead of these index and sector trends is going to be key to developing continued success. As somesectors fail, others will begin to trend higher, and this is the type of research and work I share every day at The Technical Traders Ltd.Happy Trading!Chris VermeulenChief Market Strategistwww.TheTechnicalTraders.com
Where's The Beef?  Is The US Fed Behind The Inflation Curve?

Where's The Beef? Is The US Fed Behind The Inflation Curve?

Chris Vermeulen Chris Vermeulen 12.05.2021 17:24
We recently completed some interesting research related to one of our newest Custom Indexes – the Commodities to Smart Cash Index (C2SC Heat Index) - weighted by the US Dollar and VIX.  We've been reviewing this new index for months watching it to see how it reacts to various trends in Lumber, Gold, Treasury Yields, the Smart Cash Index, and other weighted values.  Recently, we added the Fed Funds Rate to this chart and suddenly things took on a different perspective.We had drawn horizontal lines on the Commodities to Smart Cash index highlighting historical high, low, and confluence price levels.  Historically, when we see a chart that channels in a sideways range, one can often identify high and low price thresholds while also trying to find a confluence level (where a continued rise or decline in price is likely to continue). We can see how the US Fed reacted to rising inflationary concerns almost immediately as the C2SC Index rose near or above 6.5 (the RED Confluence level) throughout the past 25 years.  Each time, in 1994, 1999, and 2005, when a period of increasing inflationary trends, the Fed was quick to act to contain inflation.  The only time the Fed acted differently was in 2013~2015 and in 2020~now.Where's The Fed?  Watch Precious Metals For Signs Of PanicIn 2013~2015, the C2SC Index rose above the Confluence level (the RED line) multiple times, yet the Fed kept rates extremely low – ignoring inflationary risks at that time.  Then, in 2016, the Fed raised rates very slightly in an effort to test the global market's reaction to tightening financial policy ahead of a big US election event.  By mid-2017, the C2SC index started rising and the US Fed continued to raise interest rates.  By late 2017, the C2SC index had risen past the RED Confluence level again and the US Fed continued to raise rates well into early Summer 2018. In August 2018, the Fed attempted another 0.25% raise that broke the market trend and prompted a broad market decline into December 2018.  In reaction to this breakdown in US markets, the US Fed dropped the Fed Funds Rate from 2.5% to 1.5% in a panic move.  It stayed at that level until COVID-19 hit in February/March 2020.Looking at the C2SC index, commodities have rallied more than 300% above the past 25 years of historic highs recently while Yields and Gold/Silver continue to stay rather muted in trends.  Our concern is that the US Fed, in an effort to spark a solid post-COVID-19 economic recovery, has ignored the risks related to the extreme excess phase rally taking place throughout the globe in commodities, Cryptos, non-tangible speculative assets (NFTs, digital and others) as well as the risks associated with an eventual raising of interest rates to curb this inflationary excess phase.  Gold and Silver have just started what appears to be a new bullish price trend.  Will the US Fed be pushed to raise rates soon to curb this incredible bubble rally?We started bouncing around the idea that the US Fed was inadvertently prompting a South Seas Company type of bubble event by allowing gross amounts of capital into the markets and artificially keeping interest rates near zero.  For those of you who don't know the story of the South Seas  Company in London (1720), you can read more about it here: https://www.britannica.com/event/South-Sea-BubbleFOMO Hyper-inflation Continues (until it ends)In short, The South Seas Company was awarded £7 million to finance the war against France by the House of Lords.  This bill, known as the South Sea Bill, allowed the South Sea Company a monopoly on the trade to South America (mostly Slave trade) and was expected to be a boost to the companies bottom line as the war with France ended with the Treaty of Utrecht (1713).  Over the next 5+ years, the South Seas Company enjoyed robust profits and trade. Shares of the South Sea Company rose to 10x their value.  Then, the South Seas Company, with King George I of Great Britain as governor of the company in 1781, suggested taking over the national debt of Great Britain in 1720. Sign up for my free trading newsletter so you don’t miss the next opportunity!The South Seas Company accomplished this incredible feat and shares started to skyrocket higher from $128.5 to over $1000 in just 7 months.  As the hype continued to drive speculation and rumors, other stocks (some newly formed companies) were quick to catch the hype and quickly rallied to extreme highs as false statements, word-of-mouth hype and a general hyperbolic frenzy continued to drive speculation.What brought down the South Seas Company was unbridled rumors, outright lies, hyperbolic speculation, and, eventually, a flood of money from France's modernized economy.  When the trend finally broke down, it took about 12 months for the entire bubble to deflate – leaving speculative investors holding empty bags.The rally of the South Seas Company is very similar to what we are seeing right now in the US economy and in digital assets.  There were a number of facets in place to drive this type of hyperbolic rally.  First, the South Seas Company took over the national debt – essentially acting like the US Federal Reserve for Great Britian.  Secondly, the wild speculation related to ongoing business activities and future expectations prompted an over-enthusiastic buying frenzy – driving prices higher by 10x traditional valuation levels.In the end, with all the speculation, hype and people of title involved, the expected profits and returns from the South Seas Company never really materialized.  The stock price started to decline and finally broke downward very sharply near late 1720 – almost 3 months after it peaked.Is The US Fed Preparing To Make A Move Soon?The recent rally in the US stock markets has seemed to stall recently, as can be seen in this Smart Cash Index chart below.  Still, the recent rally since the November 2020 elections is nothing short of amazing – very similar to the rally in 2017 and into early 2018 – almost straight up.Our research team believes a continued market rally may keep attempting to “melt-up” as long as the US Fed does not step in to try to curb inflationary aspects of the markets.  It is hard to argue that traders and investors are going to suddenly change their minds in the midst of this FOMO rally - although, it does happen at some point.There are really two concerns related to how this may end: the US Fed suddenly acting to curb inflation by raising rates and/or the consumers suddenly realizing the valuation levels have exceeded realistic expectations.  We feel the rise in commodity prices as well as the current uptrend in precious metals and Copper may be pushing consumers closer and closer to that sudden realization that valuations are grossly advanced in comparison to real expectations.When you look at this Smart Cash Index Monthly chart, below, you see that the Fed Funds Rate is still anchored near ZERO while the Smart Cash Index is nearing the highest levels since the January 2018 Ultimate Peak.  The primary difference is that the US Federal Reserve is not acting to raise rates like they were in 2018 or even just before the Housing Bubble (2005~06).  This suggests the rally may continue in a hyper-inflation trend and may push well beyond anyone's expectations in the near future. Remember, our C2SC Heat Index is showing the current rally is nearly 300%+ above normal upper ranges.  How far will it go?  We really don't know how far this could continue to rally or where the ultimate peak is going to set up.  All we can suggest at this point in time is that we've entered uncharted waters and we don't have many historical reference points to use for our analysis. All we can do is ride this trend out using our advanced price modeling systems and watch for signs of a breakdown in support and correlative assets (like Precious Metals, Bonds, Utilities, and the Fed Funds Rate). If the Fed suddenly starts making moves to address pending inflation, then we may see some big volatility hit the markets.  We feel the Fed will slowly move to address inflationary concerns over the next 12+ months – not move in a sudden, aggressive manner. We need to watch how commodities continue to rally and how consumers react to these inflationary price concerns.  If global consumers suddenly shift away from spending as prices continue to rally, then we may start to see a dynamic shift in how the economy continues to expand/recover.  Consumers become very protecting of capital/resources when an economy shifts from expansion to contraction.Either way, there are going to be some really big trends in 2021 and 2022 for traders/investors.  This is the type of setup that can make fortunes for skilled traders/investors.  The bigger question is, will you be ready to jump into the strongest sectors when this downside trending ends?  Do you know which sectors present the best opportunities for future profits?  You can learn more about how I identify and trade the markets by watching my FREE step-by-step guide to finding and trading the best sectors. Don’t miss the opportunities in the broad market sectors over the next 6+ months.  Staying ahead of these sector trends is going to be key to developing continued success in these markets. My BAN Trader Pro newsletter service does all the work for you with daily pre-market reports, proprietary research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers. Sign up today!Have a great week!
Transportation Index Continues To Grind Higher

Transportation Index Continues To Grind Higher

Chris Vermeulen Chris Vermeulen 07.05.2021 14:25
If the face of last week's sideways price action and almost in a rebellious manner today (May 4, 2021), the Transportation Index is moving higher while the US major indexes are all broadly lower.  VIX has shot up over 20 again (over +13% higher) and the NASDAQ is off by more than 300 points (-2.75%) as I write this article.  Yet, the Transportation Index is bucking the trends and trading higher.WHAT DOES IT MEAN WHEN THE TRANSPORTATION INDEX BUCKS THE MAJOR INDEX TRENDS?My team and I have often highlighted the Transportation Index in our past research article. The reason we watch this index so closely is that it tends to lead market trends by at least 30 to 60 days.  In short, the Transportation Index is a measure of future expectations related to freight, shipping, transportation, and the movement of goods and commodities across the US and across the globe.  When an economy contracts, the Transportation Index will likely follow major indexes lower as future expectations related to economic activity contract.  When a recession or deep price correction happens, the Transportation Index usually moves sharply lower as the sudden shock of an unexpected economic contagion vastly alters future economic expectations.  But generally, the Transportation Index tends to front-run economic expectations.The fact that the US major indexes are all broadly lower while the Transportation Index is moderately higher (and really running counter to the bearish trending) today suggests this price decline is a technical pullback in price – not a broad market contagion event.  As we interpret this early stage price rotation, we have to call it as we see it right now - Crude Oil is higher, the Transportation Index is higher, and the US Dollar rebounded higher yesterday.  Until we see confirmation within all three of these components related to a change in price trend, we believe the current move is a technical pullback of the bullish price trend, meaning the markets just got ahead of themselves recently and this is a common pullback.We are fairly early into this pullback and things may change if it progresses downward over the next few days/weeks.  But right now the strength in the Transportation Index, the US Dollar, and Crude Oil are suggesting the markets are expecting a continued reflation trade (upward trending) to continue at some point in the near future.  If the Transportation Index were to fall below $14,800 on a deep price decline, then we would immediately become very concerned that a broad market bearish price trend has set up, possibly setting off a very deep price correction.As I highlighted in yesterday's research article, precious metals will likely continue to rally in a moderate upside price trend because both Gold and Silver have recently started a new Advancing Cycle Phase. This start of a new Cycle Phase may be prompting some early rotation in the US major indexes right now and we'll just have to watch and see how this proposed technical pullback plays out over the next few days/weeks.Watch previous Pivot Low levels for support in the markets.  We are seeing some increased volatility and when markets break previous “stand-out” pivot lows, that's when we want to prepare for the potential of a deeper downside price trend. The basis of Fibonacci Price Theory is that price is always seeking new highs and new lows – thus, the breach of a major “stand-out” pivot low could be interpreted as a major breakdown in price trending.The bigger question is, will you be ready to jump into the strongest sectors when this downside trending ends?  Do you know which sectors present the best opportunities for future profits?  You can learn more about how I identify and trade Gold, Silver, and the markets by watching my FREE step-by-step guide to finding and trading the best sectors. Don't miss the opportunities in the broad market sectors over the next 6+ months.  Staying ahead of these sector trends is going to be key to developing continued success in these markets. My BAN Trader Pro newsletter service does all the work for you with daily pre-market reports, proprietary research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers. Sign up today!
Gold & Silver Begin New Advancing Cycle Phase

Gold & Silver Begin New Advancing Cycle Phase

Chris Vermeulen Chris Vermeulen 06.05.2021 17:17
Before going into detail regarding my latest research and cycle phases, I want you to think of these cycle phases as Advancing and Declining cycle trends.  They act as a “build-up of trend”, then an “unwinding of trend”.  In each instance, trends can be either Bullish, Bearish, or Neutral in nature.  My research team and I believe a new Bullish Cycle Phase has begun in Gold and Silver.  If our research is correct, the next Advancing Cycle Phase may prompt a broad rally in Gold and Silver.Understanding Cycle Phase Analysis & Trends in MetalsWe interpret these cycle phases as unique trend segments involved in a broader cycle scope.  For example, over a longer-term rally, we may see many Bullish Advancing and Declining cycle phases take place – one after another.  Conversely, we may see many Bearish cycle phases take place in an extended downtrend.  Another type of cycle phase can also exist, the Reversal Cycle Phase – where price Advances in one direction and Declines in the opposite direction.  This type of Rotation Cycle Phase exists as the current completed Cycle on the Gold chart, below.As we are nearing the end of the current Declining Cycle Phase as seen in the chart below, we will soon begin the new Advancing Cycle Phase in Gold.  Gold's Reversal Cycle Phase that took place between December 21, 2020, and May 10, 2021, will likely close higher than the midpoint (or Apex) of the total Cycle Phase.  This suggests a new bullish price trend has taken over and the price is more likely to move higher in the next Advancing Cycle Phase. If this trend continues, then the price will continue to rally higher in the Declining Cycle Phase as well – as we saw in the first Cycle Phase: between March 16, 2020, and August 3, 2020.Gold & Silver Phase Tables – Will Price Continue A New Bullish Cycle Phase?To help explain our Cycle research, we've put together these tables to detail the Cycle Phases and price logic we use to interpret each Advancing and Declining phase.  Each table entry consists of an Advancing, then Declining Cycle Phase.  Combined, they make up a complete Cycle Phase.  We are measuring price at the midpoint (Apex) of the Cycle Phase to determine if any Advancing or Declining Cycle Phase is Bullish or Bearish in trend.  If both Advancing and Declining Cycle Phases show the same trend direction, we define that completed Cycle Phase as Bullish or Bearish.  If they differ in trend types, we define that completed Cycle Phase as a Reversal Phase.Sign up for my free trading newsletter so you don’t miss the next opportunity!Gold has been in a downtrend recently while Silver has continued to stay somewhat bullish in a sideways price trend.  You can see from the tables below, Gold recently completed a Reversal Cycle Phase (ending with a Bullish Declining Phase) while Silver has continued to exhibit Bullish Cycle Phases since March 9, 2020.Both Gold and Silver ended their last completed Cycle Phases recently.  Gold will end the last completed Cycle Phase on May 10, 2021.  Silver ended its last completed Cycle Phase on April 12, 2021. The next Advancing Cycle Phase for both Gold and Silver will begin this week and next week – and will continue until July 19, 2021.  After that, the Declining Cycle Phase will begin and last until late September, for Gold, and late October for Silver.If our research is correct, we may see extended bullish trending over the next 6+ months in both Gold and Silver.Silver Cycle Phases Continue To Show Stronger Bullish TrendingThe following Silver Weekly Chart highlights the Cycle Phases and highlights the price trends for each Advancing and Declining Cycle Phase.  While Gold has experienced an extended Bearish Cycle Phase over the past 5+ months, Silver has continued to show stronger bullish price Cycle Phases and continues to attempt higher closing price levels at the end of each Cycle Phase.  We believe this suggests Silver is likely to see some explosive upside price trending when the $28.42 level (the higher YELLOW line) is breached.  This level represents historical price resistance for Silver.  Once this level is breached, we believe Silver will begin to advance higher very quickly.Remember, we have until July 19, 2021, before the first Advancing Cycle Phase in Silver ends.  This Advancing Phase may prompt a move above the $28.42 level and may attempt to rally above $30.00 as we have drawn on the chart (below). If the Declining Cycle Phase continues this bullish trend, we may see Silver trading above $32.00 ~ $33.00 before Halloween 2021.  This would represent a +26.5% rally in Silver from the last completed Cycle Phase price level.In closing, we want to suggest that a rally as we are proposing in Gold and Silver will also present a renewed risk factor for the US and global markets (potentially). In the past, we have seen precious metals rally while the US stock market rallies.  It is not uncommon for precious metals to begin to move higher while the US stock market continues to move higher.  This type of price activity simply suggests that global traders/investors are moving capital into Precious Metals as the US stock market climbs a strengthening “wall of worry”.  This type of price action happened from 2004 to 2009 – prior to the Credit Crisis/Housing Crisis.As we've been suggesting for many months, the next few years are going to be full of incredible opportunities for traders and investors. Smart traders will quickly identify these phases of the market and will understand how to position themselves to take advantage of this next phase. You can learn more about how I identify and trade Gold, Silver, and the markets by watching my FREE step-by-step guide to finding and trading the best sectors. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily pre-market reports, proprietary research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers. Sign up today!Happy Trading!
Gold & the USDX: Correlations

Want To Invest In Real Estate But Don’t Have The Down Payment?

Chris Vermeulen Chris Vermeulen 28.04.2021 15:51
As an asset class, real estate should be a part of every balanced investment portfolio. That's because real estate investments generally have a low correlation to stocks, can offer lower risk, and provide greater diversification.Today about 65% of Americans own a home, but that means that tens of millions of Americans have no exposure to real estate. Making matters worse, becoming a homeowner today is harder than in previous generations, with 1 in 5 millennials believing they will never be able to afford a home. Is there a way to get exposure to the real estate market for as little as $100?Residential real estate market trendFrom the chart below, we can see that the residential real estate market continues to climb and the median price of houses sold in the US is near recent all-time highs of $347,500. Even though mortgage rates remain near all-time lows, the appreciation of prices in certain pockets of the country are making many cities and areas simply unaffordable for most. Things look much the same for industrial, commercial, agricultural, and most other specialized real estate subsectors.how can you invest in real estate through the stock marketThe stock markets offer three different ways you can invest in real estate, and today we will be looking at three of them: REITs, ETNs, and ETFs.A REIT is a real estate investment trust and it generally owns, manages, and/or finances income-producing real estate assets. REITs are generally highly liquid (trading like stocks) and are known to produce steady income through dividends as opposed to focusing on capital appreciation.There are hundreds of REITs, with the most popular focused on retail, residential, healthcare, office, and mortgages. Having REIT status enables those companies to avoid paying taxes at the corporate level as taxes are paid by the investors when they receive distributions of income in the form of dividends.Sign up for my free trading newsletter so you don’t miss the next opportunity!A real estate ETN is unsecured debt of real estate assets, essentially a type of bond with a maturity date (but without interest payments). ETNs do not provide ownership of the underlying assets, but their performance is directly correlated to the performance of those assets.Investors need to be wary that they can lose all of their ETN investment if the underlying debt goes into default. They also face closure risk if the issuer closes the ETN before maturity by paying the prevailing price in the market (potentially creating a loss for the investor). Despite these risks, some investors prefer ETNs because of the tax treatment for long-term ETN holdings.A real estate ETF is the same as any ETF, being a basket of securities in the real estate sector that can be bought and sold on the stock market. Real estate ETFs often focus on a collection of REITs, offering investors a way to diversify their real estate bets without the torture of researching hundreds of REITs. REIT ETFs offer investors to earn dividend income like REITS while also benefiting from higher diversification and greater market liquidity, which are the hallmarks of all ETFs.  what makes a good reit etf?First, you need to decide if you want a mortgage or equity REITs, as well as if you are looking for an objective-specific REIT (like storage facilities) or something more broad and big-picture (like residential real estate). Your REIT ETF should also have a good amount of assets under management in order to keep expense ratios down, and always check to see if the ETF you are interested in has sufficient liquidity.The charts below show you the performance of the three largest real estate ETFs. Each of these ETFs have over $5 billion of assets, are highly liquid, and a slightly different focus in either the index they track or the real estate assets they are comprised of.Vanguard Real Estate Index Fund (NYSEARCA: VNQ)Vanguard focuses on US equity REITS with a small allocation to specialized REITS and real estate firms.iShares U.S. Real Estate ETF (NYSEARCA: IYR)The iShares REIT, above, follows the Dow Jones U.S. Real Estate Index, whereas Schwab’s REIT ETF (below) follows the smaller Dow Jones U.S. Select REIT Index. Schwab US REIT ETF (NYSEARCA: SCHH)For those of you that get my daily BAN Hotlist, you will know that real estate triggered a signal more than a month ago indicating the sector to be in an uptrend. Real estate continues to be a top-performing sector, with all three of the biggest ETFs gaining more than 15% so far in 2021. In fact, more than 90% of all real estate ETFs have outperformed the S&P500 this year. When you add in the fact that some of the REIT ETFs are also producing annual dividend rates as high as 7-8%, it becomes clear that real estate ETFs should be part of your portfolio.The strongest sectors are going to continue to be the best performers over time.  Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about the BAN strategy and how to identify and trade better sector setups by registering for our FREE step-by-step guide. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts.More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Happy Trading!
Financial Sector Appears Ready To Run Higher

Financial Sector Appears Ready To Run Higher

Chris Vermeulen Chris Vermeulen 28.04.2021 15:43
As we transition into the early Summer months, we are watching how different market sectors are reacting to the continued shifting of capital over the past 60+ days.  One this is very clear, certain market sectors are strengthening while others have run into resistance and are consolidating.  We believe the next few weeks and months will continue this type of trend where capital continues to shift away from risks and into sectors that show tremendous strength and opportunity.We wrote about how Precious Metals are likely starting a new bullish price trend on April 18, 2021. You can read that research article here: https://www.thetechnicaltraders.com/metals-miners-may-have-started-a-new-longer-term-bullish-trend-part-ii/.We wrote about how the recent bullish price trend was based on a “wall of worry” and how the markets love to climb higher within this environment on April 14, 2021.  You can read that research article here: https://www.thetechnicaltraders.com/us-equities-climb-a-wall-of-worry-to-new-highs/.We also published an article on April 11, 2021 suggesting the Cannabis Sector had reached a Pennant Apex and would likely begin a new bullish price trend after some “shakeout” price volatility near the Pennant Apex.  You can read that research article here: https://www.thetechnicaltraders.com/is-the-cannabis-alternative-sector-rally-ready-to-breakout-again/.XLF May Rally Another 8% - 10% Or MoreToday, we are revisiting a recent research article suggesting the Financial Sector may be poised for another rally trend targeting the $38.00 level first, then the $39.40 level based on our research.  The financial sector continues to trend higher after the COVID-19 market collapse.  Global central banks and government policies are very accommodating to stronger earnings and growth in the Financial sector.  Recently, the US Government passed a new COVID stimulus bill that allocates money for at-risk borrowers to help elevate foreclosure actions.It is very likely that these continued actions to support a stronger US and global recovery will translate into higher price trending in the Financial sector as we move into the Summer months – where weather and Summer activities push people back outside and into more active lifestyles.Using our Fibonacci Measured Move technique, we have identified a support level in XLF near $34.50.  Therefore, as long as price stays above this level, we believe a continued bullish price trend will push future prices towards the target levels near $38.00, then $39.40. We are watching for the next 0.61% Fibonacci level, near $36.93, to be breached as a sign the bullish price trend is accelerating.Although the market may appear to be very extended and overbought, we still believe there is room to run for certain market sectors.  XLF, MJ, GDXJ, SILJ, and many others have recently moved into our watchlist for new bullish trends.  Are you ready for profit from these moves?Identifying the strongest sectors within the current market environment, as well as knowing when price trends generate clear entry triggers, can mean the difference between long-term targeted success and simply guessing at trades.  If you want to take advantage of a strategy that helps you find and execute better market sector trades, then sign up now for my FREE course that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum.For those of you who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Have a great week!
Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues

Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues

Chris Vermeulen Chris Vermeulen 28.04.2021 00:35
A recent Forbes article highlights the incredible increase in market leverage since the start of the COVID-19 crisis.  There has never been a time in recent history where market leverage has reached these extreme levels.  Additionally, highly leveraged market peaks are typically associated with asset bubbles. The easy money policies and global central bank actions have prompted one of the longest easy money market rallies in history.  Historically low interest rates, US Federal Reserve and global central bank asset-buying programs, and extended overnight credit support have prompted some traders and investors to move into a more highly leveraged position expecting the rally to stay endless.  Although, the reality of the global market trends may be starting to cause traders and investors to become a bit unsettled.  Precious Metals, Utilities, and Bonds have all started reacting to perceived fear related to this extended bullish rally trend recently.https://www.forbes.com/sites/greatspeculations/2021/04/24/uh-oh-market-leverage-at-all-time-high/?sh=29eadac1e8a9My research team and I believe the current market rally will likely continue as capital shifts away from extended market sectors.  We believe the transition away from the new US President and the new policies associated with this change of leadership has already started taking place – which is why Precious Metals, Utilities, and Bonds are starting to trend.  Yet, we believe the momentum behind this current rally is likely to extend through the end of April and into early May 2021. Custom Volatility Index Shows Bullish Trending & Price Volatility RisksOur Custom Volatility Index chart, below, shows the US markets have just recently rallied back to previous bullish market trending levels (above 13 on this chart).  Once this Custom Volatility Index reaches these levels, we normally expect two market traits to continue.  First, we expect bullish trending because the Volatility Index above 10~11 strongly suggests an extended bullish trend is in place.  Secondly, we expect moderate price rotation to take place after the Volatility Index reaches levels above 13~14.It is very common for the Volatility Index to move above the 13~14 level in extended rally trends.  Yet, it is also common for the markets to rotate or retrace after reaching these levels.  Therefore, this Custom Volatility Index chart shows the US markets have moved into extreme bullish price trending and has already reached a peak level near 15 – which suggests we can expect some moderate price rotation within the next 3 to 5+ weeks.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Whenever the US major indexes trend higher in longer-term extended trends, the Custom Volatility Index typically stays above 10~11 and continually attempts to rally above 12~13.  The “Peak Volatility Channel” on this chart highlights areas of extreme peaks in the markets.  When the Custom Volatility Index reaches this level, price becomes more likely to rotate or retrace a bit before attempting to move higher.  Smart Cash Index Shows Global Markets Need To Break Above 210 TO Begin A New Rally PhaseOur following Custom Smart Cash Index shows the global markets have been struggling to move higher over the past few months.  Even though the US markets have attempted to rally to new highs, the Smart Cash Index chart shows this recent rally has not been seen in the global markets. My team and I believe the next rally phase in the markets must initiate with the Smart Cash Index chart rallying above 210 and representing a moderately strong global market push higher throughout the May/June 2021 time span.  If the Smart Cash Index fails to move above the 210 price level, the we believe a moderate price correction may be setting up for May or June 2021 where the US markets may move moderately lower, attempting to retest recent support, then begin another rally attempt.Currently, the global stock market and financial system leverage may be an unknown catalyst for some type of future market movements.  The Forbes article suggests these new all-time high leverage levels are likely the result of global central bank policies where traders and investors believe the central banks will continue to support the markets indefinitely.  As much as we would like to think this may be the case, the reality is that, at some point, normalization will take place in the global markets and that presents an ominous deleveraging event in the future.We are watching how the market's sectors are shifting trends and how some of the strongest sectors are shifting and weakening over the past 60+ days.  For example, the Russell 2000 had been one of the strongest market sectors up until about 2 months ago.  Now it appears to be trading in a sideways trend – attempting to move back into a bullish price trend.Our research team believes traders and investors need to be prepared for quickly shifting sector trends over the next 6+ months as this highly leveraged global market event plays out.  Our research suggests a price rotation event is near and the global markets are still trending in a moderately strongly bullish trend. The strongest sectors are going to continue to be the best performers over time.  Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about how I identify and trade these sectors by registering for my FREE course here. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Enjoy the rest of your Sunday!
Are Metals & Miners Starting A New Longer-Term Bullish Trend?

Are Metals & Miners Starting A New Longer-Term Bullish Trend?

Chris Vermeulen Chris Vermeulen 19.04.2021 03:53
Almost in stealth mode, precious metals have begun to bottom and start a new upside price trend while the US stock market focused on the FOMC meeting a few weeks back and current economic data.  Gold, Silver, and many of the Miner ETFs recently started a moderately strong push higher – almost completely behind the scenes of the hype in the markets regarding IPOs and Bitcoin's new recent highs.All the Gold traders know that when Gold starts a new leg higher, it could mean inflation fears are being amplified in the global markets and/or fear is starting to creep back into the markets.  After the recent rally in the US major indexes and as we plow through Q1:2021 earnings, it makes sense that some fear and inflation concerns are starting to take precedence over other concerns.  Will the markets just continue to push higher and higher? Or are the market nearing some type of intermediate-term peak after rallying from November 2020? Only time will tell...The recent move in Gold and Silver prices suggests traders and investors are starting to act more aggressively to hedge against downside market risks.  My research team and I believe these upside trends may confirm an upside breakout trend in Precious Metals and Miners within 2 to 4+ weeks. You may find some of our earlier research articles related to metals, including our April 15th price targets for Gold, Silver, and Platinum, and our research from March 26th where we explore an impending miners breakout rally.Custom Metals Index Shows Breakout Starting – 433 Level Is ConfirmationLet's start by reviewing our Custom Metals Index Weekly chart, below.  The continued downward price slide from the early August 2020 peak has extended more than 8 months. Recent lows also align with the peak levels just before the COVID-19 market collapse (February 2020).  Our research suggests this level will act as a strong support level and may prompt a new bullish price leg in Precious Metals and Miners if we continue to see confirmation of this uptrend in the future. Confirmation for our research team would be a strong close above 433 on our Custom Metals Index chart – closing above the 2021 Yearly highs.We urge readers to pay close attention to the RED price channels on this Custom Metals Index chart.  These historic price channels may become very relevant in the near future.  A strong upside price breakout in precious metals may prompt a rally that extends aggressively higher – attempting to reenter this current price channel.  If this were to happen, Gold would have to rally above $2165 by July 2021.  This would certainly put Precious Metals into a new longer-term bullish price trend.Junior Gold Miners Need To Continue Higher To Confirm Breakout/Rally TrendThe following GDXJ chart highlights the base/bottom that has setup in Junior Gold Miners and also highlights the past failed breakout attempts following the CYAN downward sloping trend line.  If this current breakout attempt is valid, we will see a continued upward price trend that confirms the breach of this downward sloping trend line over the next 5 to 15+ days.  We expect this move to happen fairly quickly given how traders have shifted focus recently into hedging against downside price concerns.Miners and Junior Miners tend to lead Precious Metals prices in volatile price trends.  Junior Miners act as a leader for the Precious Metals sector as investors expect stronger Precious Metals prices to translate into stronger earnings for Junior Miners.  Therefore, when traders perceive Precious Metals prices are bottoming or starting a new uptrend, Junior Miners will likely lead the rally in metals because Junior Miners will directly benefit (bottom-line profits) if metals prices move higher. Ideally, we would like to see a strong close above $53~54 to confirm this upside breakout trend.  This past standout high/resistance level seems key for any continuation of any bullish breakout trends.14+ Months Into A New Depreciation Cycle – What Next?As the US stock market continues to push into new all-time highs almost every week and inflation concerns are starting to rise, while global central banks are still acting to support the global market recovery, it seems oddly similar to the 2001~2009 Depreciation Phase which prompted a rally in Gold from $262 to over $1900 (over 700%).  We wrote about this change in global cycle trends in our December 18, 2020 research entitled Metals & Miners Shifting Gears.The Monthly Gold chart below highlights our research into the broader Appreciation/Depreciation phases of the global markets.  Notice how Gold rallied during the last Depreciation phase (from 2001 to 2011) – even starting to rally higher just before the Depreciation phase started and continuing for nearly a year after it ended.  This happens because global traders/investors start shifting their focus into hedging against risk before the Depreciation Phase actually kicks into gear – just like what is happening right now; on the right edge of this chart.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The price Appreciation Phase ended near the end of 2019 (just before the COVID-19 market collapse). Yet, the US stock market has continued to rally higher and higher over the past 24 months, well into the start of the Depreciation Phase cycle.  This is what we call an “Excess Phase Rally” - where prices continue to trend because of momentum and herd mentality from traders.  As we are seeing right now, certain sectors, technology, and the US major indexes are still pushing to new all-time highs.  This is partially because traders continue to pile into the momentum trades/trends – chasing those profits.Gold has started to react to the Depreciation cycle in a way that suggests the global markets may eventually transition into a bit of a sideways price trend or come under some type of renewed valuation concerns over the next 3 to 5+ years.  This type of general market concern, as well as the desire to hedge against risk, may prompt a continued rally in Gold to levels above $3000 - as shown on this chart. Staying ahead of these types of sector trends is going to be key to developing continued success in these markets.  As some sectors fail, others will begin to trend higher.  Learn how BAN strategy can help you spot the best trade setups. You can learn how to find and trade the hottest sectors right now in my FREE course. For those who believe in the power of relative strength, cycles and momentum then the BAN Trader Pro newsletter service does all the work for you in determining what to buy, when to buy it, and how to take profits while minimizing downside risk. In Part II of this article, we'll highlight continued opportunities in various metals/mining stocks/ETF as well as continue to highlight our believe that Precious Metals and Miners are starting a broad market transition into the Depreciation Phase cycle.  Are you ready for it?  Are you ready for increased global stock market volatility and trends while Precious Metals may start a new 140% to 250% potential price rally?Have a great weekend!
US Equities Climb A “Wall Of Worry” To New Highs

US Equities Climb A “Wall Of Worry” To New Highs

Chris Vermeulen Chris Vermeulen 14.04.2021 18:26
Low volume rallies have become a standard of trending recently.  We see higher volume when volatility kicks in near areas of broad market volatility.  Otherwise, we see lower volume trending push the prices higher recently in a “melt-up” type of mode.Two recent standout events confirm this type of trending and volatility phases of the markets: (1) the September 2020 to early November 2020 (pre-US Election) rotation in price; and (2) the recent February 2021 to late March 2021 sideways price rotation related to the FOMC meeting/comments.  Both of these events centered around external market components and prompted an extended period of price volatility related to uncertainty.  After these events passed, price fell back into a low volume rally mode for many months, where most of the actual price gains happened.The following Daily QQQ chart highlights my observations related to this type of price activity.  We start in the pre-COVID-19 price rally from October 2019 to the peak near mid-February 2020.  It is easy to see the decreased volume activity while prices climbed more than 27%.  Then, the COVID-19 even sent volatility skyrocketing higher and prices collapsed by 30%.  This type of “Wall Of Worry” trending is common and presents a very clear opportunity for traders.After the March 2020 bottom, prices began another low volume rally that lasted from April 2020 to August 2020 – totaling a substantial +45% gain.  Again, starting in mid November 2020 and ending in mid February 2021, the QQQ rallied over 15% in a low volume “melt-up” trend.Come watch over 60 investment and trading LEGENDS share their secrets with you for free – click here for your FREE TICKET!Currently, the volume has started to subside after the FOMC meeting/comments volatility and we are starting to see moderately strong upward price trending in the QQQ.  This suggests we have entered another “Wall Of Worry” trend which may continue for many weeks or months.The following Weekly XLY, SPDR Consumer Discretionary ETF chart highlights how diverse this “Wall of Worry” trend really is.  It translates into other sectors with almost the same velocity as it does in the QQQ.  In this example, we can see the strong trending, highlighted by GREEN ARROWS, at the same time as the decreasing volume took place.  Each of these rally trends coincides with the QQQ trends.  The rally from April 2020 to August 2020 represented a +35% gain.  The rally from November 2020 to February 2021 represented a +21% gain.  The current rally attempt has already advanced over 17% higher and may continue to rally for many more weeks.If there is no future disruption of this low volume trending, then we may expect to see the US stock market continue to move in this manner for many weeks or months to come.  These low-volume “Wall Of Worry” trends can be very profitable and can prompt big moves in sector ETFs.Many traders continue to miss opportunities in these markets because of worry or concerns of a breakdown in the trend. Eventually, something will prompt a correction or breakdown of this rally trend.  But until that happens, traders need to be able to identify and profit from these strong low volume rallies as they present some of the lowest volatility price advances recently. Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about the BAN strategy and how to identify and trade better sector setups by registering for my FREE Trading Course here. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Enjoy the rest of the week!
Many Sectors Are Primed For Another Breakout Rally - Are You?

Many Sectors Are Primed For Another Breakout Rally - Are You?

Chris Vermeulen Chris Vermeulen 13.04.2021 21:42
As we start moving into the Q1:2021 earnings season, we need to be aware of the risks associated with the volatility often associated with earnings data and unknowns.  Nonetheless, there are other factors that appear to be present in current trends which suggest earnings may prompt a moderately strong upside breakout rally – again.One key factor is that the US markets are already starting to price in forwarding expectations related to a reflation economy – a post-COVID acceleration in activity, consumer participation, and manufacturing.  Secondarily, we must also consider the continued stimulus efforts, easy monetary policy from the US Fed, and the continued trending related to the 12+ month long COVID-19 recovery rally. In some ways, any damage to the economy related to COVID-19 may have already happened well over 6+ months ago.  Certainly, there are other issues we are still dealing with and recovering from, but the strength of the US economy since May/June of 2020 has been incredible.  When we combine the strength of the economic recovery with the extended support provided by the US Fed and US government stimulus/policy efforts, we are left with only one conclusion:  the markets will likely continue to rally until something stops this trend.Just this week, after stronger inflation data posted last week, and as earnings data starts to hit the wires, we are seeing some early signs that the US major indexes are likely to continue to trend higher – even while faced with odd earnings data.  If this continues, we may see the US major indexes, and various ETF sectors, continue to rally throughout most of April – if not longer.Come watch over 60 investment and trading LEGENDS share their secrets with you for free – click here for your FREE REGISTRATION!Today, Aphria (APHA), announced a third-quarter “miss” on sales, and net operating loss fell more than 14%.  This tugged many Cannabis-related stocks lower and pulled the Alternative Harvest ETF (MJ) lower by over 4%.  Still, the Transportation Index, Financial sector ETF (XLF), and S&P500 SPDR ETF (SPY) rallied to new all-time highs.This suggests the market is discounting certain sector components as “struggling” within a broadly appreciating market trend.  In this environment, even those symbols which perform poorly won't disrupt the Bullish strength of the general markets.  Because of this, we believe the overall trend bias, which is Bullish, will continue to push most of the market higher over the next few days/weeks... at least until something happens to break this trend or when investors suddenly shift away from this trend.SPY Rally May Be Far From Over At This StageLet's start by reviewing this SPY Daily chart below (S&P500 SPDR ETF).  As you can see, the recent rally has already moved above the GREEN 100% Fibonacci Measured Move target level near $410.  Any continued rally from this level would suggest an upside price extension beyond the 100% Fibonacci Measured Move level is initiating.  This type of trending does happen and can often prompt a higher target level (possibly 200% or higher) above our initial targets.What is interesting in our review of these charts is the SPY may be rallying above recent price range targets, using the Fibonacci Measured Move technique, but other sectors appear to really have quite a bit of room to run.Transportation Index Continues To Suggest Stronger US RecoveryThis Transportation Index Daily Chart, TRAN, suggests a target level near $15,627 so it is reasonable to assume the Transportation Index may continue to rally more than 4% higher from current levels.  Ideally, if this were to happen, it would suggest the broader economic recovery is strengthening and we may expect to see the US major indexes continue to rally higher as well.At this time, when economic data and Q1:2021 earnings are streaming into the news wires, we usually expect some extended volatility in the markets.  The VIX may rally back above 19 to 24 over time if the markets reflect the varied earnings outcomes we expect.  Yet, we believe the overall bias of the markets at this stage of the trend is solidly Bullish.Financial Sector ETF Ready To Rally Above $37The Financial sector ETF (XLF), as seen in the following chart, is poised to break higher after a dramatic recovery in price after December 2020.  The rally from $29 to over $35 represents a solid +20% advance and the recent resistance level, near $35.30, is a key level to watch as this sector continues to trend.  Once that resistance level is breached, we believe a continued rally attempt will target $37, then $39.40.The expected recovery in the US economy will prompt more consumer spending and the use of credit.  Over the past 8+ months, US consumers have worked to bring down their credit levels and saved more money because of the change in how we addressed COVID work-styles and lack of travel (and extra money from the Stimulus payments).  That may not change right away, but eventually, consumers will start to engage in the economy as travel starts to recover and summer activities start to take place.  This suggests spending, travel, vacationing, eating out and other activities will prompt a new wave of economic activity within the Financial Sector.The US markets are uniquely poised to further upside price gains because the US has such a dynamic core economy.  Our base of consumers is, generally, working in jobs, saving more, and more capable of traveling within the US to engage in summer activities.  Because of this, we believe the continued recovery of the US economy will prompt another wave of higher prices throughout the Q1:2021 earnings season.  We believe a number of solid earnings and expectations will support the market and future expectations will support a continued moderate price rally in certain sectors.The strongest sectors are going to continue to be the best performers over time.  Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about the BAN strategy and how to identify and trade better sector setups by registering for our FREE webinar here.  We've built this technology to help us identify the strongest and best trade setups in any market sector.  Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades.  You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Happy Trading!
The SPY Is Nearing Resistance @ $410... Read On To Find Out What Is Next

The SPY Is Nearing Resistance @ $410... Read On To Find Out What Is Next

Chris Vermeulen Chris Vermeulen 09.04.2021 21:49
My shorter-term analysis for the markets continues to stay Bullish and suggests the US reflation trade, the strengthening of the US and the global economy, and recovery from the COVID-19 restrictions will likely prompt a moderately strong upside price trend leading into at least mid Q2:2021.  The recent strength of the US Dollar is helping to push capital into the US markets as foreign investors attempt to shift capital away from Emerging Market and currency weakness and the Treasury Yield rallies seem to have indicated a moderate warning related to global central banks attempting to front-run inflation concerns.SPY Targeting $410, then $425 or higherIf the US Dollar continues to strengthen and foreign capital continues to flow into the US stock market, then my research team and I believe a continued “melt-up” bullish price trend will continue, similar to what happened in 2018~2019.  As we can see on the chart below, the upside price target for the SPY is $410.15.  Once that level is reached, we believe a moderate sideways Bull Flag will set up and prompt another upside price rally targeting $425~$430.The rally in the US stock market will likely continue until key factors break down.  We don't know what those key factors are going to be, but we are watching our custom indexes and proprietary price modeling systems to identify if and when that breakdown takes place.  Currently, we don't see any real risk to a sudden downside price trend based on our research.  Of course, some sudden collapse in the global credit/banking industry, war, or some other unknown externality could easily disrupt the current balance of the markets.Right now, we are targeting the $410 level on the SPY and expect the next leg higher to target $425~430.  We believe the current market environment supports a continued $24~$28 Fibonacci Expansion range stepping higher as moderate pullback events take place after reaching subsequent upside targets.  This “upward stepping” price pattern will likely continue as the reflation trade pushes a continued “melt-up” price event. Remember, our research may change suddenly if needed and the best way to stay ahead of these market setups/trends is to get my daily BAN Trader Pro pre-market video that covers the charts of the major indexes, bonds, gold and silver, and other asset classes and sectors delivered top your inbox every morning. As with all things, we make decisions based on what we know right now and not based on what may or may not happen as a guess.  Our research and custom indicators suggest a strengthening US Dollar will pull foreign capital investments into US sectors/stocks and likely prompt another “melt-up” type of trend over the next few weeks and months.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those Best Assets Now that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.Lastly, take some time this weekend to check out all the great speakers at the Wealth 365 Summit, the world's largest online trading and investment conference. Make sure you register today!Have a great weekend!
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit?  Part II

Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II

Chris Vermeulen Chris Vermeulen 06.04.2021 20:49
In this second part of our exploration of the recent US Dollar rally and what it may be reacting to in relation to the current US stock market highs and continued rally, we will explore some of the underlying factors that are translating into US Dollar strength while the US stock market continues to push higher.In the first part of this research article, we highlighted the US Dollar reaction to the 2008-09 credit market crisis and how the US Dollar actually started to bottom/rally in early 2008 – just as the rollover top in the US stock markets continued to setup.  The way the US Dollar reacts to stress factors in the global markets is to strengthen as a safe haven as capital is constantly seeking the best environment for investment and profits.  When the markets enter a period of turmoil, the US Dollar typically begins to strengthen before the global markets really begin to react to the fear or turmoil.The recent news of large financial institutions and hedge funds taking large losses and closing operations is somewhat similar to the Lehman event of 2008.  These types of larger corporate debt collapses have wide-range global market effects.  Sometimes, these events can ripple into other global corporations who engaged in this level of financing or credit functions.  For example, Credit Suisse's attempt to recoup potential losses from the Greensill collapse may be a very complicated and fruitless process according to a recent Wall Street Journal article.Weekly US Dollar Shows Uptrend StartingThe current US Dollar Weekly chart, below, shows how the US Dollar has strengthened over the past 3 months and how this current uptrend aligns with the $89 lows from early 2018.  One of the most interesting aspects of this chart is the peak in early 2020, as the COVID-19 virus market collapse bottomed, which was followed by an extended decline.  As mentioned earlier, the US Dollar acts as a safe haven during times of uncertainty and chaos.  Obviously, the initial COVID-19 market selloff prompted quite a bit of uncertainty and chaos, prompting the US Dollar to rise nearly 9% in just two weeks.  Does the current upside trending in the US Dollar translate into more uncertainty and chaos in the markets?Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The recent bottom on this Weekly US Dollar chart happened on January 6, 2021. This was the day that Congress certified the US state electors.  It was also the day that chaos took place in Washington DC.  From that point onward, the US Dollar began a decidedly upward price trend.  Since that low on January 6, the US Dollar has risen over 4.60%.  Over that same time, the SPY has rallied more than 7.5%, which obviously fails to show any US or global market concerns.Weekly Smart Cash vs. US Dollar CorrelationsThe following chart shows the US Dollar (as a GOLD line) and our Custom Smart Cash Index (as a BLUE line) and highlights the threshold of the US Dollar that usually prompts a breakdown in price in the stock market.  The ORANGE threshold level on this chart for the US Dollar is 94.10 and the PURPLE threshold level on this chart 99.50.  Once the US Dollar reaches levels above the ORANGE threshold, the SPY becomes much more volatile and tends to retrace lower over time.  Once the US Dollar reaches above the PURPLE threshold, it appears the US Dollar reaches major resistance, stalls, and contracts, which prompts a fairly large upside price trend in the SPY.Currently, the US Dollar Index is trading just above 93.00 and it just 1.1 away from the ORANGE threshold.  Should the US Dollar continue to rally over the next few weeks and months, our research suggests the US stock market will enter a period of increased volatility with broad sector trending/rotation.  As you can see on this chart, near the end of 2018, the US Dollar Index rallied above the ORANGE threshold while the Custom Smart Cash Index entered a period of extended price volatility (2019 through the COVID-19 bottom in 2020).  Once the US Dollar Index fell back below the ORANGE threshold (July/August 2020), the Custom Smart Cash Index began to rally estensively.The current rally in the US stock market will likely continue until the US Dollar Index moves comfortably over the ORANGE threshold, there is a strong possibility the US stock market will enter a period of extended volatility and trending.  That means that the current bullish price trend may enter a broader rally phase – targeting a new excess phase peak.  Or, it may shift into more of a sideways price trend with a broad range of price rotation – like what happen in 2015 to 2016.Interestingly enough, near the end of 2016, as the US stock market bottomed and began to rally, the sectors that lead that rally included precious metals, miners, utilities, regional banking, and technology (later in 2017).  This suggests we need to watch metals & miners as well as utilities and regional banking sectors later in 2021.Currently, the leading sector trends are Real Estate, REITS, US Financials, Global Infrastructure, Global Natural Resources, Technology, Consumer Services, and Aerospace & Defense.  These leading sectors suggest many traders/investors believe the next few years will be filled with various advantages in technology, raw materials, consumer activities and infrastructure/defense spending.  Get ready for some really big trends in various sectors and be prepared to jump into some of these bigger trends.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Happy Trading!
Gold & the USDX: Correlations

How To Spot Boom and Bust Cycles

Chris Vermeulen Chris Vermeulen 29.03.2021 16:04
One of the most important aspects of trading is being able to properly identify major market cycles and trends. The markets will typically move between four separate stages: Bottoming/Basing, Rallying, Topping/Distribution, and Bearish Trending.  Each of these phases of market trends is often associated with various degrees of market segment trending as well.  For example, one of the most telling phrases of when the stock market is nearing an eventual Topping/Distribution phase is when the housing market gets super-heated.  Yet, one of the most difficult aspects of this Excess Phase rally trend is that it can last many months or years, and usually longer than many people expect.Until Gold Really Starts To Rally, Expect A Continued Rally In The Stock MarketWhen an Excess Phase rally is taking place in the stock market, we expect to see the Lumber vs. Gold ratio moving higher and typically see the RSI indicator stay above 50.  Demand for lumber, a commodity necessary for building, remodeling, and other consumer essential spending, translates well as an economic barometer for big-ticket consumer spending. Extreme peaks in this ratio can often warn of a pending shift in consumer spending and how the stock market reacts to an Excess Phase Peak.  Let's take a look at some of the historical reference points on this longer-term Weekly Lumber vs. Gold chart below.First, the 1992 to 2005 ratio levels represent a moderately low Gold price level compared to a somewhat inflated Lumber price level.  You can see how that dramatically changed between 2005 and 2012 – this was a time when Gold started a historic rally phase just before the Housing/Credit crisis of 2008-09.Since that time, the Lumber to Gold ratio has stayed below historical low reference points (near 0.6).  This shift in the Lumber to Gold ratio suggests that demand for Gold outpaced demand for Lumber over the past 10+ years.  Now, the Lumber to Gold ratio is climbing back to levels near or above that 0.6 level and may soon move higher if the post-COVID economic recovery continues while demand for Gold stays somewhat muted.Traders need to pay attention to this current rally in the Lumber vs. Gold ratio because a breakout rally above the 0.60 level would likely mean a continued rally phase for the US stock market and strong sector trending related to consumer spending, housing, and speculative sectors.  Whereas, a failure to rally above the 0.60 level at this stage may indicate that the US stock market will begin to stall and potentially move into a sideways correction before starting a new trend.Be sure to sign up for our free market trend analysis and signals nowso you don’t miss our next special report!Lastly, we have drawn some Std Deviation channels on this longer-term Lumber to Gold Weekly chart above.  It is very important to understand that a continued rally in the Lumber to Gold ratio will break above the upper downward sloping channel from the 1999 peak and potentially prompt a big upside price rally – likely pushing the US stock market to extended new highs.A Closer Look At The Current SetupWhen we zoom into the current price trends on the following Lumber to Gold ratio chart below, we can clearly see the two recent rally trends; the first after the 2016 US elections and the second after the COVID-19 bottom.  The most important aspect of this chart right now is that any continued rally in the Lumber to Gold ratio may quickly breach the 0.60 historical range and potentially prompt a very big rally in the US stock market over the next few months.The new COVID stimulus and the continued efforts to pass an Infrastructure Bill in the US Congress may prompt enough of a capital injection into the US economy to set off a “booster phase” rally at this stage in the economic recovery.  One simply can't rely on the fact that the Lumber to Gold ratio is near a historically critical level, we need to actually wait to see confirmation of a breakdown in this trend before we can say what is likely to happen in the near future.  If the ratio climbs above 0.60 and continues to rally higher, then it is very likely that the US and Global stock market trends will also continue much higher.Historical Peaks & Rallies – When To Be ConcernedThis longer-term Lumber to Gold ratio chart shows how the SPY continued to rally through various stages of the rally in the ratio level. We also have to remember the peak in 2000 was related to two important economic events; the DOT COM bubble burst and the 9/11 terrorist attacks.  Subsequently, the breakdown in the Lumber to Gold ratio that started in 2004 was related to a broadly weakening housing market trend – prompted by an ever-increasing Fed Funds Rate which began in 2004-05.  Currently, we have the US Fed promising “near-zero” rates through 2022 and an easy money policy throughout that time to support stronger global market recovery.  Barring any unforeseen credit, economic, or global market event, we believe a breakout rally in the Lumber to Gold ratio, assuming Gold stays below $2250 and does not enter a breakout rally phase, will coincide with a moderately strong US stock market rally.When should you start to be concerned that a top is setting up based on this ratio?Very simply put, when you see Gold start to rally above $2150~$2250 and breakout into a true rally while the price of Lumber begins to fall somewhat sharply, then we believe traders should start to actively protect positions and prepare for a bigger breakdown in the stock market trend.  Until Gold starts to react as a proper hedge, this speculative “excess phase” rally will likely continue higher.As a warning for all our friends and followers, a breakdown of this upside rally trend could be sudden if a major market event takes place.  For example, if a sudden collapse in the credit/debt markets were to happen (related to risk exposure or bank/financial firm failures), then we may see a very sudden breakdown in this ratio.  Additionally, if war or geopolitical economic tensions break out where excessive global risks become a factor, then we may also see this ratio turn negative quickly.Traders need to understand the potential for a continued stock market rally near these current levels is quite strong, but there are still risks of a sudden breakdown in trending.  The question that nobody can answer is “what will the catalyst event be and when could it happen?”. Until then, trade the hottest sectors using my Best Asset Now strategy, which you can learn NOW by signing up for my FREE webinar that will teach you how to find the best sectors to trade.Until the end of the trend is upon us, get ready for some really interesting global market trends and sector opportunities.  It is very likely that volatility will stay higher than normal prompting 2% to 4%+ rotations in market trends.  These next few years are going to be a trader's dream market in terms of trending and price rotation. For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Enjoy your Sunday!
Precious Metals Miners Setting Up For A Breakout Rally – Wait For Confirmation

Precious Metals Miners Setting Up For A Breakout Rally – Wait For Confirmation

Chris Vermeulen Chris Vermeulen 26.03.2021 19:23
Precious Metals have continued to slide sideways as the US stock markets have rallied into the FOMC meeting last week.  Not by coincidence, metals have continued to base/bottom near recent lows as concerns about the global debt/credit markets, central banks, and precious metal supplies continue to linger.  The US Fed indicated it will do whatever is necessary to support the recovering economy.  The question my research team asks in relation to the basis for a move in metals/miners is “do the global markets believe the global central banks still have control of the underlying global banking/credit markets well enough to prevent another massive rally in metals?”.This question should be first and foremost for metals precious metals enthusiasts.  Recently, there has been quite a bit of concern related to a Silver Squeeze and COMEX deliveries.  Currently, there is some speculation that the Perth Mint has a very limited supply of physical metals on hand and nearly 60x that amount on their balance sheets (Source: https://www.reddit.com/r/Wallstreetsilver/comments/mc18no/perth_mint_unallocated_silver_is_not_backed_by/).  We're no expert related to this lack of physical inventory, but if it is true, then a breakout rally in metals (a true metals SQUEEZE) could be just days or weeks away.Wait For Confirmation Of Miners Bullish BreakoutThe charts we are including in this article suggest “Wait For Breakout Confirmation” because we believe the current technical/price setup may prompt a bit of an extended bottoming formation.  If and when the breakout in miners happens, the upside price move could be very quick and efficient.The Weekly NUGT chart, below, shows how well price has consolidated near the $51 level and how the extended downside trend line (originating from the 2016 peak) aligns with the current price level.  Our researchers believe once this trend line is breached to the upside, NUGT may attempt a rally to levels above $108, the 0.618 Fibonacci Price Extension level, fairly quickly (possibly within 3 to 6+ months).  The $146 target level, a full 100% Fibonacci measured move, would represent a massive +167% price rally in NUGT (if it happens).  Quite literally, this breakout setup could be very explosive if and when it happens.Junior Silver Miners Showing Stronger Support – Waiting For Breakout ConfirmationThe following Weekly SILJ Junior Silver Miners chart shows a different type of price setup.  Junior Silver Miners have held up much stronger than Gold Miners over the past 6 months.  The reported Silver Squeeze could prompt a really big breakout trend IF and WHEN the current Pennant/Flag formation completes (which appears to be only a few weeks away).Be sure to sign up for our free market trend analysis and signals nowso you don’t miss our next special report!The first (0.618) Fibonacci target is near $20.50 – a 40% increase from current price levels.  The second target, a100% Fibonacci measured move, is near $25.25 – a 74% increase from current price levels.  Ideally, this type of breakout move in Metals Miners will happen as a pause in the upward movement of the US Dollar takes place.I believe the US stock market will continue to rally 4% to 8%, or more, over the next (3 to 5+) few weeks.  After that, we may start to see more weakness in the US stock market and the price trends leading up to this period of weakness is where we think Metals and Miners may start to rally.Again, we need to wait for confirmation of these breakout moves.  The technical/price setup we are seeing in both NUGT and SILJ suggests a potential breakout move may happen within the next 2 to 5+ weeks. There could be a deeper downside price move, a washout price low, that happens as the APEX of this move completes.  It is not uncommon for a “washout” trend to happen near a Flag/Pennant APEX.Overall, the next few weeks in the markets suggest we are likely to see fairly big sector trends and moderately strong support for Metals and Miners.  The strength of the US Dollar will likely keep metals from attempting any type of breakout move for a few more weeks.  When the Metals/Miners breakout move starts, though, it could be VERY EXPLOSIVE.Don’t miss the opportunities to profit from the broad market sector rotations we expect, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Have a great weekend!
Have Commodities Peaked?  We doubt it

Have Commodities Peaked? We doubt it

Chris Vermeulen Chris Vermeulen 25.03.2021 19:47
While everyone was paying attention to the FOMC, Gold & Silver, and the Treasury Yields, it appears the recent commodity rally trend took a big hit on Thursday, March 18, 2021.  Our guess is that the FOMC statement did nothing to support the continued commodity price rally as the US Fed continued with near-zero interest rates and economic support through 2023.  The rally in commodities was likely based on expectations of a much stronger economic recovery as the COVID vaccines take the pressure off economic shutdowns and further restrictive economic conditions, but that may not be the case.Commodities Rollover May Be Misleading TradersThe rollover in commodities suggests the markets are reacting to renewed expectations, post-FOMC.  They may continue to consolidate near support (near $16.30) before attempting to move higher as traders digest the Fed comments and fall back into economic recovery expectations.  Any move below $16.00 as seen on the chart below may likely prompt a consolidation phase within historical support channels (see the Weekly DBC chart below).Commodities Attempting to Base Near SupportThe following weekly DBC chart shows how the COVID-19 event collapsed commodity prices and how they've just recently rallied back to levels above the pre-COVID price range – above $15.00. When we start to look at longer-term trends, we start to see a number of key price levels that become important technical factors related to future trends.  The support levels that setup in 2019, pre-COVID, are still very valid current support levels for commodities.  If a continued economic recovery takes place, DBC will likely find support above $15 and then begin another rally phase targeting prices above $19 to $20.  This current rollover in commodity prices may be nothing more than a pause in price before another rally starts.Commodities Break Major Monthly Price ChannelLastly, looking at the Monthly DBC chart, below, highlights the very long-term price trends and what becomes immediately evident is that price has recently broken above the RED downward sloping price channel line. The momentum of the price rally that recently broke this downward price channel was strong enough to pierce this downward sloping channel – and it would not be uncommon for price to pause after this price breach.  The YELLOW support levels, from the weekly DBC chart, continue to confirm the $15 to $16 as active support.  Any price rotation or pause near this level will likely hold within this support range before attempting another move higher.Be sure to sign up for our free market trend analysis and signals nowso you don’t miss our next special report!We targeted price lows from 2012~2014 as a potential upside price target if the rally phase continues.  After breaking the major downward sloping price trend, it is very likely that once DBC prices rally above $18.50, a continued rally phase may target the $25 price level with an extended run over many months.Historically, a rally in commodities does not always prompt a rally in the US major indexes.  In 2007~08, commodities rallied extensively while the US stock market collapsed.  In 2010~11, commodities rallied as the US stock market rallied more than 27%.  In 2016~2018, commodities rallied as the US stock market rallied more than 62%.  The current breakout above the RED longer-term price channel suggests we may see a stock market rally aligned with a commodity price rally based on the recent comments by the US Fed.  Unless a major credit market or other catastrophic event takes place, we believe this upward trend in commodities may prompt an extended recovery rally in both commodities and the US stock market.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and manage positions for maximum profits from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets, and this year we see a change in leading sectors taking place from what they were last year.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with educational daily market video, updates, research, and my trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist, which ranks the hottest ETFs, which is updated daily for my subscribers.Happy Trading!
How to Stop Being Scared or Shaken Out Of Winning Trades

How to Stop Being Scared or Shaken Out Of Winning Trades

Chris Vermeulen Chris Vermeulen 24.03.2021 23:29
The markets really frightened a lot of people in the last month. We've received lots of emails and comments from people wondering what's happening in the markets and why thedeeper downtrend didn't prompt new trade triggers. Well, the quick answer is “this downtrend did prompt new BAN trade triggers and this pullback is still quite mild compared to historical examples”. Allow me to explain my thinking.The recent FOMC meeting as well as the expiration of the future contracts usually prompts some broad market concerns. Many professional traders refuse to trade over the 7+ days near an FOMC meeting – the volatility levels are usually much higher and this can throw some trading strategies into chaos. Our BAN Trader Pro strategy handles volatility quite well most of the time.Recently, theBAN Trader Pro strategyinitiated new trade triggers of subscribers and myself. Our members are engaged in the best-performing assets for the potential upside price rally that may take place over the next couple of months. Our strategies target opportunities based on proven quantitative technology – not emotions and use proven position management to maximize gains while reducing drawdowns.Transportation Index Daily Chart Is BullishThis leading index shows early strength in the market with an upside target of $14,668. That is a 3.5%-4.5% upside move ahead of us.Recently, we've seen some substantial support in the Transportation Index that aligns with our BAN Trader Pro strategy. The rally in the Transportation Index, which usually leads the US economy by at least 2 to 4 months, suggests the markets are actively seeking out a support level/momentum base for another rally phase. Using a Fibonacci Extension tool, we can clearly see the TRAN has another 3.5% to 4.5% to rally before reaching the 100% measured move target near $14,668. This level represents a full 100% rally phase equaling the initial rally from levels near $12,000 which started back in February 2021.Dow Jones Industrial Index Daily Chart is BullishThe Dow Jones Industrial Average has already reached the 100% Fibonacci Measured move – and broken above that level. If the markets rally from this recent pullback, webelieve a 4% to 5%+ rally in the Dow index is very possible. This type of bullish price trend suggests a target level near $34,000.One thing, many traders fail to consider is these 4% to 5% rallies in the Transportation Index and/or the Dow Jones Industrial Average will likely prompt an 8% to 20%+ rally in some of the best-performing assets/sectors. For example, after the bottom in early February, during a time when the index rallied less than 1%, the best-performing assets we tracked rallied more than 7% to 25%. The strength of these top-performing sectors/symbols can be very powerful – even while the US major indexes are drifting sideways.If the Transportation and Dow Index rally 4% or more over the next few weeks, then some of the best performing sectors will strong gains in our favor. It depends on how strong these top-performing sectors react to the underlying momentum associated with each symbol though.How to Avoid Emotional Trading DecisionsTrading based on emotions can lead to early, and sometimes foolish, entry and exits of positions. The market has a way of faking/shaking price which often prompt traders to react to the 2% to 4% swings in the markets as if they are catastrophic. Some of the best advice we can offer active traders other than becoming part of our trading group and pre-market analysis and trade alerts are..._ Trust your system/strategy and follow it from entry to exit trigger._ Define your risks and run the strategy efficiently_ Develop ways to identify andresolve strategy failure early and often_ Trading involves risks – learn to execute the strategy within your risk parameters (position sizing)_ Don't let emotions control you. Trade rules should protect you during high & low volatility conditions.If you don't have a strategy and can't see yourself sticking to these simple rules, then maybe it is time to find a better strategy or to attempt to develop some of these tactics into your existing strategy. You can follow me to success with my ETF Swing Trading Strategy, or our Options Trading Strategy at any time if you want all the work done for you.Be sure to sign up for our free market trend analysis and signals now|soyou don’t miss our next special report!Far too many people get lucky with a strategy then leverage their trading because they feel they will never fail. Failure of any strategy, often represented as the largest drawdown amount, should be multiplied by at least 3x when comparing risks. Just because your strategy showed one period of drawdown representing a -$5,500 loss does not mean that type of price activity is an isolated event. That type of drawdown could happen repeatedly, over a very short period of time, representing a -$16,500loss.The strongest strategy components are those that help to contain losses, manage risks and allow for the protection of capital. Remember, “living to trade another day” is far more important than huge gains off of one or two trades followed by a string he big losers that blow up your account.In closing, get ready for a recovery in stock prices. With the indexes poised to move higher by another 3.5% - 5% before reaching the next 100% measured move suggests some sectors will post spectacular gains. Don't let emotions dictate your decisions – run your strategy (or find a better strategy to trade with). The best performing sectors/symbols usually continue to outperform the US major indexes when trending higher.Don't miss the opportunities in the broad market sectors over the next 6+ months. 2021 and beyond are going to be incredible years for traders and investors. Staying ahead of these sector trends is going to be key to developing continued success. As some sectors fail, others will begin to trend higher. Learn how BAN Trader Pro can help you spot the best trade setups and deliver alerts to your phone and inbox.We've built this technology to help us identify the strongest and best trade setups in any market sector. Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades. You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.
After The Fed Week – What's Next?  Part II

After The Fed Week – What's Next? Part II

Chris Vermeulen Chris Vermeulen 22.03.2021 18:41
In the first part of this research article, we shared more detail related to the Excess Phase Peak technical pattern that is setting up in the NASDAQ and to highlight the validity of our Gann/Fibonacci Technical research which suggested a peak in the markets may set up sometime after April 1, 2021.  We've received many questions and comments from our readers and followers related to these articles.  Many people seem to believe we are calling for an April 1 market peak based on this research, yet the technical patterns we are highlighting suggest a longer-term market peak may already be setting up. In this second part of our more detailed “what next” article, my research team and I will highlight exactly why we believe traders and investors need to be prepared for an extended technical topping pattern and how it will likely set up over the next 60 to 90+ days.  Let's continue our research from Part I and go into more detail related to this technical setup.In Part I, we focused on the NASDAQ and how the recent downside price rotation may align with our Gann/Fibonacci research as well as align with the Excess Phase Topping pattern highlighted in our November 2020 research.  Now, we're going to focus on the Dow Jones Industrial Average and our Custom US Stock Market Index showing how these two market sectors have yet to react like the NASDAQ already has.Dow Jones Has Yet To Break Key Price ChannelLooking at the chart below, we can see that the INDU has yet to break the YELLOW upward price trend line.  We  have not seen price move below this support channel yet, thus we don't have any confirmation that a weakening in price trend is taking place.  In fact, recently the INDU has rallied higher over the last few weeks as capital has shifted away from the NASDAQ and into various other sectors. Next, we believe the INDU still has another 3% to 5% to rally further before reaching the GREEN 1.618% Fibonacci Price Amplitude Arc on the chart below.  This suggests the INDU may continue to rally a bit further before reaching resistance while the NASDAQ may attempt a more moderate price rally within the sideways (#B) Flagging channel.  This setup suggests the INDU and SPY have not yet reacted to price weakness like the NASDAQ already has.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!We've drawn a MAGENTA line on this chart highlighting what we believe a “technical breakdown” in price will look like for the INDU.  First, a rollover top sets up, prompting a downward price trend to set up the sideways Flagging trend.  After 4 to 8+ weeks of sideways Flagging, a broad downtrend will take place where price will fall -10% to -15% - targeting the CYAN support level near $29,000.  Much like the NASDAQ, this critical support level is the last line of defense before a bigger breakdown in price may occur – possibly resulting in a very deep price correction.Custom US Stock Market Index Chart Mirrors INDUThis final Custom US Stock Market Index Weekly chart, below, shows a similar type of setup as the INDU.  These Custom Index charts are tools we use to help gauge the overall market trends and possible technical setups.  They help to normalize price trends and variances between the major US indexes and provide a different perspective of price on a chart.The first thing we notice when looking at this chart is that the Custom US Stock Market Index has yet to break the YELLOW upward price channel – just like the INDU chart.  Secondly, we can see the Custom US Stock Market Index chart is much closer to the heavy MAGENTA Fibonacci Price Amplitude Arc than the INDU chart is – this suggests there may only be a 3% to 5% upside potential left in the markets related to any potential rally attempt.  Readers need to understand this does not mean that markets are limited to +3% to +5% at this stage – many sectors may trend +10% or more while the Custom US Stock Market Index chart rallies only 1.5% or so.  The stock market is a “market of stocks” - not a single entity related to the Custom US Stock Market Index chart.  Therefore, we may see various rally ranges in various sectors while we see more muted trends in some of these major indexes.The last thing we want to point out on this chart is the Fibonacci Price Amplitude Arc that originates from February 2020 (pre-COVID-19 highs).  It appears there is a high likelihood of a weakening uptrend on this chart after April 15, 2021.  It also appears there is a likely APEX inflection point near May 5 through May 10.  This APEX in price may become a key date for a potential breakdown in the trend on this Custom US Stock Market Index chart.Overall, what we are seeing on this chart is that we have yet to break below the YELLOW upward price trend line and we are nearing the key Fibonacci Price Amplitude Arc levels – this suggests the markets may be nearing a period of consolidation and/or weakening upward price trending. The key to all of these setups is the process of the Excess Phase Peak setup - where price must complete the four phases (A through D) before finally attempting a larger breakdown event (#E).Additionally, traders should stay keenly aware that various sectors will likely continue to trend in wide ranges with varying degrees of trend slopes while this extended pattern continues to setup.  On this Custom US Stock Market Index chart, we are suggesting that the #C breakdown event (targeting #D), may take place in July or August 2021.  This suggests we have about 3+ months of rotational sideways trending to navigate before the extended Excess Phase Peak #C breakdown event takes place.As these trends continue to setup, we want you to understand how various opportunities for trend will continue to setup over the next few months in various sectors and indexes.  These price rotations will likely prompt 8% to 25% price trends in a number of the best performing sectors and symbols.  The key to finding and targeting this success is to know which sectors/trends are have the highest probability for success.  That is what our Best Asset Now strategy does for us – it shows us when to engage with the market trends and which assets are the best performing assets to invest in.Don't miss the opportunities in the broad market sectors over the next 6+ months.  2021 and beyond are going to be incredible years for traders.  What we expect to see is not the same type of market trend that we have experienced over the past 8+ years – this is a completely different set of market dynamics. You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribersHave a great week!
After The FOMC – What's Next?

After The FOMC – What's Next?

Chris Vermeulen Chris Vermeulen 22.03.2021 03:01
I have received numerous emails and questions regarding the market's set up and what to expect after the Triple-Witching event (FOMC, Futures/Options expiration) last week.  It appears many traders/investors are seeking some clarity related to price trends and the potential opportunities that are setting up in the US markets right now.  In this research article, my research team and I provide some greater detail related to what we believe is likely to happen over the next 5 to 8+ weeks.Our recent Gann/Fibonacci research article drew quite a bit of attention from readers.  Their biggest concern was that we were suggesting a major peak in the markets could setup in early April 2021.  We want to be clear about this longer term market setup to make sure our readers and followers fully understand the implications of this technical pattern. A peak/top could start to setup anytime after April 1, 2021, based on the Gann/Fibonacci research we've completed.  But, that peak/top setup could also happen anytime between April 2021 and August 2021 (or slightly later).  Timing this pattern is not something we can accomplish very easily as the range of dates where this Gann/Fibonacci inflection level exists consists of about 5+ months.  The one key factor we continued to stress in that article was to “watch for a technical breakdown in price above the $379 to $380 price level on the SPY”.  Many readers may be able to comprehend what we are trying to say by this statement, but we'll try to help clarify it by showing what it would look like on a price chart.Back in November 2020, we published a research article about how to spot an Excess Phase Top and the 5 unique phases that take place when this type of top executes.  You can read this article here: www.thetechnicaltraders.com/how-to-spot-the-end-of-an-excess-phase-part-ii/.  It is important to understand how capital continues to seek out opportunities within any market trend and how the current shift away from the NASDAQ and into the Dow Jones, Russell 2000 and other various sectors has started to shift the way the markets are reacting right now.  We are seeing more weakness in the Technology and Internet sector now than we've seen in almost a decade.  This could be setting up the first technical patterns of an Excess Phase Top already.Monthly NQ Chart Shows Excess Phase Top May Already Have StartedThe following Monthly NASDAQ chart highlights the five unique stages of an Excess Phase Peak and shows the recent weakness in the NASDAQ price trend may have already started the Phase B (Price Flagging) stage.  Within this phase, price trends moderately higher for many weeks as weakness in the bullish price trend sets up a “rollover” type of peak.  Obviously, the previous excess phase rally is stalling and traders are not yet fully aware of the risks that may continue to be present if this pattern persists.  This Phase C (Breakdown of the Flagging pattern) would prompt a move to intermediate support, which will likely become the Critical support level in the NQ that may prompt the bigger Breakdown event(See the “D” setup).So, what would price activity look like if our research is correct?  How does this translate into opportunity for traders/investors right now and what should they look for in the future?Expect Many Weeks of Flagging In The NQLet's focus on the Weekly NQ Futures chart, below, and how the price has already set up into a potential sideways Bullish Flagging trend.  The first thing we want you to focus on is the broken YELLOW bullish trend line.  We would expect any continued sideways Flagging trend to trade within the CYAN price channels we've drawn on this chart.  If this happens, we should continue to expect some moderate upside price trending throughout the sideways Flagging price channel before a bigger breakdown in price happens (as we've drawn in MAGENTA).  This is why traders and investors need to fully understand the scope of our Gann/Fibonacci research article and to understand this setup may last into July/August of 2021 before finally entering a deeper downside price trend.We profit from volatility by using non-directional options trading strategies so watch our webinar on How To Become An Options Strategy Master now!If our research is correct, the sideways Flagging trend will prompt a moderate upside price trend for many weeks (possibly 4 to 8+) before a moderate breakdown event will see price levels fall -12% to -16% - targeting #D (the critical support level).  At that point, the trend may firm up near support and begin a moderate upside price trend for many weeks or months; or we may see a technical price bounce near this level before a more immediate breakdown of price takes place.  Either way, the Breakdown Zone is where we would consider a “technical price failure” to have confirmed – validating our Gann/Fibonacci peak prediction.Currently, numerous sectors are generating new bullish trend triggers – many of which have already rallied 20 to 40% or more.  As we suggested earlier, the shift in how capital is being deployed in the markets has prompted various sectors,many of which have been overlooked over the past 12+ months,  to really begin to accelerate higher.  This is because the froth near the peak in the NASDAQ, as well as the new geopolitical landscape, has prompted traders/investors to shift focus into new opportunities in sectors they believe have continued growth opportunities.  For example, the Marijuana, Consumer Discretionary, Infrastructure and Real Estate sectors appear to be entering new bullish trends while the Technology, Healthcare, BioTech and Chip Manufacturers appear to be stalling.What this means for traders/investors is that there is still lots of opportunity to trade the best opportunities in the markets.  This is the focus of my BAN trading Strategy.  Until we see a confirmed technical breakdown in the major markets, various sectors continue to present very strong opportunities for skilled technical traders.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  Learning to profit from these bigger trends and sector rotation will make a big difference between success and failure.  We want to be clear, we are not calling for an April 1 peak in the markets based on our Gann/Fibonacci research.  We are suggesting that a bigger “topping” pattern is already setting up in the markets and skilled technical traders should already be preparing for underlying risks related to this technical pattern.  If you are not prepared for this, then please pay attention and learn from our research. You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.In Part II of this research article, we'll attempt to share more information about the Excess Phase Peak setup that may be setting up in the US markets and what to watch out for.  Additionally, we'll take a look at the Dow Jones Industrial chart to compare the NASDAQ setup to the INDU setup.  Where we are seeing weakness in the NASDAQ right now, the Dow Jones Industrial chart appears to show a much stronger price trend right now.Enjoy the rest of your weekend!!
Are The US Markets Sending A Warning Sign?

Are The US Markets Sending A Warning Sign?

Chris Vermeulen Chris Vermeulen 16.03.2021 01:05
After an incredible rally phase that initiated just one day before the US elections in November 2020, we've seen certain sectors rally extensively.  Are the markets starting to warn us that this rally phase may be stalling?  We noticed very early that some of the strongest sectors appear to be moderately weaker on the first day of trading this week.  Is it because of Triple-Witching this week (Friday, March 19, 2021)?  Or is it because the Treasury Yields continue to move slowly higher?  What's really happening right now and should traders/investors be cautious?The following XLF Weekly chart shows how the Financial sector rallied above the upper YELLOW price channel, which was set from the 2018 and pre COVID-19 2020 highs.  Early 2021 was very good for the financial sector overall, we saw a 40%+ rally in this over just 6 months on expectations that the US economy would transition into a growth phase as the new COVID vaccines are introduced. Be sure to sign up for our FREE market trend analysis and signals now so you don’t miss our next special report!We are also concerned about an early TWEEZERS TOP pattern that has set up early this week.  If price continues to move lower as we progress through futures contract expiration week, FOMC, and other data this week, then we may see some strong resistance setting up near $35.25.  Have the markets gotten ahead of themselves recently?  Could we be setting up for a moderately deeper pullback in price soon?The following SSO, ProShares S&P 500 ETF Weekly chart, shows a similar setup.  Although the rally in the SSO is not quite the same range as the XLF, we are seeing a solid TWEEZERS TOP pattern setup on the SSO chart over a period of many weeks.  We also found the moderate weakness in the US indexes interesting this morning.  Last week, we continued to see very strong buying trends.  Today, we see those trends have almost vanished.  Are the markets setting near highs waiting for some announcement or news to push them into a new trend?The US stock markets have not experienced a moderate price pullback since August 2020 – when the SPY pulled back almost 11%.  Volatility is still quite high with 2% to 3%+ swings between trading days.  A moderate pullback from these levels could represent another -8.5% to -14% decline before true support is found.Watching the Yields, Precious Metals, and the moderate weakness in trend that started this trading week, we can only suggest that active traders/investors remain moderately cautious.  Our BAN Trader Pro strategy is currently 100% CASH (no trades) for a reason.  Pay attention to this rotation in the markets and the moderate weakness recently.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Have a great week!
STIMULUS AND CONSUMERS ARE THE KEYS TO FURTHER US/GLOBAL ECONOMIC RECOVERY – PART II

STIMULUS AND CONSUMERS ARE THE KEYS TO FURTHER US/GLOBAL ECONOMIC RECOVERY – PART II

Chris Vermeulen Chris Vermeulen 09.03.2021 13:46
This is a continuation of our extended technical review of what my research team and I believe will be required for the US/Global markets to enter a stronger post-COVID-19 recovery phase. If you missed Part I of this research series then you can find it here: www.thetechnicaltraders.com/stimulus-and-consumers-are-the-keys-to-further-us-global-economic-recovery-part-i/. In this Part II, we will look at how potential currency shifts will prompt new trending in various economic sectors.   The past 20+ years have really changed how the markets operate from a standpoint of capital deployment and capital function.  We certainly live in interesting times from a trader and investor perspective. There is more capital floating around the globe right now than ever before... and that changes certain things.The Components Of A Frenzied Global MarketThe first and most notable change is to create volatility at levels we have really never seen before.  The average daily price range on the QQQ or SPY charts is more than 3x historical price range levels.  This simple fact shows that a 1% price range, which used to be considered a moderately large price range for the price to move, is now considered a below normal range.  This new level of volatility has applied to many of the largest SPY and NASDAQ-related stock symbols over the past few years as capital was deployed into various sectors with increasing speed and volition.We profit from volatility by using non-directional options trading strategies.Watch our webinar on How To Become An Options Strategy Master now!The US and global central banks have continued to deploy easy money policies since the 2008-09 Housing/Credit crisis which has perpetuated a Roaring-20s type of mentality throughout the world.  Even though we could point out certain nations that are underperforming economically, generally the world has seen an unprecedented rise in credit, debt, and associated spending capabilities over the past 10+ years.  This level of unusual economic expansion comes with certain consequences, similar to the expansion that led up to the 2008-09 Housing/Credit crisis.It also has to be noted that COVID-19 has really altered the way consumers are engaging in the economy right now.  Online, stay-at-home, avoid outside risks type of activities have really become the new normal. Many sociologists continue to suggest consumers may be slower to move back into old economic habits (pre-COVID-19 spending habits).  This change in how people perceive risks and adopt new economic processes will likely lead to a rise in digital productivity, the adoption of technology solutions, and a change of spending habits, which could prompt a much bigger transition for certain market sectors that have been overlooked recently.Watch Chris and Neil Present at The Mad Hedge Traders and Investors Summit - Click to Register for FREE!One thing that has certainly benefited from COVID-19 is the number of new investors/traders plying their skills (and hard-earned cash) in the markets.  We've never seen anything like this explosive growth in retail market participation over the past 20+ years.  The closest we've come to this level of retail trader participation in the equities and financial markets was in 1998~99 during the height of the DOT COM bubble.  This incredible consumer participation in the global equities trends/trading has helped propel many US major indexes/sectors to incredible heights – and it may not end any time soon.The following Monthly ratio chart, comparing the growth in the QQQ, SPY, and GOLD since January 1, 2009 (the anchor price) highlights how the frenzy of investing really started to accelerate after 2012 and began to move into a parabolic trend in 2016.  If you follow the MAGENTA QQQ ratio after the vertical dateline on this chart, you will see how early 2017 started a dramatic acceleration in volatility and trending as the QQQ accelerated higher by more than +186%.  Meanwhile, the SPY, which was somewhat overlooked throughout this rally phase, moved higher by only +85%.Where is the Consumer?  Has The Consumer Really Retreated Because Of COVID-19?One prime example of this frenzy is this recent Yahoo! Finance story about burned Banksy Art which sold for over $390,000 as a Non-Fungible Token. The idea that anyone would buy a burned piece of art for this price shows that money has turned into a game for some people.  The gamification of wealth has likely transitioned into global social thinking in ways that we have not even considered yet.Even though we've highlighted how the global equity/financial markets have rallied considerably over the past 5+ years, we still need to see the consumer reenter the economy in a more traditional sense. This M1 Velocity of Money chart shows that after the 2009 peak, the velocity of money, the rate at which money is exchanged within an economy, has collapsed to levels we have not seen in 60+ years, and quite possibly below levels relative to the Great Depression (1930s).So, what's happening in the world right now to present these types of charts/data?  How can the world be flush with capital/cash and the data show that the consumer is still actively engaged in purchasing various items, which include very active engagement in the global equity markets and speculative trading positions, while the M1 Velocity of Money data shows an incredible collapse after COVID-19 hit?The answer is simple.  The US Federal Reserve has pushed more cash into the global economy over the past 10+ years than at any time in history (more than $16 Trillion since 2009).  Prior to that date the total amount of capital/debt the US Fed only pushed a total of $10.6 Trillion into the economy over a 40-year time span.  There is nearly 3x the total number of US dollars floating around the globe right now than at any time since prior to the 1950s.Eventually, we are certain that, this extended cash will translate into GDP growth – which will strengthen the Velocity of Money ratio over time.  What it will take is for the economy and the consumer to transition into a new form of expansion related to the post-COVID-19/post Technology euphoria that is currently taking place.Over the next 20 to 30+ years, we are going to see some very big trends in various sectors and commodities.  The global central banks have pushed so much capital out into the world that, once it finds its true economic purpose, we believe the function of this capital will be deployed into various economic components in ways we have not even considered yet.  New industry, new forms of consumer products, and consumer participation will likely evolve where capital can be put to use to improve the GDP levels.  Cryptos may be the start, a stepping stone, toward a much more dynamic solution for how capital is used and deployed within the global marketplace.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.In Part III of this research article, my team and I will continue to explore the future possibilities and make some suggestions as to how you can prepare for these big trends right now.  Remember, this is a longer-term outlook of opportunities for traders/investors.  The real gains related to this research will come 5 to 10+ years out into the future if you are able to identify how and where capital is being deployed for gains. Have a great day!
Stimulus And Consumers Are The Keys To Further US/Global Economic Recovery – Part I

Stimulus And Consumers Are The Keys To Further US/Global Economic Recovery – Part I

Chris Vermeulen Chris Vermeulen 08.03.2021 03:55
At this point in our lives, we are hoping the new COVID-19 vaccines will do their part to help move the world towards more normal consumer and economic activities.  The US Senate recently a new $1.9 Trillion stimulus package that should continue to provide assistance to various levels of consumer, state governments, and corporate enterprises.  The next question in our mind is “what will the recovery look like if/when it happens?”.  We need to look at three critical components of the global economy to help answer this question: Consumer Activity, Debt, and Supply/Demand Functions.Consumer activity makes up more than 60% of the US GDP.  It also drives money flow as consumers engage in economic activity, create credit for new purchases and help to balance the supply/demand equilibrium functioning properly.  The participation of the consumer within an economy is essential for a healthy growing economy.WHERE ARE CONSUMERS NOW & WHERE WILL THEY BE IN THE FUTURE?The US has passed more than $4 Trillion in COVID-19 stimulus over the past 12+ months.  At the same time, global central banks have also engaged in various easy money policies to spark global economic activity.  When we combine the efforts of world governments and central banks, we've seen an unprecedented amount of money deployed throughout the globe recently – and that money needs to find its purpose and use in the global economy quickly of the global economy is going to recover enough to spark a new wave of economic growth.We believe two key components of consumer engagement are at play right now; investing/trading in the US and global markets and Real Estate.  Whereas US consumers have been reducing debt exposure on credit cards and tightening their spending in other ways, trading volumes in the stock market Indexes and ETFs have increased dramatically over the past 12 months.  Additionally, low supply and low interest rates have kept the US housing market active, in addition to the boost in activity from people moving to more rural areas as the work-from-home phenomenon settles into the new normal.CASE-SHILLER HOME PRICE INDEXThis Case-Shiller 20-City Composite Home Price Index chart, below shows how quickly home prices have rallied over the past 12 months. Just prior to the COVID-19 pandemic, this index was flattening.  Then the moratorium on foreclosures and extended assistance for homeowners pulled many homes back off the market in early 2020.  That reduced supply and prompted a rally in home prices across the US.The assistance provided to these “at-risk” homeowners accomplished two very important economic benefits.  It eliminated a wave of new foreclosures (albeit possibly temporarily) and it prompted a seller's market because supply had been constricted.  The result is that many homeowners witnessed a 6% to 10% increase in their home values over the last 12+ months.DELINQUENCY RATES ON CONSUMER LOANSUnlike in 2006-2008 when delinquency rates skyrocketed during the housing crisis, throughout the COVID-19 pandemic, delinquency rates collapsed to the lowest levels over the past 25+ years.  Consumers took their extra capital, stimulus checks, and federal assistance and used the past 12+ months to eliminate certain debts.  Even though we are starting to see an uptick in delinquency rates in Q4 2020, these levels would have to climb considerably before we get close to the levels before the COVID-19 pandemic.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!This suggests that a broad spectrum of US consumers are in a much better economic position related to revolving debt, or credit card debt, than they were before the COVID-19 pandemic.  If these consumers begin to engage in a new economic recovery by engaging in a healthy credit expansion, we may see a boost to certain sectors of the economy over the next 24 to 36+ months.REAL PERSONAL CONSUMPTION EXPENDITURESUnlike many other indicators, Real Personal Consumption has risen past the pre-COVID-19 peak levels.  This suggests that consumers are still spending money on Durable Goods and are continuing to buy essential items to support their lifestyles and families.  Yes, there are a number of people that are unemployed or have transitioned to other types of work, but the stimulus efforts and extended unemployment assistance has translated into real consumer engagement for Durable Goods, as we can see from the chart below.Remember, Durable Goods are not typically found at Grocery Stores or Walmart.  They are items that have extended life-cycles (greater than three years); such as cars, planes, trains, furniture, appliances, jewelry, and books.  This rise in Durable Goods suggests that a large segment of the US consumer is actively engaged in making bigger-ticket purchases recently – possibly as a result of buying a new home, transitioning away from traditional work environments, and/or repositioning family essentials in preparation for a post COVID-19 world.  This type of economic engagement may continue for many months forward.CONSUMER PRICE INDEX – ALL URBAN CONSUMERSThe following Consumer Price Index chart shows that general consumer prices briefly dipped when COVID-19 hit in March 2020, but they have since rallied to new highs.  This is partially a result of the rise in home prices and rising commodity prices, which contribute to a rise in price levels for consumers.All of this data is showing that the US consumer is actually much more economically healthy than consumers were in the midst of the 2007-08 housing crisis. The stimulus efforts and partial economic shutdown did result in a large number of displaced or disadvantaged consumers, but it also shows that many US consumers were able to quickly transition into a different type of economic environment with very little extended economic risks.The new $1.9 Trillion stimulus package will offer even more assistance to consumers.  This new stimulus will be spent as new COVID-19 vaccines are being rolled out, suggesting the US is quickly moving away from extended risks related to the pandemic.  This means consumers will likely start attempting to go back to normal in certain ways.  Does this mean that the recovery efforts will strengthen the bullish price trend in the future and the US stock markets will continue to rally?In our effort to better identify opportunities for traders and investors as the post-COVID-19 recovery unfolds, we will continue to identify various market sectors that my research team and I believe have a strong potential for increased bullish price trends.  All of the data we've presented so far suggests the US consumer is much healthier than many people consider and that many US consumers are still actively engaged in some type of work/income solution.  The only reason why housing, durable goods, CPI, and other economic indicators continue to rise is because US consumers are actively engaged in buying/consuming bigger, durable goods.  This suggests the new $1.9 Trillion COVID relief effort may begin to push the US economy further into overdrive, and possibly pushing the supply/demand balance even further beyond the equilibrium zone.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.In Part II of this article, we'll take the data we've reviewed already and apply it to current market conditions, trends, and technical setups as we look for new opportunities in consumer-based sectors.  My team and I believe some very big sector trends are going to set up as a result of everything that is converging on the US and global markets.  It's time to get ready for some big trends. 
Gold Predictive Modeling Suggests A New Rally Targeting $2300+, But When Will it Start?

Gold Predictive Modeling Suggests A New Rally Targeting $2300+, But When Will it Start?

Chris Vermeulen Chris Vermeulen 04.03.2021 15:12
One of our readers' favorite tools is the Adaptive Dynamic Learning (ADL) predictive modeling system.  This tool maps out technical and price patterns into an array of similar setups using historical data, then applies that data to current and future price bars.  Using the ADL predictive Modeling tool, we can see into the future based on historical technical analysis that maps statistically relevant price activity and shows us the highest probability outcomes. Monthly ADL Gold PredictionsIn this research article, we're going to focus on Gold and how current price action suggests a bottom is likely near the $1720 level.  The YELLOW price channels on this Monthly Gold chart highlight exactly where we believe support is located for Gold.  If this $1700 price level is breached to the downside, then the previous lows, near $1400, are the next support level for Gold.Our ADL predictive modeling system suggests the $1720 support level will hold, prompting a new rally to levels above $2200 within 30 to 60+ days.  The ADL system predicts an aggressive move in Gold near May or June 2021.  The move higher may happen earlier than the ADL Monthly predictions indicate.  There is a chance that a move back above $1850 starts the move higher before the end of March or April 2021 – propelling Gold toward the $2300+ peak.  The actual peak level predicted by the ADL predictive modeling system is $2315.2-Week ADL Predicts Gold May Start To Rally near Mid-MarchThis 2-Week Gold Chart highlights a similar ADL price prediction.  What we find interesting about this ADL outcome is the similar price predictions originating from vastly different origination points.  The Monthly ADL prediction originates from a date of August 1, 2020 – the peak price bar.  This 2-Week ADL prediction originates from a date of November 23, 2020 – the intermediate low DOJI bar before the recent continue downward trend targeting the YELLOW price channel. Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The similarities between these two unique ADL predictions suggest that Gold may attempt to find support fairly quickly near the $1700 to $1720 level, then attempt to move above $1795~1825 as an early stage rebound off the lower YELLOW price channel.  The 2-Week ADL price prediction suggests that Gold will quickly attempt to move higher, before or near March 20th, targeting levels above $1900.  Then, as you can see from the YELLOW DASH LINES on this chart, Gold will attempt to move moderately higher over the next 2 to 3+ months targeting levels above $2030.If these ADL price predictions are accurate and Gold does find a solid bottom near $1700, then we would want to watch for an upward price trend to start to setup near March 15th or so, attempting to push Gold prices above $1850 to $1900.  If that happens, then the next phase of the ADL price predictions would become even more relevant.  That means the upward price trend would attempt to target the $2050 level, then the $2300 level before June or July 2021.Our ADL predictive modeling system accurately called the rally in gold in 2019 and has delivered some incredible predictive analysis over the past few months.  You can read some of our earlier ADL predictions here:November 22, 2020: ADAPTING DYNAMIC LEARNING SHOWS POSSIBLE UPSIDE PRICE RALLY IN GOLD & SILVERAugust 4, 2020: REVISITING OUR SILVER AND GOLD PREDICTIONS – GET READY FOR HIGHER PRICESMarch 28, 2019: PRECIOUS METALS SETUP FINAL BUYING OPPORTUNITYMiner ETFs May See Big GainsIn terms of sector ETF trends, a stronger upside move in Gold would likely prompt Miner ETFs to also move dramatically higher over the next 30 to 60+ days.  This GDXJ Weekly chart highlights a Fibonacci 100% measured move higher which suggests the $73.91 and $91.71 levels could become our next upside targets. Additionally, one has to consider the process that would likely prompt Gold to move higher throughout this span of time.  A continued commodity rally could prompt some of this move to happen, but fear would also have to be factored into this move if Gold were to rally above $2300 as the ADL system predicts.  Any renewed fear would likely come from global financial or credit market concerns or be related to hyper-inflation concerns.  We'll have to see how things progress throughout the rest of 2021 to really get a better feel for what may be driving this upward price trend.We suggest traders pay very close attention to what happens in Gold over the next 2 to 4+ weeks.  If our ADL predictions are accurate, we could see some really big moves in the global markets, various sectors and metals/miners very quickly. If the markets start to roll over and volatility rises, we can benefit from it with our Options Trading Signals which we use non-direction trades to sell premiums. This allows options traders to profit from volatility and not worry about which way the market moves.Don’t miss the opportunities in the broad market sectors in 2021, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.
Treasury Yields Rally May Trigger A Crazy Ivan Event (Again) In The Market

Treasury Yields Rally May Trigger A Crazy Ivan Event (Again) In The Market

Chris Vermeulen Chris Vermeulen 01.03.2021 20:05
Since shortly after the US November elections, my research team and I have been clear about our research and our belief that the bullish rally in the markets would continue to drive the strongest sectors higher and higher.  In December 2020, we shared an article suggesting our proprietary Fibonacci Price Amplitude Arcs and GANN theory indicated a major price peak could set up in early April 2021.  On February 3, 2021, we also published an early warning that Treasure Yields were set up to prompt a big topping pattern sometime over the next 6+ months .  We followed that up with a February 21, 2021 article suggesting future Gold and Silver price trends may be tied to the moves in Treasury Yields and the resulting stock market trends.Now that the Treasury Yields have completed what we suggested would be required to start a “revaluation event” in the stock market, we believe that a “Crazy Ivan” event may soon setup in the global markets.  Many months back (August 28, 2019), we published an article about precious metals were about to pull a Crazy Ivan price event (https://www.thetechnicaltraders.com/precious-metals-crazy-ivan-followup/). This prediction came true in 2020 and 2021.  Now, we are suggesting the global markets may pull a new type of Crazy Ivan event – a price revaluation event prompted by the rise in Treasury Yields.The Yields SetupIn our February 3, 2021, research article about the Treasury Yields, we suggested that a series of setup processes take place that prompt a broad market correction related to Treasury Yields.  First, Yields must fall from levels above the Breakdown Threshold to levels below the Setup Threshold to complete the first stage of the setup.  This first stage sets up the potential for moderate sideways price trends nearing a peak, or congestion.  The second stage of this setup is that Yields must fall to levels below ZERO.  This move creates the potential for one of two outcomes when Yields begin to rally.If Yields rally back above the Setup Threshold and/or the Breakdown Threshold, but then stall and reverse back below the Breakdown Threshold, then the markets will likely stall/congest or enter a sideways/rolling top type of trend for a period of 2 to 6+ months. If Yields rally back above both the Setup Threshold and the Breakdown Threshold and continue to rally higher, then the markets begin to start a sideways/correction event which we are calling a Crazy Ivan event.We have highlighted all the areas in the charts below where the Yields have fallen to levels below ZERO on this chart and you can clearly see how the SPX reacted to these upside Yields recovery events.  Every time (in RED) where the Yields rallied above the Setup and Breakdown Threshold levels, a broad market downtrend setup within 6 to 12+ months of this event.  We believe the markets are about to do the same type of thing and we are calling it a Crazy Ivan event because we believe the current market setup is vastly different than the previous setups.If the markets start to roll over and volatility continues to stay higher or rise, we can benefit from it with our Options Trading Signals which we use non-direction trades to sell premiums. This allows options traders to profit from volatility and not worry about which way the market moves.The current Crazy Ivan setupThe following current Yields chart shows a more detailed example of what is currently taking place related to the Crazy Ivan setup.  Yields are back above the 1.35 level on this chart and have quickly rallied above the Setup and Breakdown Threshold levels.  If Yields continue to rally from this level, we believe the markets will quickly shift into a sideways/rolling top formation which will eventually prompt a new Crazy Ivan price event (a big revaluation event).  If yields stall near these current levels and move back below the Breakdown Threshold, then we may still see a bit of sideways trading for a while, but usually the markets will begin to resume an upward price trend if Yields stay below the Breakdown Threshold.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The outcome hinges on what Yields do in the next 4 to 12+ months and we believe traders and investors need to prepare for big shifting trends in major sectors and indexes going forward.  The setup process is already complete at this point.  We are not waiting for anything to further complete this potential for the Crazy Ivan event.  We are just watching Yields to see if they continue higher or stall and move back below the Breakdown Threshold.  At this point, the Crazy Ivan price revaluation event is almost a certainty – it is just a matter of time.What we expect to see is not the same type of market trend that we have experienced over the past 8+ years – this is a completely different set of market dynamics. Don’t miss the opportunities in the broad market sectors in 2021, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.In the second part of this article we will publish later this week, we will review and share more data and details related to the rising Yields and the pressures that will likely be placed on the global markets.  You don't want to miss the conclusions of our research.
Bonds And Stimulus Are Driving Big Sector Trends And Shifting Capital

Bonds And Stimulus Are Driving Big Sector Trends And Shifting Capital

Chris Vermeulen Chris Vermeulen 25.02.2021 03:36
Falling Bonds and rising yields are creating a condition in the global markets where capital is shifting away from Technology, Communication Services and Discretionary stocks have suddenly fallen out of favor, and Financials, Energy, Real Estate, and Metals/Miners are gaining strength.  The rise in yields presents an opportunity for Banks and Lenders to profit from increased yield rates. In addition, historically low interest rates have pushed the Real Estate sector, including commodities towards new highs.  We also note Miners and Metals have shown strong support recently as the US Dollar and Bonds continue to collapse.  The way the markets are shifting right now is suggesting that we may be close to a technology peak, similar to the DOT COM peak, where capital rushes away from recently high-flying technology firms into other sectors (such as Banks, Financials, Real Estate, and Energy).The deep dive in Bonds and the US Dollar aligns with the research we conducted near the end of 2020, which suggested a market peak may set up in late February. We also suggested the markets may continue to trade in a sideways (rounded top) type of structure until late March or early April 2021.  Our tools and research help us to make these predictions nearly 4 to 5+ months before the markets attempt to make these moves.  You can read this research here:2021 MAY BE A GOOD YEAR FOR THE CANNABIS/MARIJUANA SECTORPRICE AMPLITUDE ARCS/GANN SUGGEST A MAJOR PEAK IN EARLY APRIL 2021 – PART IIWHAT TO EXPECT IN 2021 PART II – GOLD, SILVER, AND SPYIf our research is correct, we may have started a “capital shift” process in mid-February where declining Bonds, rising yields and the declining US Dollar push traders to re-evaluate continued profit potential in the hottest sectors over the past 6 to 12+ months.  This would mean that Technology, Healthcare, Comm Services and Discretionary sectors may suddenly find themselves on the “not so hot” list soon.Bonds Collapsing While Yields Continue To RiseThe following TLT Weekly chart highlights the extended downward trend taking place in Treasury Bonds.  This downside pricing pressure would usually support a rising stock market and moderately weaker precious metals.  But given the way the US Dollar is also declining, we are seeing fear become more of an issue as the high-flying stock market starts to look quite a bit over valued.  Rising yields also puts Financials and banking/lending near the top of the list for future profit potential.US Dollar Struggling To Find SupportThe Invesco US Dollar ETF, (UUP) Weekly below chart shows how weak the US Dollar has been after the COVID-19 price rotation.  The continued decline in price levels after May 2020 is a very clear indication that the US Dollar is reacting to the continued stimulus efforts as well as the decreased economic expectations.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Combined, the Bonds and US Dollar decline are raising the fear-factor among global investors and causing many to rethink where future growth and profits will originate.  Many are landing on the Financial and Energy sectors right now.Financial Sector Begins To Skyrocket HigherThe following Direxion Financial Bull 3x ETF (FAS) Weekly chart shows the incredible advance in the Financial Sector over the past 6+ months.  Almost like a sleepy rally, Financials have been rallying while traders have been focused on Technology, Healthcare and other sectors that seemed hot.  This shifting trend in sectors, and the associated shifting capital, suggests we may be nearing a tidal shift in sector trends – moving away from Technology and into Financials, Energy, Real Estate, and others.Volatility is still 2x to 3x what we have seen 4 to 5+ years ago.  This suggests any breakdown in trends could prompt a very volatile price correction/transition.  As sectors continue to shift, we urge traders to pay attention to the risks in the markets related to this elevated volatility which seems to be present in every sector. We believe we may be starting an extended “capital shift” process which may last well into March/April 2021 before real opportunities setup possibly in May or June.  The markets will do what they always do, react to traders, capital, and global central bank influence.  There are times when certain sectors enter a euphoric phase and there are times when the global markets revalue risk.  We may be nearing an end to a euphoric phase and starting a revaluation phase. This means many various sectors and symbols will present some very real opportunities for profits over the next few weeks and months.  Marijuana, Cryptos, Metals, Miners, Financials & Real Estate appear to be leading opportunities related to sector trends.  If these trends continue throughout 2021, we may see a revaluation/capital shift to propel these trends higher.Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Have a great rest of the week!
What Is The Next Move For Silver/Gold?  Follow Treasuries and Commodities Trends To Find Out

What Is The Next Move For Silver/Gold? Follow Treasuries and Commodities Trends To Find Out

Chris Vermeulen Chris Vermeulen 21.02.2021 13:56
Gold continues to wallow near its recent low price level, near $1765.  Silver has continued to trend moderately higher – but still has not broken out to the upside.  Many analysts have continued to estimate when and how metals will begin the next wave higher.  My research team and I believe we've found some answers to these questions and want to share our research.Silver Explodes In Late-Stage Excess RalliesThe first thing we want to highlight is that Silver tends to rally excessively in the later stages of any precious metals rally.  For example, in mid-2010, Silver began an incredible upside price rally after Gold rallied from $720 (October 2008) to $1265 (June 2010).  This suggests that the price relationship between Gold and Silver “dislocated” in the early stage breakdown of the financial markets near the peak of the 2008-09 Housing Crisis Peak.  Then, in late 2010, Silver began to move dramatically higher while Gold continued to push an additional 80%+ higher.The Silver rally in 2010~11 is clearly evident on this Silver/Gold Weekly chart, below.  The lack of any Silver price advance compared to Gold prior to the 2010 rally is also evident.  One interesting fact relating to how Silver reacted to the 2008~09 Housing Crisis is the deep collapse we see on the left edge of this chart.  A similar collapse happened just recently as COVID-19 shocked the global markets in 2020. One key aspect we found very interesting is how Silver recovered moderately slowly in 2009~10 before launching into an incredible breakout rally in late 2010 – nearly 15 months after the bottom.  Currently, after the COVID-19 bottom, Silver has rallied a bit more aggressively and quickly.  While Gold has languished below $1800 recently, Silver has continued to gain value compared to Gold.  This new dynamic may suggest the current setup in Precious Metals is transitioning into the late-stage excess rally much quicker than in 2009-10.Treasury Yields Drive Explosive Trends In SilverHow do Treasury Yields relate to price action in Silver?  The first thing we need to understand is that Silver can rally while Yields are rising or falling.  What happens when Yields rise over long periods of time is that Silver will tend to attempt to find support while trending moderately higher.  Eventually, if fear subsides in the global markets, Silver may fall in price in the later stages of rising Yields.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!As you can see on the Treasury Yield to Silver chart below, Yields collapse in 2008 & 2009, as the Housing Crisis unloaded on the global markets.  Yields also collapsed in 2020 as COVID-19 shocked the global markets.  In 2009-10, interest rates collapsed and Yields collapsed until late 2013.  Silver continued to form a base in 2015~16 as Yields rose and peaked.  Near the peak in Yields in 2018, Silver continued to attempt to establish a bottom.What we find interesting related to this chart is the steep collapse in Yields after the 2018 peak and the recent rally in both Yields and Silver.  We believe Yields may stall and begin to move lower – resulting in another rally attempt in Silver and Gold.  We believe the recent rally in Yields is a reaction to the deep lows related to COVID-19 and that Silver is representing a price pattern similar to 2008-09 – a deep low, followed by a moderately strong price recovery.  Yields could stay low for much longer than many people expect if our research are correct.If Yields continue to stay near or below current levels, the lowest ever experienced in recent history, then Silver should begin another rally attempt very quickly – possibly within just a few weeks.  The question becomes, what would prompt Yields to fall quickly from current levels?  Could some type of global credit or financial crisis be brewing again?Commodities & Metals AlignLast but not least, we want to highlight the correlation between commodities and Silver/metals.  When commodities prices rise, in general, Silver rises as well.  The Monthly Commodity & Silver chart, below, highlights the rally in Commodities in 2010~2011 as well as the incredible rally in Silver that took place at the same time.  Now, focus on the hard right edge of this chart and pay attention to the rally in Commodities and Silver that has taken place over the past 12+ months.  What is brewing is that Commodities are rallying from a deep bottom that has taken over 9 years to complete.  The continued decline in commodities since 2011 has prompted a very strong price recovery attempt after the COVID-19 deep lows.  Silver has reacted to this rally in Commodities, like it usually does, to prompt a fairly strong upside price trend.Recently, though, Silver has stalled while Commodities prices have rallied.  This suggests that Silver is congesting in a new momentum base and should begin an explosive upside price rally – comparable to the rally we are seeing in Commodities.  Commodities have rallied near 20% over the past 12 weeks while Silver has nearly the same amount over the same span of time.  From the COVID-19 lows, the Commodity Index rallied nearly 22% while Silver rallied more than 127%.  If Silver were to maintain this ratio, the 20% rally in Commodities should prompt a 110% rally attempt in Silver.Given our research related to how Silver has moved compared to Gold, Treasuries, and Commodities, we believe Silver is basing and building momentum for a big breakout rally.  We believe the upside move in Yields has put pressure on Silver and Gold recently to stall/consolidate.  We believe Commodities are building strong upside price momentum which should push Gold and Silver higher.  As the Commodity rally continues while Gold and Silver stall, an incredible amount of upside price momentum builds up over time.  When it breaks, it could be very explosive.A change of direction in Yields could prompt Silver and Gold to resume a strong upside price trend. Either way, as long as Commodities continue to rally and Yields begin to stall or more sideways, Gold and Silver are poised to attempt another advancing leg higher.Our research team believes Gold and Silver are poised to make another big price advance.  We wish we could tell you exactly when it will happen – but we can't.  Our estimate is that within the next 2 to 4 weeks, continued pressures will likely push both Gold and Silver into an upside breakout price trend.  We believe the amount of rally pressure that is building in Gold and Silver is immense.  Time will tell if we are correct or not.Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Stay safe and warm!
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon?

Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon?

Chris Vermeulen Chris Vermeulen 17.02.2021 20:44
There has been quite a bit of chatter related to precious metals lately.  The rally in Cryptos, particularly Bitcoin, and various other stocks have raised expectations that Gold and Silver have been overlooked as a true hedging instrument. As these rallies continue in various other stocks and sectors, Gold and Silver have continued to trade sideways over the past 6+ months – when and how will it end?GOLD SUPPORT NEAR $1765 MAY BECOME A NEW LAUNCHPADMy research team and I believe the recent downside trend in Gold has reached a support level, near $1765, that will act as a launching pad for a potentially big upside price trend. This support level aligns with previous price highs (May 2020 through June 2020) after the Covid-19 price collapse, which we believe is an indication of a strong support level.  As you can see from the Gold Futures Weekly chart below, if Gold price levels hold above $1765 then we feel the next upside rally in metals could prompt a move targeting $2160, then $2400.The February 2021 Gold contract expires on February 24 – only a few days away.  The CME Delivery Report shows an incredible amount of contracts already giving notice of a “Delivery Request”. This suggests that on or near February 25, a supply squeeze for Gold and Silver may become a very real component of price.For example, there are 32,831 contracts requesting delivery for February 2021 COMEX 100 Gold Futures as of February 16, 2021. That reflects a total delivery obligation of 3,283,100 ounces of Gold. The Silver contract deliveries are similar in size.  As of February 16, 2021, here are 1,865 February 2021 COMEX 5000 Silver contracts requesting delivery. That translates into over 9,325,000 ounces of Silver.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!We still have another five trading days to go before the February contract expires.  How many more futures contract holders will pile into the Delivery Que at COMEX and how will this translate into any potential price advance or decline?SILVER TRENDS HIGHER – ALREADY SHOWING STRONG DEMANDSilver has already begun to move higher while Gold continues to wallow near recent lows.  Our research team believes the next few days of trading in Gold and Silver could become very volatile as global traders suddenly realize the demand for Deliveries may squeeze prices much higher.  Traders should stay keenly aware of this dynamic in the Precious Metals markets as we may continue to see futures contract delivery requests out-pace supply as Precious Metals prices continues to move higher.The 100% Fibonacci measured move technique we are showing on these charts helps us to understand where and how upside price targets become relevant.  If support on these charts hold and the February 24, 2021 futures contracts expire with strong demand for physical deliveries, then we believe an upside price squeeze may setup fairly quickly (over the next 5 to 15+ days) in both Gold and Silver.We need to watch how Gold reacts near this support level and to pay attention to the delivery data from COMEX.  If these levels continue to increase over the next few days, before the February 24 expiration date, then we need to consider how and when the price will start to reflect this strong demand.  Currently, Gold price activity does not properly reflect what is happening in Silver and Platinum related to the demand for metals.  We believe, over the next 30 to 60+ days, this will change as Gold may enter a new bullish price phase – targeting $2400.  At this point, we believe the answer to this question will become known by February 25th or so.Precious Metals, Miners, Rare Earths, and Junior Miners may set up some really interesting opportunities for traders.  The entire Metals/Miners sector has been under moderate pressure recently and we believe that trend may be ending soon. 2021 is going to be full of these types of trend rotations and new market setups.   Staying ahead of these sector trends is going to be key to developing continued success in these markets.  As some sectors fail, others will begin to trend higher.  Learn how BAN strategy can help you spot the best trade setups. You can learn how to find and trade the hottest sectors right now in my FREE one-hour BAN tutorial. Don’t miss the opportunities in the broad market sectors over the next 6+ months. For those who believe in the power of relative strength, cycles and momentum then the BAN Trader Pro newsletter service does all the work for you in determining what to buy, when to buy it, and how to take profits while minimizing downside risk. In addition, you will be kept fully informed of the market with my short pre-market report delivered to you every morning along with the BAN Hotlist for those looking for more trades.Happy trading!
Three More Reasons We Love To Trade Options!

Three More Reasons We Love To Trade Options!

Chris Vermeulen Chris Vermeulen 16.02.2021 19:53
A couple of days ago Neil, my options trading specialist and I posted an article how you can benefit and profit by trading some very easy to implement strategies we teach. If you missed the first half of this article entitled "5 Reasons Why People Prefer To Trade Options Over Stocks" then click on the title to revisit it.  In this final part, back to finish off telling you why I love to trade options and will walk through how adjustments and risk management of options can help give you better control of your trades and profits. Hopefully everyone enjoys the information and we look forward to helping everyone win with options trading!REDUCE RISKEveryone has heard a story about someone who mischaracterized or misunderstood their options trade, then having their account blow up when the underlying stock goes the wrong way. This happened recently with a Robinhood trader who woke up one morning to see his account at -$730,165. In this tragic event the kid took his life because he thought he had lost $730,165 and couldn't reach his brokerage to understand his account. We learned later that the negative balance did not represent uncollateralized indebtedness at all, but rather his temporary balance until the stocks underlying his assigned options actually settled into his account.  In short it was a delay in processing of the options contracts in his account, and not the actual trade that went awry.  This is why it is very important that in this game of trading you get the proper training so you understand your risk. The risk is real. So how can options be less risky? Simple: because you can define your risk right at the outset of the trade. Further, you can adjust your risk/reward ratio 24/7, and not just during market hours with a stop loss like stocks. In very volatile markets risk management becomes even more important and your exposure to unlimited risk can destroy your account very quickly. Think back to the tech bubble in 2002, or the subprime mortgage crisis, and don't forget the consequneces of the great recession.  Or even the Covid-19 pandemic of 2020!  The most successful traders are good at maximizing their winners, but more importantly, they are even better at minimizing their losses on losing trades. This includes making sure you prepare for black swan events. One of the questions I always get is how do you control and/or manage your risk with options?  In the following diagram, you can see that if you use options around your existing positions you can cap your max loss at about $7.  To achieve this, the trade-off is to cap your upside at about $13.  In this scenario, we own stock the orange line represents this. Let’s assume the price is $110 so the profit is about $3.  We sell a call to pay for a put that we buy.  So the max profit in the line created by selling the call and the max loss is defined by the buying of the put.  This is called collaring your stock position using stock options.  As I mentioned this trade is on 24/7 and not just during market hours like a stop for stocks.FLEXIBILITY TO REACT TO MARKET VOLATILITYYou don’t need to always be right on direction. With options, you can put on a position and adjust and move with the market minimizing your losses or turning a losing trade into a winning trade. You can sell premium with options and make money even when the underline stock goes nowhere. You get paid for the time by selling the rights to the stock that you can either own or not own. With stocks it is more limiting, you can either buy more or sell and take your loss if the price goes against you, that’s it.Sign up now to receive information on the launch of the Technical Traders’ options trading courses and newsletter!If you are trading options you have way more flexibility than stock.  With stock you can buy, sell short and buy more.  I hate adding to a losing position and quite frankly not sure why anyone would do that.  With options you can roll out of a leg in your option spread and adjust to where the market is going.  Think of this as steering a boat through a series of rocks rather than just running them over and damaging the ship.  You control where you want to go and avoid the disasters.  You can also turn losing positions into winning ones by adjusting.  With my new Options Trading Signals newsletter ("OTS") we will go through these steps and show how you can create winning positions or minimize your losses in ways that is simply not possible with stocks.CONSISTENT RETURNS WITH less severe DRAWDOWNSConsistent returns and less dramatic drawdowns can be achieved with an options strategy rather than a just buying stock strategy. I usually only allocate 50% or less of my overall account into options positions yet achieve better returns than if I were to invest 100% into stocks. I also don’t have nearly the same levels of drawdowns, or the sudden trend reversal risk, that one would take by being 100% in stocks. Holding cash also allows me to capitalize on opportunities like if a black swan event. When such an event does eventually hit, I have cash available to buy in while all stocks are on sale. So, I can still get a better return, with fewer drawdowns, and with cash to be ready to jump on buying opportunities. One can get all of the best of all worlds!I am really excited about sharing my knowledge and strategies with you. I will be writing another article this week that walks you through my simple strategy to consistently generate profits from the market. I will be walking through a few trades with you so make sure you don’t miss out.Selling options is the best way to get consistent returns that are undeniable and consistent.  Nothing in the market is guaranteed except the premium you sell on an options contract.  The best part about selling premium is the stock can go against you, with you, or do nothing and you can profit on any of those scenarios.  Today's current market conditions are RIPE for selling premium since there are many new options traders piling into the market, buying options, and inflating the premium on options.  This is a supply and demand game and because the demand is high and the supply is low this is creating a premium price skew to the upside.  This is clearly an edge we can take advantage of but in order to do so, you must understand how the market works and more importantly how options work.  My new OTS service will detail our weekly trades and walk you through how to take advantage of this edge.  To further my point that options can simply provide better returns, let us look at the below Silver chart to see why buy and hold is a tough game to play. If you entered Silver in August 2020 at roughly $25, then you would have zero gains 7 months later if you had bought the stock. However had you sold a Put Option at $24 for 7 months it would have expired worthless and paid you the entire premium that you sold it for.  Currently, an option contract 7 months out on Silver is trading at $296 at the time of this article being written, so, this trade would have netted a $256 gain even though the underlying SLV stock went absolutely nowhere. If you want to learn more about options, then join me in March when I will start teaching basic options trading, as well as offering courses on more advanced strategies. Anyone can learn how options work but the most important thing is what strategy you use.  You also need to know how and when to use the right strategy.  I love teaching people how to trade options and live by two principles when doing so: “Trading can be simple but it is not easy” and “I want EVERYONE to win not just me and in fact, I have no desire to win if everyone else loses.”. I am really excited to get to know some of you soon when I launch my LIVE options courses and get you on the path to winning trades!I will also be running The Technical Traders’ new service – Options Trading Signals – where I will share my knowledge, model portfolio, a weekly trade, and opportunities report, and trade alerts with subscribers. Look for the launch of my newsletter and courses at the end of February! Make sure you sign up to keep informed of the launch of my newsletter and courses. You can sign up now at www.thetechnicaltraders.com/options-trading.All our best,Chris Vermeulenand Neil Szczepanskiwww.TheTechnicalTraders.com
Cannabis, Alternative Agra, Mushrooms, and Cryptos – Everything ALT is HOT

Cannabis, Alternative Agra, Mushrooms, and Cryptos – Everything ALT is HOT

Chris Vermeulen Chris Vermeulen 14.02.2021 20:20
The recent rally in Marijuana and Alternative Pharma/Agriculture stocks has been impressive, to say the least.  One thing we have to remember about this sector is that it rallied to highs in 2018 and 2019, then fell out of favor for many months.  The anticipation of this new sector emerging within the US, and across many areas of the globe, prompted quite a bit of excitement after 2016 when many US states voted to legalize Marijuana. Even before this date, the alternative medicine and consumer product use related to Marijuana has been heavily speculated on by investors/traders.If we were to consider the out-of-favor phase of this sector over the past 15+ months, after the rally/hype phase which took place in 2017 and early 2018, we've seen many cannabis stocks collapse 70% to 85% or more recently.  This downward price trend likely set up a number of incredible opportunities based on expanded marketplace opportunities, enterprise valuations, and longer-term consumer/pharmaceutical use applications for CBD and other chemical extracts.  Additionally, we need to also consider what would happen if a consolidation phase were to take place in this industry – how would cannabis leaders play a role in acquiring smaller, yet important, firms with innovative technology/solutions.The MJ Alternative Harvest ETF Weekly chart below highlights the incredible decline in the cannabis sector after the August 2018 peak. MJ fell from a high of $45.40 to a low of $9.34 – representing a -86% decline.  Aurora Cannabis (ACB) peaked at 150.34 in October 2018 and recently bottomed near $3.71 – representing a massive -97.5% decline.Over the past two months or longer, this sector has started to heat up again with a moderately strong rally setting up.  Over the past 14+ days, a big upside rally initiated pushing price levels upward by +80% to +150% or more from recent lows.  Historically, when one considers the longer-term potential for growth, revenues and consolidation within this industry sector, we believe this rally may be just starting.If we were to consider a potential continued focus on the Cannabis/Alternative Agriculture supply and industry sector over the next 4+ years, we would have to take a look at the deep decline in price levels recently and the opportunity for some type of industry consolidation over the next 5 to 10+ years.  Obviously, this industry/sector is here to stay, and, much like the Alcoholic Beverage industry in the 1960s to early 2000s, we are in a very early stage of the legalization, expansion, and consolidation phase of this sector.Using these two sectors for comparison, the first question is just how big is the Cannabis/Alt marketplace compared to similar types of markets?  The Cannabis sector currently makes up about 1/10th of the total US Alcoholic beverage annual sales ($25.3B Cannabis: $252.82B Alcohol - https://www.statista.com/topics/1709/alcoholic-beverages/).  From a conservative standpoint, Cannabis consumers very likely cross-over into the Alcoholic beverage consumer market on a fairly high basis.  This means the consumer market for Cannabis is very likely 60% to 75%, or more, of the Alcoholic-beverage market.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The second question should be what additional advantages does the Cannabis/Alt sector have that differentiate it from the Alcoholic-beverage industry?  That answer lies in an unknown factor – the pharmaceutical/consumer product use that is currently in its infancy.  CBD has already shown great promise, but the long-term capabilities, use, and application of various alternative chemical compounds found in various strains of plants, mushrooms, and other organic sources are still part of the “X-Factor”.The third question in our minds becomes, how long before these unknowns/X-Factor components become a reality?  We can't attempt to put the answer into dates or predictions, but we do believe the speed at which these organic compounds will be introduced and mapped-out into potential medical-use solutions has been clearly illustrated by the speed at which the COVID-19 vaccines/medical advancements have been delivered.  These solutions only took “months” to come to market.  If the same type of capabilities were applied to the Cannabis/Alternative marketplace, and thus toward the multiple supply/innovation companies within this sector, a massive boost of growth, innovation, and consolidation within this sector over time. Let's take a look at some current statistics & data below.Marijuana Tax Revenues by state appear to be strong and growing.  One thing to consider about this Tax data is that a relatively large portion of actual sales are still going unreported (as illicit transactions).Source: https://loudcloudhealth.com/resources/marijuana-tax-revenue-by-state-map/Legalization & Acceptance of Marijuana within the US has now reached almost every state – with only six states still showing Marijuana is fully illegal.  All other states have adopted Marijuana use in some form over the past 5+ years.Source: https://disa.com/map-of-marijuana-legality-by-stateThe US Cannabis Consumer Market is expected to increase by more than 15 to 20% in 2021 after more than doubling in 2020.  From 2018 to 2021, the total consumer market was expected to increase by more than 350%.  By the end of 2022, that ratio increases to levels beyond +450% compared to the 2018 levels.Source: https://mattermark.com/vc-investment-sparks-high-times-american-cannabis-industry/Obviously, the deep price decline in the Marijuana sector, which recently ended, did not properly reflect the market capabilities and expectations for future growth and earnings.  We believe this sector could become one of the hottest sectors for growth over the next 2+ years and it may prompt a massive consolidation phase within this industry which will create potential behemoth conglomerate Cannabis firms – very much like the Alcoholic Beverage industry.I am able to find these trends, like MJ, by using my Best Asset Now strategy. My subscribers and I are loving the strategy as we closed our MJ trade last week after taking profits at the 7,%, 15%, 20%, and 48% levels in two weeks! This is how we make consistent profits from the BAN strategy while still getting that awesome, excitable feeling from being in an explosive trade!!Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.In the second part of this article, we'll explore various Marijuana sector charts showing where traders may find real opportunities for profits if the current rally phase continues.  This exciting industry sector may become one of the hottest sectors for traders and may prompt a massive consolidation phase within this industry over the next 5+ years.  Get ready for some big trends and opportunities.
5 reasons why people prefer to trade options over stocks

5 reasons why people prefer to trade options over stocks

Chris Vermeulen Chris Vermeulen 13.02.2021 21:13
As technical traders, we know the importance of following the price charts using proven trading strategies and implementing risk and position management. Here at TheTechnicalTraders.com we are stepping things up a notch by adding options to our trading.By using options, a trader can leverage, hedge positions, and generate income via selling premiums. There are basic options, strategies, and complex, and everything in between. Because of that, I have brought options trading specialist Neil Szczepanski to join our team.I will let Neil introduce himself.Hi everyone!  Neil Szczepanski here.  In case you are wondering it is pronounced “Sus’ pan ski".  Yes, I have roots in eastern European ancestry and I’m first generation.  I love options and have been trading them for many, many years. I like options because you have more ways to be profitable in your trading.  I hate putting on a position and then waiting for the market to go your way.  I want to be in control of my trades and options allows for that.  Also, trading can equal freedom. Think about this: imagine having a job that you can do from anywhere on the planet, work as much as you want, and make as much money as you want?  Imagine having that same job that has no boss breathing down your neck and you call the shots. Well, that is what options trading can be like if you have the skills or access to someone who tells you what and when to buy and sell options contracts.You control your own destiny and I have seen traders start with as little as $500.  Options are especially attractive because they can cater to the small guy with smaller accounts via leverage, allowing them to take on big positions with little capital. On the flip side, the more wealthy sophisticated traders use options to protect and hedge positions and can do more complex strategies that provide even more consistent and lucrative returns with lower risk.No matter what category of options trading you fall into, they work incredibly well, and I will teach you while providing professional trades to execute. Over my next few posts, I am going to explain some more about why trading options can be consistently profitable without having to take on huge risks. Today I am going to talk about why I love swing-trading options and the power of leverage that options provide us traders.MAKE BIG MONEY WITH SMALL ACCOUNTSAs I alluded to above, options give the average trader ways to break into the trading world because of leverage. A little capital can go a long way, and if options trading is done properly you can have significantly less risk than buying the stock outright. You can start small, make smart bets that generate returns, and continue building your account through sound risk management techniques like position sizing, etc.For example, when an underlying stock is super expensive, like Telsa for example, it can be prohibitive for the average person just starting out trading to own that stock… let alone 100 shares! Options give you the ability to control those shares for a specific period of time at a fraction of the price. Each individual options contract lets you control 100 shares of Tesla without having to buy the stock.Sign up now to receive information on the launch of the Technical Traders' options trading courses and newsletter!Let us take a look at a simple example where you want to buy TELSA with an expectation that it will go up at least 5% in value in the next month. If you wanted to buy and hold 100 shares of TESLA, then you would need to spend $80,482 to own those shares. Since all we want to do is to be able to sell the shares and lock in the profit when they go up by 5% or more.   We don’t need to own them but rather just have the right to control them within the options contract timeframe. When we hit our targets, we can sell the option contract and take profit (or take possession/delivery of the underlying shares on contract expiry).  This is called option assignment.Below is a sample of a Tesla options chain, where we can see that the price of the stock is $804.82.  Let’s say you could allocate $2,000 to this trade - you would be able to buy almost 2.5 shares of TSLA. But with $2,000, you could buy an option contract at the money that would let you have the right to buy 100 TSLA shares anytime in the next 30 days at a price of $800/share. With options, you have the ability to take your $2,000 trade and have the same controlling interest in an underlying stock as the person that just spent over $80,000 to buy the stock.So to continue with the TSLA example, let’s say on March 12th TSLA was trading for $844 (the 5% gain you were expecting).  If you bought and sold the stock, you would have made a 5% return of $4,000. If you had bought the option, and then take on the assignment (let it expire) you would have the right to buy 100 TSLA shares at $800 and then turn around and sell them for $844.  Your profit would be $4,400 (less the cost of the option contract), a little more profit than had you bought the shares outright. However, if you look at your return it is more than 225% using options!!! Options enable the small players to trade stocks that would normally be outside of their price range, and this is one of the reasons we have seen an increase in options trading popularity over the last year. In fact, options trading volume has more than doubled since the start of the pandemic.Of course, the above trade is a dream, but the reality can be quite scary. If you took the options trade and TSLA dropped below $800, then your liability starts mounting, however, the loss with owning the stock could be over $80,000 while the total loss with buying the options would be the price you paid for the option which is $1,950.  A big reversal of the stock would be catastrophic in both cases but can be much worse for the stock owner.  So it is important to make sure you trade with proper risk management and protections in place. While the adage “with great power there comes great responsibility” was popularized within a different context, I feel it applies to trading options.I know at this point you are probably thinking what the heck is he talking about and options are WAY too complicated for me.  Don’t worry, I’m going to teach and show you in a very simple and easy way how to trade options.  I am also going to provide trades that limit the max loss per trade, and reduce risk so get ready for some excitement!SWING TRADING OPTIONS IS THE PERFECT SIDE-HUSTLEI love teaching, technology, and trading. I knew early on that these were the things that would drive my career path. At the same time, I had kids to feed so I needed to supplement my income to support my growing family. I was able to achieve this through swing trading options. This allowed me to focus on my career and family while making modest yet consistent income, without having to be glued to my screen every day since swing trades last a few days or weeks.We have all seen the traders with 10 monitors looking at charts all day, making trades, and watching and waiting on every single turn in the market.  I can tell you this is NOT my idea of trading.  I prefer swing trading, where I can set up trades to enter and exit every couple of days or even weeks.  Swing trades are meant to be short duration, and they are not intra-day, so you can set up your trades and manage them when you have time to yourself.I once got advice from a great old friend that sometimes it is wise to look at the animal kingdom to learn how we can improve and live our lives.  There is a lot we can learn from the animal kingdom.  Some of the necessities we need as a human being is food shelter, social acceptance, and security.  As such, we should always have back up plans. Going back to the animal kingdom, if we look at say prairie dogs, for example, we know that they always have two holes.  One is for the main entry and exit and the other is for emergency exits.  Side hustles are just that and swing trading can be a really useful back-up/extra income plan.  It is your second hole!Swing trading is also a great way to gain entry into the world of trading.  It is like dipping your toe in the water to test it before you jump in head first.  With swing trading, you can learn all about options and other financial instruments like futures, CFD, and currencies. The best part about swing trading is it can eventually turn into a full-time job, replacing your regular job.  Now, instead of trading during your free time, you can trade when you don’t have to be at work, leaving you with even more time to enjoy life and family. This is the ultimate freedom.  That is what I have done using several strategies that generate consistent, low-risk gains for 20+ years. One of my favorite strategies that I have developed is called the C-LEAP strategy.  In this strategy, you enter and exit positions once every two weeks.  It is one of the least risky strategies I have ever developed, and I use a simple checklist to follow it. I have had past students generate tens of thousands of dollars every month using this strategy, and I have found it to be easy to learn and very consistent.As you may or may not know, I am preparing some options courses where I will teach basic options trading as well as more advanced strategies. Anyone can learn how options work but the most important thing is what strategy you use.  You also need to know how and when to use the right strategy.  I love teaching people how to trade options and live by two principles when doing so: “Trading can be simple but it is not easy” and "I want EVERYONE to win not just me and in fact, I have no desire to win if everyone else loses.". I am really excited to get to know some of you soon when I launch my LIVE options courses and get you on the path to winning trades!I will also be running The Technical Traders' new service – Options Trading Signals – where I will share my knowledge, model portfolio, a weekly trade, and opportunities report, and trade alerts with subscribers. Look for the launch of my newsletter and courses at the end of February! Make sure you sign up now to keep informed of the launch of my newsletter and courses. You can sign up at www.thetechnicaltraders.com/options-trading.In the next article Neil will keep giving you reasons to love trading options, including how you can trade options with less risk than stocks, how you can better react to volatility with options compared to stocks, and how you can attain consistent profits with lower drawdowns by trading options. So come along with me for the ride and change your life with a new skill trading options!All my best,
Platinum Begins Big Breakout Rally

Platinum Begins Big Breakout Rally

Chris Vermeulen Chris Vermeulen 10.02.2021 21:58
If you were not paying attention, Platinum began to rally much higher over the past 3+ days – initiating a new breakout rally and pushing well above the $1250 level.  What you may not have noticed with this breakout move is that commodities are hot – and inflation is starting to heat up.  What does that mean for investors/traders?DAILY PLATINUM CHART SHOWS CLEAR BREAKOUT TRENDFirst, Platinum is used in various forms for industrial and manufacturing, as well as jewelry and numismatic functions (minting/collecting).  This move in Platinum is more likely related to the increasing inflationary pressures we've seen in the Commodity sector coupled with the increasing demand from the surging global economy (nearing a post-COVID-19 recovery).  The most important aspect of this move is the upward pricing pressure that will translate into Gold, Silver, and Palladium.We've long suggested that Platinum would likely lead a rally in precious metals and that a breakout move in platinum could prompt a broader uptrend in other precious metals.  Now, the combination of this type of rally in Platinum combined with the Commodity rally and the inflationary pressures suggests the global markets could be in for a wild ride over the next 12 to 24+ months.This Daily Platinum chart highlights the recent upside breakout rally that has prompted a rally from $1050 to $1250+.  If this rally continues to target the 100% Fibonacci price extension, near $1300, then it will become very clear that Platinum is rallying away from other precious metals.  If this coincides with a continued general Commodity price rally, then we may start to see an inflationary cycle setting up that really change things – very quickly.This type of “triple-whammy” is very similar to the commodity/inflationary price rally that took place in the late 1970s and early 1980s.  For those of you that don't remember this trend, commodities started to rally in the early/min-1970s, prompting Gold to rally a low price near $100 (in 1976) to a higher level near $195 (in 1978) – but that was just the beginning.  After that rally stalled a bit, a bigger commodity price rally took place in 1979 that prompted a much bigger Gold price rally and started an inflationary price cycle that prompted the US Fed to take aggressive action in curtailing inflation.  Gold rallied from $169 in late 1978 to over $870 in early 1980 – a 420% increase.PLATINUM MAY LEAD A COMMODITY PRICE RALLYWe believe the rally in Platinum is a strong signal that a Commodity price rally is initiating and that an inflationary price cycle may be starting.  If our research is correct, evidence of this cycle phase will continue over the next 6+ months where commodities will continue to rally overall and where market inflation will become very tangible in the US and across the globe.  This will prompt the US Fed, and global central banks, to begin to take immediate action to contain any potential run-away inflation concerns – obviously tightening monetary policy and raising interest rates.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Platinum may rally above $1500 if this rally extends to the 200% Fibonacci price extension level – and that move may come very quickly.  This weekly Platinum chart, below, shows a green arrow that points to the 200% Fibonacci price extension level (near $1500). Remember, the commodity price rally in 1979/1980 lasted more than 24 months and prompted a big 400%+ rally in Gold.  If that type of rally were to happen today, Gold would rally to levels near $7500 (or higher).Pay attention to what is happening with Platinum and you'll start to understand the inflationary/institutional demand for this unique metal.  If our research is correct, we may see a new rally in Gold and Silver fairly quickly as Platinum acts as a catalyst for an inflationary cycle paired with a Commodity rally (very similar to the 1979 to 1980 rally). It is a great time to be an active trader in these markets.  One of our recent BAN trades just closed out for a 47% gain.  These big trends may be here for the next 24+ months and 2021 is going to be full of these types of trends and setups.  Quite literally, hundreds of these setups and trades will be generated over the next 3 to 6 months using the BAN Trader Pro technology.  The BAN Trader Pro technology does all the work for us.Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Have a great day!
Will 2021 Prompt A Big Rotation In Sector Trends? - PART I

Will 2021 Prompt A Big Rotation In Sector Trends? - PART I

Chris Vermeulen Chris Vermeulen 07.02.2021 19:41
An interesting question was brought to my research team recently related to sector trends in 2021 and what may shift over the next 10 to 12+ months.  It is very difficult to predict any future trends that may set up over the next year or longer, but we took the effort to consider this question and to consider where trends may change over time. The one thing my research team and I kept returning to is “how will the global economy function after COVID and how much will we return to normalcy over the next 12 to 24+ months?”  We believe this key question will potentially drive sector trends and expectations in the future.  When COVID-19 hit the globe, in early 2020, a forced transition of working from home and general panic took hold of the general public.  Those individuals that were able to continue earning while making this transition moved into a “protectionist mode” of stocking, securing, preparing for, and isolating away from risks.  This shift in our economy set up a trend where certain sectors would see benefits of this trend where others would see their economies destroyed.  For example, commercial real estate is one sector that has continued to experience extreme downside expectations while technology and Healthcare experienced greater upside expectations.Longer-term Sector Trends – What's Next?When we look at a broad, longer-term, perspective of market sectors, we can see how many sectors have rallied, some are relatively flat, and others are still moderately weak compared to pre-COVID-19 levels.  The top row of these charts, the $SPX (S&P500), XLY (Discretionary), XLC (Comm Services), and XLK (Technology) sectors have all shown tremendous rallies after the COVID-19 lows in March 2020.  We can also see that XLI (Industrials), XLB (Materials), and XLV (Healthcare) have all started to move higher recently.One needs to consider the manufacturing component of technology, S&P 500/Industrial related companies, Technology and Healthcare services/products in relationship to Materials and Material/Chemical manufacturing.  Many of these industries require massive amounts of raw materials in order to build and supply finished products to the marketplace.  This suggests a broad commodity sector rally may be setting up while other stronger sectors continue to rally.Any resurgence of the global economy after nearly a year of efforts to find an effective cure vaccine/cure for COVID-19 will likely prompt capital to search out undervalued and strong sector trends.  Given the strength of the NASDAQ & Technology sectors as well as the Discretionary sector recently, we believe a shift this likely to focus on Healthcare, Commodities (Basic Materials, Agriculture and Metals), and certain manufacturing sectors – almost like a resurgence of the manufacturing/industrial economy.SPY Monthly Chart Shows Clear Breakout Rally AttemptWhen we compare the longer-term rally in the SPY to the QQQ (see the two charts below), we can clearly see the SPY has just recently rallied above the YELLOW trend line from the lows established in 2009 & 2010.  These lows represent a critical support/resistance channel for the markets moving forward from the 2009 market bottom.  They also represent an acceleration phase cycle in price when the price moves above this level. Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Throughout almost all of 2011~2020, we can clearly see the price trend stayed below this YELLOW level.  Recently, though, the SPY price has rallied above this level for the first time since early 2011.  This suggests a broad SPY rally as initiated and that further upside price trending is likely as long as prices stay above the YELLOW support level.  If this level fails in the future, then a larger downside price trend may prompt a deeper price correction.The important factor for this chart is the recent rally above the YELLOW support channel.  The resurgence of the global economy and global central bank support may be prompting a very strong upward price phase – something we have not seen in more than a decade.QQQ Has Continued A Very Strong Rally Since 2009Comparing the same levels of the SPY chart to the QQQ chart presents a very different picture.  The QQQ price activity has, almost continually, stayed above the same YELLOW support/resistance level originating from the 2009 bottom.  This suggests that the strength of the technology sector, a major component of the NASDAQ, drove quite a bit of upward market expansion over the last 10+ years and is continuing to drive market prices higher.  This incredible trend related to technology services, products, support, and infrastructure has really served as a technological revolution over the past 2 decades.  Yet, will these expectation last if the market changes dynamics?It appears the QQQ is poised to target the $356~$357 level, which would complete a full 200% Fibonacci Measured Move to the upside. If and when that happens, we may see some increased volatility/rotation in the NASDAQ/Technology sector after watching this sector rally more than 100% from the March 2020 COVID-19 lows.Of course, technology will still continue to play a major role in our lives, but we may see these sectors attempt to restructure and re-balance if a new Commodity/Basic Material/Manufacturing phase takes root.  This process may take place over many months or years, but we believe it is very likely given the extent of the rally phases of these sectors and the process of rebuilding a functioning global economy.In Part II of this article, we'll dive deeper into the trends and setups that make this shift in global market sector a real potential for future profits.  Remember, we are not making any call that the market it topping or collapsing from these levels.  We believe the resurgence in the global economy may prompt a restructuring of value in many sectors over the next 2 to 3 years – where Commodities, Basic Materials, and Manufacturing may suddenly become hot sectors as the global economy attempt to rebuild after COVID-19.  This does not detract from the bullish trending in current sectors, it just means many undervalued sectors may become very hot over the next 15+ months.Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Have a relaxing Sunday!
Expectations for Silver given the GameStop price action and the Reddit Revolution

Expectations for Silver given the GameStop price action and the Reddit Revolution

Chris Vermeulen Chris Vermeulen 01.02.2021 21:40
Near the end of 2020, my research team identified trends, pullbacks, and overall upward/downward trends in US major markets as well as those for Gold and Silver.  It is time we revisited these early 2021 predictions in relation to what is happening in the markets currently. You can revisit our original publication entitled What To Expect in 2021 Part II - Gold, Silver, and SPY.At the time we made these predictions, we were unaware of the global phenomenon, the Reddit #wallstreetbets movement, that was taking place.  Our expectations are based on our advanced predictive modeling system and what it sees as the highest probability outcome for price.  The recent news that this Reddit group has targeted a number of symbols (GME, AMC, BB, amongst others), as well as SILVER, may change the dynamics/liquidity of the markets very quickly.What we are witnessing is the incredible strength of the retail trader when they act in a “pack-form”.  The retail traders of the world, using a social media platform, have found new strength as the global markets continue to struggle with COVID-19 and institutional weakness. In a way, these retail traders are focusing on an institutionally authorized “exploit”, like a game exploit, where short-sellers have been permitted to overrun many smaller traders and companies over the past decade or so – ever since the “Uptick Rule” was removed.  This has created an environment where excessive risks were allowed by many institutions as short sellers were able to enter short positions far in excess of the floating shares available.  With extreme leverage in place, these positions were ticking time-bombs waiting to explode. And then along comes the Reddit group – hungry, happy, and en mass.  They identify this structural weakness, which was legally allowed to happen, and begin their “autist wave” of buying these heavily shorted symbols.  Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Gamestop became a “shot across the bow” for these hedge funds and has sent a liquidity ripple across the global markets.  Is the financial system at risk because of excessive leverage, derivatives, and institutional manipulation?  What would it take to completely disrupt these hedge funds and what are the consequences of these short-squeeze runs?  Is this issue bigger than many people expect?  Could it turn into a “liquidity trap”?These are all questions that are certainly going to be answered over the next 6+ months and no one really has a true understanding of how the “deleveraging process” will take place.  If push comes to shove and institutional shorts are forced into excessive losses, then we may see a bigger corrective trend setup in 2021 as a result of this capital/liquidity trap that has sprung.Now, before we continue to review some of our 2021 expectations, let's review a couple of important charts...SPY Must Hold Above SupportThe following Daily SPY chart highlights the major support channel originating from the March 2020 lows.  If this channel is breached, we may begin a deeper downside trend that could align with a volatility/liquidity trap event.  Losses generated by these excessive, leveraged, short positions will prompt firms to pull profits from other symbols/sectors.  This wave of volatility may be just starting.Silver Targets $55 Or HigherSilver has recently been targeted by the Reddit group as one of the most heavily shorted precious metals on the planet.  Currently, silver has rallied above $30 in early trading on Monday, February 1, but has come down closer to the opening (which gapped significantly).  If Silver rallies above $35 and continues to trend, $50 to $55 is the next target level.  After that level is reached, we move into uncharted territory (above $55) and the sky's the limit for Silver and Gold.revisiting our 2021 ExpectationsNow, onto our 2021 Expectations and how this new dynamic of volatility and liquidity may change things. If the increased volatility and liquidity issue persists beyond February 2021, we would expect the global markets to begin to immediately reflect a transition away from excessive risks and leverage.  This would take place by off-loading positions in at-risk and in-profit trades throughout the world to position portfolios in a means to mitigate 3x+ std deviation risks.  This deleveraging process may prompt a huge upside move in precious metals because any global deleveraging event, if it aligns with a moderate price correction event, may push institutions to urgently address leverage issues.  This urgency, in combination with the retail trader revolt, may prompt an excessive liquidity trap in certain sectors/symbols – almost like a “flash-rally” event.Overall, we believe the global markets will settle back into our expected 2021 ranges – although Gold and Silver may rally far beyond our upside 2021 expectations if the Reddit group continue to push Silver higher like they did with Gamestop.  So, at this point, be prepared for massive volatility ranges and continued upside price trends in Gold and Silver while the markets address these global institutional and leverage issues.What this means for traders is that we should expect to see some really big trends through almost all of 2021.  Most importantly, we will end up with more rational price trends and a potentially reduced leverage environment for many sectors and symbols.  This should prompt various market sectors to initiate or resume trends as capital is put to work in sectors that have a stronger growth potential over the next few years.2021 is going to be full of these types of trends and setups.  Quite literally, hundreds of these setups and trades will be generated over the next 3 to 6 months using my BAN strategy.  You can learn how to find and trade the hottest sectors yourself with no proprietary indicators or algorithms just by taking my FREE one-hour BAN tutorial. For those who believe in the power of relative strength, market cycles, and momentum but don't have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you. In addition to trade alerts that can be entered into at the end of the day or the following morning, subscribers also receive a 7-10 minute video every morning that walks you through the charts of all the major asset classes. For traders that want more trading than our 20-25 alerts per year, we provide our BAN Trader Pro subscribers with our BAN Hotlist of ETFs that is updated each day.Happy trading!
Silver May Rally Above $39 On Range Breakout

Silver May Rally Above $39 On Range Breakout

Chris Vermeulen Chris Vermeulen 29.01.2021 21:21
Nearly 6+ months ago, our research team highlighted a unique price range that appears to be repeating itself in Silver.  This price range consists of a $5.40 bullish or bearish price phase.  Using our 100% measured move techniques, we've seen silver move higher and lower by this range over the past 10+ months and, quite interestingly, the current sideways price range in Silver is almost exactly a $5.40 range. After a bit of research related to the explosive upside price move in June 2020, where Silver rallied from $17.75 to levels over $28.75 – an $11 Candle Body Range (nearly 2x the $5.40 range), our researcher team believes the next breakout move in Silver may be another 2x or 3x rally – ranging from an $11+ rally to a $16.50+ rally.  This suggests a potential upside price target in Silver near $39 to $45 if our research is correct.Potential Silver Blastoff Once Price Clears $30This Daily Silver Futures chart highlights the continued $5.40 range that has “bound” silver over the past 4+ months.  The peak in price, near $30 represents the high price level that would have to be breached if any breakout attempt is confirmed.  Initially, we expect to see the $28 (upper channel) level breached, then we need to see the $30 breached as the breakout move continues/confirms.The news that the Reddit group is targeting Silver, as one of the most heavily shorted markets on the planet, suggests we may see a very explosive move higher in the near future if enough pressure is put on the shorts to present a real short-squeeze.  The other interesting facet of this setup is that Silver has already initiated a bullish price phase while the global markets appear to be in a Depreciation phase.  My team and I have written about this in a previous research article entitled Long Term Gold/US Dollar Cycles Show Big Trends For Metals – Part II.If our research is accurate and correct, the combination of the Reddit targeting, extreme short positions, longer-term Depreciation cycle phases and the current Bullish Silver price phase may prompt a very big and explosive breakout move once Silver prices clear $30.Reddit Focuses Attention On Silver – What Next?The interesting component to all of this is the renewed focus on extremely heavily shorted symbols because of the Reddit group.  Silver was trading near the middle of the $5.40 price range and price was stalling/declining price to the sudden shift by the Reddit group.  Maybe this renewed focus in the Silver short positions focused the broader market into the unique setup that has continued in Silver over the past 12+ months – a rallying market in a Depreciation phase with a very heavy short interest.  It has all the makings of a potentially very big upside break move.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Recently, if you've been following my research, I have been expecting a shorter-term downward price trend in Silver – with a longer-term outlook still Bullish.  After reaching the peak of the channel in late December 2020, I expected Silver to move a bit lower before building enough momentum to attempt a breakout move. Now that a renewed focus on Silver has taken over, there is a very real potential that a breakout above $28~$30 is in the works – possibly initiating a very explosive upside trend.The last explosive upside move in Silver, from June 2020 to August 2020, only about 90 days, prompted an $11.50 to $12.50 rally (about 2x the $5.40 range).  This next upside breakout trend may see a similar, or larger, scale of a price advance – targeting $39 to $45 (or higher).In short, any breakout above $28 to $30 may prompt a very big upside price advance.  Any failure of this breakout attempt will likely prompt a downside price move to levels near $24 to $25.50 (again).  This renewed attention into Silver, one of the most heavily shorted commodities on the planet, may prove to be an incredible opportunity for traders – possibly pushing miners and other precious metals much higher over time.As a reminder, this increased volatility and price range will create some opportunity for euphoric enthusiasm by many traders.  Please don't get caught up in all of the hype.  This may be a once in a blue-moon setup in precious metals because of the renewed focus on Silver.  It may also prompt a big pullback move after any rally attempt.  Play this smart – don't get caught up in the hype.2021 is going to be full of these types of trend rotations and new market setups.  Quite literally, hundreds of these setups and trades will be generated over the next 3 to 6 months using my BAN strategy.  You can learn how to find and trade the hottest sectors right now in my FREE one-hour BAN tutorial. You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.Don't miss the opportunities in the broad market sectors over the next 6+ months. For those who believe in the power of relative strength, cycles and momentum then the BAN Trader Pro newsletter service does all the work for you in determining what to buy, when to buy, and when to take profits. You will be kept fully informed of the market with my short pre-market report every morning along with the BAN Hotlist for those looking for more trades.Have a great weekend!
US Stock Market Rolls Lower After 18% Rally Since November 2020

US Stock Market Rolls Lower After 18% Rally Since November 2020

Chris Vermeulen Chris Vermeulen 28.01.2021 03:23
Price action is usually conducted in a series of up and down price phases – or waves/cycles.  Typically, price will move higher or lower in phases- attempting to trend upward or downward over time. This type of price action is normal.  Extended upward trends with very little downward price retracements happen sometimes – but not often.  They usually happen in “excess phase” rallies or after some type of news event changes expectations for a symbol/sector.Putting Concerns Into Perspective – Still BullishSince early November 2020, the US stock market has continued to rally in a mode that is similar to an excess phase rally – showing very little signs of moderate price rotation. While price volatility has continued to stay higher than normal, you can see from the SPY Daily chart below that it has rallied from $324.40 to $385.95 (over 18%) in just under 90 days.  At some point in the future, a moderate price rotation/retracement will happen that may be in excess of 6% to 11% - as has happened in the past.The purpose of this research post is to alert readers that the markets appear to have started a period of downside price rotation – which is normal. This SPY Daily chart, above, highlights the upward support channel originating from the March 21, 2020, COVID-19 lows (CYAN line) and also the upward support channel originating from the early November 2020 lows (YELLOW line). It is important to understand that any downside price retracement which stays above the CYAN line level should be considered a normal range price rotation within a bullish trend.  This suggests a -3% to -4% downside price trend from current levels would simply qualify as downward price rotation within a bullish trend – nothing more.If price were to break below the CYAN upward trending support channel, then we would become more concerned that a deeper price downtrend is setting up which may target lows from Mid-November 2020 (-6.5%) or the late October 2020 lows (-13% to -14%) from current SPY price levels.  Obviously, a deeper downside trend targeting the October 2020 lows would suggest the US stock markets are potentially entering a new phase of trending – possibly a sideways consolidation trend.TRAN Testing Support Near 12,180The following Transportation Index daily chart shows a very clear picture of how this “rollover” in the markets has setup and where real support is likely to be found.  The early January lows, near 12,180 are the most likely immediate support level on the TRAN Daily chart, below.  If the US stock market attempts to find immediate support to sustain the current bullish rally trend, then this level in the TRAN will likely hold up well over the next few days/weeks. Otherwise, if the TRAN breaks below this level, then the next viable downside target become the November 2020 lows (or somewhere close to those levels).Be sure to sign up for my FREE webinar that will teach you how to find and trade my BEST ASSET NOW strategy on your own!Using Fibonacci Retracement Theory from the early November 2020 lows to recent highs, we achieve the following levels:25% retracement: 12,628.9238.2% retracement: 12,331.4450% retracement: 12,065.4761.8% retracement: 11,799.51The 12,180 level we are suggesting will turn into critical support is just above the 50% Fibonacci Retracement level.  Therefore, any further downside trending would be predicated by a breach of both the 12,180 level and the 12,065.47 level.  If price holds above either of these support levels confidently, we would consider further downside risks unlikely.VIX Spike Higher BeginsThe upward spike in the VIX recently is indicative of how volatile the markets have become after nearly 90 days of continued upward trending.  Whenever the US stock market enters a decidedly bullish price trend for an extended period of time, the VIX naturally “normalizes” into a lower boundary and becomes hypersensitive to moderate price rotations.  We've seen this happen many times in the past.Because of the way the VIX is calculated, when these breakout moves happen while the market is conducting a relatively normal price rotation/correction, the VIX can sometimes spike above 35 or 45. To put this into perspective, the 2008-09 market crash prompted a VIX move to near 95.  The COVID-19 market crash prompted a VIX move to near 85. Many other moderate market downtrends over the past 10+ years prompted VIX moves above 30~40.  Three of the biggest “normal range” VIX moves happened in August 2011 (VIX level near 48),  August 2015 (VIX level near 53.50), and February 2018 (VIX level near 50).If another big market rotation were to take place in the near future, we believe early February would be the time/place for it to happen based on our predictive modeling system's expectations (see this research article: (https://www.thetechnicaltraders.com/what-to-expect-in-2021-part-ii-gold-silver-and-spy/).  We also believe this downside price swing will end fairly quickly and that a continued bullish price trend will resume in March or April 2021.The potential for a broader market rotation and trend “reset” is aligning with our December 2020 predictions for 2021.  Quite possibly, the downside price trending we are seeing now is the start of a 15 to 25+ day market rotation which will likely “reset” the bullish trending bias and allow for broader market trends to continue higher. We consider this an opportunity for traders to take advantage of this rotation in major markets and sectors.2021 is going to be full of these types of trends and setups.  Quite literally, hundreds of these setups and trades will be generated over the next 3 to 6 months using the Best Assets Now strategy.  Are you ready for these big market rotations expected in 2021? You can trade my BAN ETF strategy with no proprietary indicator, scanners, or algorithms just by watching my FREE webinar. Not only will it show you a strategy you can implement tomorrow, but you will also receive over $100 worth of free goodies designed to make you an even better trader… no strings attached. Go ahead and watch the webinar now – click here to start. If you want to improve your own trading strategy and win-rate without doing the research yourself, then you need to subscribe to BAN Trader Pro newsletter service to get my daily BAN Hotlist, my pre-market video walkthrough of the charts every morning, and my BAN strategy trade alerts.Happy Trading!
Russell 2000 ETF Initiates New Rally Trend

Russell 2000 ETF Initiates New Rally Trend

Chris Vermeulen Chris Vermeulen 26.01.2021 22:38
Last week my team and I alerted our readers to the current trends and shifting sectors that are getting hotter every day.  Technology, Energy, Financials, Industrials and others are experiencing bullish trends we haven't seen in years.  The Russell 2000 ETF, URTY, is starting a new breakout uptrend just after our BAN Trader Pro system suggested the SPY may initiate a new bullish rally.  You can read relevant research posts here: Recent triggers in these sectors suggest US Stock Markets may enter a rally phase and Technical Traders are using the BAN Hotlist triggers with huge success using regular ETFs, Leverage ETFs, and Options.As we can see in the chart below, the Russell 2000 has been one of the top performers since just after the November 2020 elections. Originating a breakout trigger on November 3, near $43.46, and confirming a “New High Breakout” on November 9, near $51.37, the Russell 200 sector has been rallying very strongly over the past 60+ days. The current “New Price High” breakout suggests this rally may continue.  Fibonacci price extensions show a peak may target levels near $125~$130 – nearly 20%+ higher than current prices.These sector trends that initiated in early November 2020 are a result of capital being deployed in sectors that are expected to benefit from new policies, Q4:2020 earnings, and renewed investor interest in 2021. Billions in capital have been redeployed into the markets with very high expectations.  This will result in big trends, increased volatility and even more opportunities for efficient traders. My Best Asset Now strategy that I teach to you for free helps you find these hot sectors and ride them out for explosive gains.The strength of this uptrend in URTY, breaking above the January 2020 highs, suggests any continued rally from this point may be reflective of the incredible -$80.34 collapse that took place as a result of COVID-19.  Using this range as a basis for future upside price expansion, Fibonacci Price Theory suggests a $130 to $141 upside target level. If these levels are accurate, we may see another 25%+ upside move in the Russell 2000 ETF, URTY.With so much opportunity in ETFs and other stocks/sectors, it is important for traders to be able to identify the best setups, triggers and trends.  Our BAN Trader Pro newsletter service is designed to help you accomplish that with our easy to follow trade alerts and my daily pre-market report.  The daily BAN Hotlist, also included in the BAN Trader Pro newsletter service, provides a very clear ranking and trigger system that shows you to trade the very best trend setups given their relative strength and momentum for more active traders who want to enhance their own strategies.One of our members recently wrote us this email:Hello Chris– I want to share a success story but do not want my real name shared (you can use my first name  - “Dave”)I signed up in late December and have taken 7 trades using the BAN system.  I did get into HAIL and SILJ not on a new system signals but as part of the “pre-launch” of the actual BAN system that started in January. All 7 trades I exited in profit.  I’ve been using the signals to go in and out of swing trades as “New” alerts are added.  I’m looking forward to the market turning over and entering into 3 trades at the top of the list (sic).I signed up for the quarterly plan at $250 per quarter, that means I have already gotten a 2,189% ROI on my initial investment.  I’ve more than paid for my subscription for the whole year 5x over in 1 month.Chris – Thank you very much for setting up this system.  It is easy to use, easy to understand and frankly gives you great entry signals.  I very much like quick in and out trades in addition to the longer horizon trades that you teach.  Just waiting for the market to turn over to get into those trades and use your system but in the meantime, your signals are giving great entry points. Dave, sent by email on January 21, 2021. Dave's public review can be found at The Technical Traders - Verified Reviews.I publish these articles and research posts to teach our readers the importance of using efficient trading strategies to grow their wealth, achieve financial goals, and have more free time.  2021 is going to be full of great trading opportunities for those who know how to take advantage of sector rotations, relative strength and momentum. Quite literally, hundreds of these setups and trades will be generated over the next 3 to 6 months for those subscribers using BAN strategy.  Sign up now and I will teach you how to create and trade your own hotlist in my FREE (less than) one-hour tutorial on the Best Asset Now.For those that don't have the time to research and create their own BAN Hotlist, you can get my Hotlist, research, and trade alerts delivered to you with the BAN Trader Pro newsletter service. Subscribers of BAN Trader Pro will also receive my daily pre-market video where I walk through the charts of all the major asset classes, my BAN Hotlist, and other trade setups and things to watch out for in the markets.  You owe it to yourself to see how simple it is to only trade the Best Assets Now to generate incredible results.Happy Trading!
Technology & Energy Sectors Are Hot – Are You Missing Out?

Technology & Energy Sectors Are Hot – Are You Missing Out?

Chris Vermeulen Chris Vermeulen 24.01.2021 21:22
We have seen some really big moves in various S&P sectors over the past 60+ days and these trends look like they may continue for a while.  Near the end of 2020, in October and November, the markets seemed to stall a bit before the US elections, but they have really started to trend much higher over the past 60+ days.  Technology and Energy seem to be leading the charge in some respects. The most important thing for traders is to find decent breakout trends in stocks and sectors that have a real potential for strong continued trending.  When we find these types of longer-term trends, we can scale in and out of the typical up/down price trends, over time, to generate some incredible returns.Technology Heating Up AgainThe move in the IXN Global Technology ETF charted below, looks like it is starting to accelerate higher.  It has already moved +17% over the past 60+ days, but there is a real potential that global investors are starting to pile back into technology ahead of the Q4:2020 earnings reports.  This may prove to be one of the hottest sectors in 2021 – so keep an eye on this new breakout rally.Energy and Exploration Setting Up For Another Move HigherOne of the biggest movers over the past few months has been the recovery of the Oil/Gas/Energy sector after quite a bit of sideways/lower price trending.  You can see from this XOP chart, below, a 44% upside price rally has taken place since early November, and XOP has recently rotated moderately downward – setting up another potential trade setup if this rally continues.  Traders know, the trend if your friend.  Another upside price swing in the XOP, above $72, would suggest this rally mode is continuing.Recently, we published a research article suggesting a lower US Dollar would prompt major sector rotations in the US and global markets where we highlighted the fact that the Materials, Industrials, Technology, and Discretionary sectors had been the hottest sectors of the past 180 days, but the Energy, Financials, Materials, and Industrials had shown the best strength over the past 90 days.  Technology, Healthcare, Financials, Energy, Consumer Products/Services, Foreign Markets have all been hot over the past 4+ months, but what is trending right now?  We believe the best performing sectors are likely to be sub-sectors of the SPY and QQQ. My research team and I believe Technology and Energy still have lots of room to run.  Financials could be a big winner too if the recent upside trend continues. We rely on the BAN Hotlist to rank the “Best Assets Now” and tell us when new trade entry triggers are generated.In short, 2021 is going to be an incredible year for BAN Trader subscribers because of the big trends, high volatility, stimulus, and policies with the Biden administration. The time is now to learn and trade the Best Assets Now Hotlist using our proven sector rotation strategy. Our BAN Trader Pro strategy is proving to be an incredible advancement that allows us to dominate and generate Alpha. We urge you to take advantage of the BAN Trader Pro technology and prepare for the big trends that we expect to continue throughout all of 2021 and into 2022 and beyond.I am teaching my BAN trading strategy in a 1-hour FREE webinar. The webinar is 100% educational and you will get everything you need to trade my powerful strategy on your own, with no proprietary trading tools or indicators, and with no strings attached. Learn this strategy now and join me in my webinar at https://joinnow.live/s/EPdGTI.Enjoy the rest of the weekend!Chris VermeulenChief Market Strategistwww.TheTechnicalTraders.com
Gold & the USDX: Correlations

Recent triggers in these sectors suggest US Stock Markets may enter a rally phase

Chris Vermeulen Chris Vermeulen 22.01.2021 21:30
Recently, our Best Asset Now (BAN) Hotlist generated a new trigger on the SPY chart.  Typically, this type of trigger suggests the SPY is starting a new, potentially explosive, upside price rally.  But what really interests us is the potential that the strongest sectoral ETFs may continue to see a much stronger upside price rally as a result of this new trigger.RECENT BAN SPY TREND TRIGGERThe strength of the BAN Hotlist is not the general market triggers it gives, such as the SPY, Dow Jones, or NASDAQ, but instead the ability to align these major market triggers with the strongest performing sectoral ETFs. This allows those using the Hotlist and BAN strategy to take advantage of the best-performing assets in the markets in any market trend.  The new SPY trigger, seen on the chart below, suggests the US stock markets may be starting a new upside price trend, which will cause capital to rotate into different sectors.  Our simple BAN Hotlist and strategy helps us identify these sectoral opportunities.QQQ GENERATES A SIMILAR TYPE OF BREAKOUT TRIGGERTraders love when ideas drawn from one chart is corroborated by other charts. As we can see from the chart below, the QQQ appears to have confirmed this BAN trigger with a similar type of upside price breakout. This upside move in the QQQ aligns with some of our recent research that suggested the Technology sector had stalled after having been one of the fastest-growing sectors for several months now.  We may start to see certain sub-sectors of technology really start to advance faster than the SPY/QQQ – which creates explosive opportunities for traders/investors.Recently, we published a research article suggesting a lower US Dollar would prompt major sector rotations in the US and global markets. Within that article, we highlighted the fact that the Materials, Industrials, Technology, and Discretionary sectors had been the hottest sectors of the past 180 days, but the Energy, Financials, Materials, and Industrials had shown the best strength over the past 90 days.  Technology had fallen/stalled dramatically over the past 90+ days.Overall, we believe the best performing sectors are likely to be sub-sectors of the SPY and QQQ. Potentially, certain components of the Technology, Health Care, Discretionary & Utility sectors.  Beyond that type of general analysis, we rely on the BAN Trader system to rank the “Best Assets Now” and tell us when new trade entry triggers are generated. It is very likely that this new SPY BAN trigger will prompt an extended upside price rally across a number of assets over the next few days/weeks.  Are you ready for these big market rotations expected in 2021?  Do you want to learn how BAN can help you find and trade the “Best Assets Now”? You too can also trade Best Assets Now with no proprietary indicator, scanners, or algorithms just by watching my FREE webinar. Not only will it show you a strategy you can implement tomorrow, but you will also receive over $100 worth of free goodies designed to make you an even better trader... no strings attached. Go ahead and watch the webinar now - click here to start! If you want to improve your own trading strategy and win-rate, then you need to subscribe to BAN Trader Pro to get my daily BAN Hotlist, my pre-market video walkthrough of the charts every morning, and my BAN strategy trade alerts.Happy Trading!
What's next for Bitcoin – $56k or $16k?

What's next for Bitcoin – $56k or $16k?

Chris Vermeulen Chris Vermeulen 21.01.2021 21:21
Bitcoin traders and enthusiasts are riding the wave after the incredible rally from $9,000 to $42,000 throughout Q4:2020.  It certainly was an incredible run – more than quadrupling in value in less than three months. Now we find ourselves in an early 2021 corrective phase which will end in either another Breakout/Rally attempt or an Excess Phase (Blow-off) Top.  This article highlights both potential outcomes because at this stage it is difficult to determine a single high-probability outcome.Before I continue, I urge readers to review our How To Spot The End Of An Excess Phase article from November 27, 2020. You can re-read it here. This is an excellent primer for the content of this current research article.What A Bitcoin Breakout Would Look LikeLet's take a look at what a Breakout/Rally technical setup in Bitcoin would look like in the near future.  Looking at the chart below, price must hold above critical support near $27,800 as any new lower low would constitute a continuation of the Bearish downtrend.  Therefore, any renewed rally attempt would likely initiate from levels near $28k (or just below this level). Using a Fibonacci Price Extension, we can see the $46,280 (0.618) and the $56,190 (1.0) Fibonacci Extension levels are key potential upside price targets if a breakout/rally resumes.  We are measuring the most recent bottom, in late November, to the current high price level, then aligning the Fibonacci price extension bottom to the current price lows (near $30,260).  This allows us to see future potential price target levels if this rally/uptrend continues.Again, it is critical that the support level near $27,800 holds and price lows do not breach this level.  Any breach of this support level would constitute a “new lower low” in Fibonacci Price Theory – which suggests a downtrend is continuing.What A Bitcoin Breakdown Would Look LikeThe opposite aspect of this recent peak is that it may be setting up as an Excess Phase (blow-off) Top, as we can see the #1 (extreme rally) and #2 (sideways flag) setup in price recently.  The completed Excess Phase pattern consists of five total processes:The extreme upside price rallyThe TOP, followed by a moderate downside price trend that sets up the FLAGThe breakdown of the FLAG trend, which then targets a broader support levelThe breakdown of that support level, which then targets the ultimate bottom/momentum base levelOnce the ultimate bottom/base is established, then a new momentum/bottom begins and trend usually attempts another rally attempt.Be sure to sign up for my webinar that will teach you how to find and trade my BEST ASSET NOW strategy on your own FREE RIGTH NOW!Obviously, when you look at the Bitcoin to USD chart (below), it is fairly easy to identify the #1 and #2 setup of the Excess Phase Top.  The next question is will price breakdown and attempt to move below the $27,800 recent low support level or will it hold above this level, prompting another rally attempt.  If price breaks below the $27,800 support level (near recent lows on January 11, 2021), then we need to be very cautious of the broader Excess Phase Top process continuing and a continued breakdown resulting in lower price trends.  If the $27,800 support level holds, as we suggested in the Breakout/Rally example above, then there is a strong chance that $42k to $56k could be the next upside targets.I understand that readers and traders want to have more clarity on the direction Bitcoin will go, but ultimately, we need price to complete the next phase of this process. It all hinges on the current $27,800 support level right now.  As long as that support level holds, then there is a very strong possibility that another upside price rally will begin at some point in the future.  If it is broken and the Flag Breakdown continues, then it would appear the Excess Phase Top has moved into Phase #3 and will likely continue to unfold.Why wait for Bitcoin to begin a new trend – Stock sectors are movingEven though we will wait and see on Bitcoin, we see a wide variety of other sectors to play instead of holding out for the right Bitcoin trade. We have seen some explosive trading opportunities in sectoral ETFs despite the pullback in Bitcoin and other assets. One of our Best Asset Now Hotlist ETFs has grown by 23.55% since we identified its trigger a short 9 days. Some of our subscribers that traded options on that BAN Hotlist trigger did really, really well!If you love Cryptos or not, don't miss out on the opportunities that are setting up in the broader, global market and stock sector ETFs with our BAN strategy. If you want to improve your own trading strategy and win-rate, then you need to subscribe to BAN Trader Pro to get my daily BAN Hotlist, my pre-market video walkthrough of the charts every morning, and my BAN strategy trade alerts. Happy Trading!
Our Custom Valuations Index suggests Precious Metals will decline before their next attempt to rally

Our Custom Valuations Index suggests Precious Metals will decline before their next attempt to rally

Chris Vermeulen Chris Vermeulen 17.01.2021 22:50
My team prepares Custom Valuations Index charts to understand how capital is being deployed in the global markets alongside US Dollar and Treasury Yields.  The purpose of the Custom Index charts in this article is to provide better insight into and understanding of underlying capital movements in various market conditions.  Recently, we discovered the Custom Index chart shares a keen alignment with Gold (and likely the general precious metals sector).  Let's explore our recent analysis to help readers understand what to expect next in precious metals.Weekly custom valuations index chartThe first thing that caught my attention was the very clear decline in the weekly Custom Valuations Index recently, as can be seen in the chart below.  The second peak on the Custom Valuations Index chart occurred on the week of August 3, 2020.  Gold also peaked at this very same time.  This alignment started an exploratory analysis of the Custom Valuations Index and the potential alignment with the precious metals sector.The peak in the Custom Valuations Index on March 20, 2020 (near the height of the COVID-19 market collapse) presented a very clear upside target which was confirmed with a second peak level in August 2020.  The fact that the Custom Valuations Index reached that peak level again and that peak level also aligned with the peak price in Gold may just be a coincidence.  As we continue to explore this unique alignment, we'll explore more unique characteristics to see if there is a link that is more than mere chance.There have been two very clear Pennant/Flag formations as you can see on the above weekly Custom Valuations Index chart.  The first one is highlighted in BLUE and the second one is highlighted in GREEN.  In both of these instances, the Custom Valuations Index broke lower and Gold followed this trend.  Currently, the Custom Valuations Index has begun to breakdown into a new bearish trend. This suggests that Gold and Silver may also move lower as this Custom Index attempts to find a bottom.Now, let's do a more in-depth analysis of Gold and the Custom Valuations Index.  In the following charts, we've attempted to highlight key price traits that took place in Gold over the past 9+ years and wanted to see if these key price points were reflected in the Custom Valuations Index chart.  The purpose of this is to identify if our assumption that the Custom Valuations Index chart is aligned to Gold (in some way) shows any additional (past price) alignment to validate our thinking.Weekly Gold chartFirst, we'll start with a Weekly Gold chart that highlights key price points, peaks, bottoms, and breakout/breakdown events.  We want to see if the Custom Valuations Index chart also aligned with these key price moves/dates.The following Gold Futures Weekly chart highlights the Appreciation/Depreciation cycles we've identified in earlier research as well.  The GREEN ARCs near the bottom of the chart show you where each cycle starts and stops.  The RED descending line represents a Depreciation Cycle and the GREEN Ascending line represents an Appreciation Cycle.  We are focusing on the September 2011 peak price in Gold and the key price events after the “Failure Peak” that took place to set up the bottom in early 2015, the rally in early 2016, and the breakout rally in June 2019.  Does the Custom Valuations Index chart show these same characteristics and dates?weekly customs valuation chart and gold price historyThis next chart is the Weekly Custom Valuations Index chart with the same highlighted price points/dates.  The first thing we see from this chart is that the “Failure Peak” (October 2012) was a higher price peak on this Custom Index chart than the setup on the Gold chart at the same time.  Thus, the Custom Valuations Chart represented the extended “excess phase” top in Gold as a continued upward trend.  The downtrend after the October 2012 peak on this Custom Valuations Index chart does align with the big breakdown on the Gold chart (above).Be sure to sign up for my FREE webinar that will teach you how to find and trade my BEST ASSET NOW strategy on your own!Additionally, the early 2015 bottoming on the Custom Index chart represented a very early sign that Gold may be looking for a bottom as well.  Gold did move lower throughout the next 11+ months, but so did the Custom Valuations Index price. It makes sense that the Custom Valuations Index may be representing underlying key market dynamics that could be applied to the Gold chart in some way.The Initial Gold Rally in February 2016 was the first real clear trigger on both these charts that coincided with a breakout/rally trend in Gold.  This rally attempt eventually stalled near the end of 2016 and began an extended “momentum base” setup.  Notice how the Custom Valuations Index chart represented this momentum base as and extended sideways Pennant/Flag formation that ended near June 2019.  Also, notice how the stalling in the Custom Valuations Index chart initiated many weeks before Gold actually peaked in 2016.From the February 2019 Breakout, we can clearly see the impressive rally in the Custom Index chart aligned with a big rally in Gold.  What is interesting is the DUAL PEAK in the Custom Index chart that first setup from the lows of the March 2020 COVID-19 bottom.  Could it be that extreme price move somehow represented a key future target for Gold and for the Custom Index chart? There is very little corresponding data to compare to – so we'll have to continue to try to dig deeper for any confirmation of this unique setup. Yet, we can't underestimate the DUAL PEAK setup on the Custom Index chart and the fact that the second peak, August 2020, also aligned perfectly with the current peak price in Gold. Since that August 2020 peak, both Gold and the Custom Index chart have continued to breakdown and trend lower.  It makes sense that Gold will continue to move lower, in alignment with the Custom Index chart, attempting to find a new bottom/momentum base.  We believe the 200 to 240 level on the Custom Valuations Index chart may be a suitable range for this new bottom.One thing we can say with a moderate degree of certainty is that the Custom Valuations Index chart appears to lead the precious metals in many instances and it appears to perfectly align in other instances.  Our research suggests the US and global markets have recently entered a Depreciation Cycle phase which may last many years.  The Custom Valuations Index chart is suggesting that the US, global and precious metals sectors are weakening and attempting to find/set up a new momentum/base. This would suggest that capital will move away from precious metals as well as major market sectors and attempt to find opportunities in undervalued or other hot sectors.  Eventually, once the new momentum base/bottom is firmly established in Gold and the Custom Valuations Index chart, the US and Global major market sectors will likely resume a very strong upside price trend.The key take-away from this research is that sector rotations related to precious metals, major global markets and potential early warning signs of strength or weakness may be attainable by focusing on how the Custom Valuations Index trends in comparison to Gold and the major indexes.  Currently, the Custom Valuations Index is suggesting that precious metals will move lower and try to find a new bottom/base.  This means other market sectors will perform better than precious metals for a period of time.This is also an important reason to focus your attention on finding the best and hottest sectors for new trade opportunities.  When broad components of the market enter bearish trends, like the Custom Valuations Index is suggesting for precious metals, it is best to have a proven system for identifying the best sector trends and trade opportunities.  While one sector may stall, others are rallying.  Long term success is found by focus your trading capital on the strongest opportunities while avoiding weaker trends.2021 is going to be full of these types of trends and setups.  Quite literally, hundreds of these setups and trades will be generated over the next 3 to 6 months using my BAN strategy.  You can learn how to find and trade the hottest sectors right now in my FREE one-hour BAN tutorial. For those who believe in the power of relative strength, cycles and momentum then the BAN Trader Pro newsletter service does all the work for you. Those who want even more trades use my BAN Hotlist to make sure their trades are going with the momentum to maximize their odds of success.Don't miss the opportunities in the broad market sectors over the next 6+ months.  2021 and beyond are going to be incredible years for traders.  Staying ahead of these sector trends is going to be key to developing continued success in these markets.  As some sectors fail, others will begin to trend higher.  Learn how BAN Trader Pro can help you spot and trade the best trade setups while mitigating risks at every turn. You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.Please take a minute to visit my website to learn about our BAN Trader Pro and our other services and courses that are all designed to give you that edge you need to be a successful trader. Enjoy your weekend!
Revisiting Our October 23 Four Stocks To Own Article – Part I

Revisiting Our October 23 Four Stocks To Own Article – Part I

Chris Vermeulen Chris Vermeulen 12.01.2021 03:28
Just before the US Elections, we authored an article related to four stocks/sectors that we thought would do well immediately after the November 2, 2020 elections.  The article highlighted how sector rotation in almost any market trend can assist traders in finding solid trading triggers.  We picked four stocks from various sectors for this example:AALAmerican AirlinesTravel/LeisureACBAurora CannabisCannabisGEGeneral ElectricIndustrial/Specialty IndustrySILJJunior Silver Miners ETFPrecious Metals MinersWhen you review my Yahoo! Finance article from October 23 and the November 6 follow up article related to these stock picks, you will quickly see that all of these stocks exhibited similar types of technical patterns.  They were all bottoming in an extended rounded bottom formation and had all started to near a Pennant/Flag Apex in price.  Additionally, many of them, with the exception of SILJ, had set up a very clear RSI technical divergence pattern over the course of setting up the extended bottom in price.My research team and I selected these stocks because of key expectations related to the post-election mentality of investors related to various sectors.  First, the cannabis sector had a number of new US states approve cannabis legislation – providing for an expected increase in business activity for the entire cannabis sector.  Second, no matter who won the election, another round of stimulus was likely to be approved resulting in increased economic opportunity for companies like GE and AAL.  The Travel and Leisure sector still had its risks as a surge in COVID cases could greatly disrupt future travel expectations.  Junior Silver Miners was our “hedge trade”.  If none of these other stocks started to rally, then Silver Miners would likely move 15% to 20%+ higher over time.We thought it would be a good time to check in with our picks to share the importance of using sector trends to your advantage.  Currently, there are dozens of sectors that are either in a solid bullish trend or are shifting into new bullish trends.  Being able to catch these setups early and having the confidence to act on these trends is very important. We highlighted some of these setups in our October 23 article, but they happen all the time in various market sectors.What is important is being able to see the setups, identify the sectors that have the strongest capability for future trends, then determining if you should trade the Sector ETF or some individual stocks within that sector.  Generally, the Sector ETFs provide enough liquidity and opportunity that you don't need to worry about the individual stocks.  Yet, sometimes, applying the same techniques to the strongest sector stocks can add a very valuable component to your trading.Below, we have highlighted the accomplishments of each stock symbol over the past 60+ days.  For this example, we will estimate a $20k allocation for ALL TRADES ($5k each) and use a simple 33% target allocation for Target 1, Target 2, and the Trailing Remainder.  That means, we take 33% of the position off at Targets 1 and 2, then let the remaining 33% trail with a protective stop.SymbolEntry PriceTarget 1 %Target 2 %Last Price %AAL$12.6039.81%NA22.44%ACB$4.68124.35%NA114.72%GE$7.6322.77%NA48.56%SILJ$14.68NANA10.11%Our $20k sample account would look something like this right now...SymbolEntry PriceTarget 1 $Target 2 $Last Price $AAL$12.60$656.87NA$6,408.61ACB$4.68$2,068.28NA$10,802.59GE$7.63$375.71NA$6,995.44SILJ$14.68NANA$5,505.50   Total =>$29,712.14Overall, this represents a +48.5% net account profit in just over 60 days by focusing on sector trends and rotations.  In the future, if any of our higher Target levels are reached, we'll pull another 33% of these trades and lock in these gains while we let the remaining position carry forward with a trailing stop.  The trailing stop should be based on the last completed target level reached.  For example, if Target 1 is reached, then the stop should be placed just below the Entry Price level.  If Target 2 is reached, then the stop should be placed just below the Target 1 level and it should begin to trail higher as new price highs are reached.Usually, we will pick an exit price level based on some type of trend failure or reversal point.  In most cases, this happens when the longer-term (Weekly based) moving averages change direction and price activity displays a clear technical pattern showing the bullish trend has ended.  Most traders are capable of determining their own exit points using technical indicators and other tools as they wish.  Be sure to sign up for my FREE webinar that will teach you how to find and trade my BEST ASSET NOW strategy on your own!When some sector is trending very strongly, we don't want to attempt to second guess the peak level or end of the trend.  We just want to ride that trend for as much profit as we can – unless some other sector sets up a new opportunity where we can better deploy our assets for profits. We like to let the trend work itself to an eventual end and use our Target Levels to lock in gains along the way.American Airlines TradeThe following Weekly chart of American Airlines (AAL) highlights the simple trade we suggested on October 23, 2020.  As you can see, the upward sloping lows in price aligned with the upward sloping RSI trend (in the lower pane).  AAL has reached our first target level (the MAGENTA line) and has recently settled near $15.13.  Our stop level should be just below our entry price level, near or below $12.60 at this time as we wait to see how the bullish trend continues.In Part II of this article, we'll go over the remaining three stock symbols we initially suggested on October 23, 2020 and highlight even more details related to sector trending.Many years ago I was researching Japanese Candlesticks and the teaching of Seiki Shimizu (The Japanese chart of charts: Shimiz) settled well with my thinking.  In his writing, he suggests that more than 60% of the time traders are waiting for new setups/trades.  This is something that many traders need to fully understand in order to balance aggressive trading tendencies with their abilities to create profits and protect assets.If this theory is correct, then trades only need to focus on the 30% to 40% of any 12-month span of time  (three to four months) where the bigger sector trends/trades setup and initiate.  Otherwise, these trends may continue, in some form, over the remainder of the time to generate profits (or not).  This type of thinking suggests that traders only need to focus on the best immediate setups in any market trends/sectors and ignore the “froth” in the markets on a day-to-day basis.  Doing so will allow most traders the freedom to create profits by taking skilled and effective entry triggers while being able to enjoy life, family, and other hobbies.  Trading does not need to be a full-time, 24/7 effort.  The global markets generate big sweeping sector trends sometimes 2 to 4 times a year as capital moves in and out of various trend cycles (short, intermediate, and long term).  All we have to do is find the best sectors to trade, then wait for the trigger/entry setup. Now, imagine what it would be like if you could accomplish something like this every week or month with technology? You can with my BAN Trader Pro strategy and Hotlist.BAN Trader Pro can help you identify and trade the Best Asset Now.  The BAN Hotlist helps us identify the strongest and best trade setups in any market sector.  Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades.  You owe it to yourself to see how simple it is to profit from sector rotation with my strategy. You can sign up here for my 100% educational webinar for free.Have a great week!
Early 2021 BAN Trader Setups Show Incredible Success

Early 2021 BAN Trader Setups Show Incredible Success

Chris Vermeulen Chris Vermeulen 09.01.2021 02:33
Even though our BAN Trader Pro technology has just been released to members, the early price rotation in 2021 has shown incredible success the first week. Early 2021 BAN Trader Protriggers, used as discretionary trading signals for members, have caught some incredible early success recently.The BAN Trader Pro system allocates trading capital into four high momentum ETFs with each new leg up in the stock market that meets the BAN trigger setup. This allows BAN Trader Pro members to capitalize on the strongest sectors presenting the highest BAN momentum ranking. Over many weeks and months, continuing to focus on the best assets to own (BAN: Best Asset Now) and trading only the best assets when proper alignment between the market and these momentum sector BAN setups occur, we are able to target stronger trends with reduced draw-downs and risks.How to Benefit Using BAN Trader Pro HotlistYet, one of the best added values for our BAN Trader Pro members is the BAN Hot List. This is a Daily list of the BAN sectorsetups which also includes new BAN triggers that fall somewhere below the top ten BAN ranking sectors. This allows our BAN Trader Pro members to take additional trades, as they like as a discretionary trade. These explosive trade setups coupled with our detailed position management guidelines packs a powerful punch for the growth of any account using them.This partial screen capture of our current BAN Trade Pro Hotlist (blurred to protect Member-only content), highlights how to view the best ETFs to ownas any given time and all market conditions. The focus is on the top 10 sector ETFs and we want to see a new trigger, and for the long-term STAGE analysis to be BULLISH, the short-term TREND to be UP, and overall stock market sentiment to be RISK-ON, whichmeans investors are taking risks and betting on high growth in these sectors.As you will see there have been a lot of great opportunities recently. They are all listed low on the BAN Hotlist software which we post every day for our premium subscribers.The strength of the BAN Trader Pro technology is the ability to catch strong momentum/trend trades in an “aligned” market trend format across various market sectors. We call this the Best Asset Now (BAN) system for a reason. The higher the rankingof the BAN technology, the stronger the potential future trends. When a symbol moves up the BAN Trade Hotlist, it is growing in strength andmomentum. This is where we look for the best BAN trade setups when the stock market gives us a new buy signal fora major leg higher.The additional BAN trade signals that fall below a new major market buy signal, and the end of the stock market trend are power setups for 7-15% moves within a couple weeks of a new trigger. We only want to trade the best assets in thestrongest trends. Our members are given the BAN Trader Pro Hotlist every morning before the opening bell. This allows them to make their own trading decisions using the BAN setups and to execute any valid BAN trade they want when looking for another trade to keep their portfolio working hard for them.Daily & 10-Minute Chart of BAN TradeThis daily and 10-minute chart of the BAN trade trigger that was generated at the end of the trading day as all signals are (EOD).Daily & 10-Minute Chart of BANTradeThis is another BAN trade trigger, generated. Trigger was 21 days ago, its moved up 13.47% and its likely going much higher.2021 is going to be an incredible year for BAN Trader subscribers because of the big trends, high volatility, stimulus,and policies with the Biden administration. The time is now to learn and trade the Best Assets Now using our proven sector rotation strategy. Our BAN Trader Pro technology is proving to be an incredible technology advancement allows us to dominate the generate Alpha. We urge you to take advantage of the BAN Trader Pro technology and prepare for the big trends that should continue throughout all of 2021 and into 2022 and beyond.I am teaching this BAN trading strategy free this week in this 1-hour webinar.Its everything you need to trade this on your own, no proprietary trading tools, or strings attached. Learn this strategy now and join me in this webinarhttps://joinnow.live/s/ClJSoPWe believe everytrader needs an edge to gain an advantage in the markets and that is exactly what we teach and deliver atwww.TheTechnicalTraders.com. After two decades of R&D, and hundreds of thousands of dollars building and testing, we've built the BAN Trader Pro so that we can maintain that edge over the markets and generate oversized annual return on investment.Happy TradingChris VermeulenFounder of Technical Traders Ltd.NOTICE : Our free research does not constitute a trade recommendation, or solicitation for our readers to take any action regarding this research. It is provided for educational purposes only. Our research team produces these research articles to share information with our followers/readersin an effort to try to keep you well informed.
ESG Flows Drive Clean Energy to Fresh Highs

ESG Flows Drive Clean Energy to Fresh Highs

Chris Vermeulen Chris Vermeulen 05.01.2021 00:04
The ESG theme has taken the capital markets by storm in 2020. Fund flows into this space have been relentless, helping to drive the clean energy sector to fresh highs. In the first half of 2020, 23-new exchange-traded funds were launched under the ESG umbrella. By the end of the Q3, ESG index funds hit $250 billion in value. The ESG umbrella focuses on many different areas and has flourished during the pandemic. With a vaccine on the horizon, the question for investors is whether this sector will remain sustainable.What is ESG and ESG InvestingThe term ESG stands for:EnvironmentalSocialGovernanceThe term brings to mind concepts like climate change, diversity and inclusion, and resource scarcity. While these are forms of ESG, it also covers social practices, including labor and talent management and data security and product safety. It includes employee experience, executive pay, and ethics. There is a wide divide amongst stakeholders on what the term means and how to communicate and manage the concept.ESG investing appears to be a derivative of socially responsible investing (SRI), which has been in existence for decades. While profits have always been considered the "mothers milk" of stocks, modern investors have realized that shortchanging stakeholders is a high price for society to pay. A company's stakeholders include its employees, customers, suppliers, as well as the environment, which play a crucial role in the functioning of the corporation.There is a fine line between ESG investing and SRI. ESG investors actively look for companies that show robust environmental, social, or governance attributes. SRI focuses on excluding industries that have failed to demonstrate compliance in socially responsible areas. ESG provides broader flexibility into specific companies' practices and the different management attributes that make up a corporate initiative.Inflows Into ESG Have Been ImpressiveInflows to ESG have been robust. ESG ETFs surged to $22 billion in the first half of 2020, which was more than 3X the 2019 total, according to Bloomberg. One of the issues that regulators face is that there is no clear definition of what constitutes ESG.The Concept is Here to StaySome corporate actions show me that ESG is here to stay. Stakeholders at public companies are getting assurances from management that their contributions will remain an essential aspect of management's focus. In 2020, Starbucks Corp. announced that the company would mandate antibias training for executives and tie their compensation to increasing minority representation in its workforce. Their diversity and inclusion mandate's target is to have 30% of corporate employees be minorities by 2025. While profits at any level are key, it's hard to imagine that an executive will allow their bonus to be eroded by failing to meet a corporate ESG mandate.The Best Asset Now ProcessI have mentioned this before and I have not wavered. I like to use a BAN strategy (Best Asset Now) to find leading sectors. Two ETFs have largely outperformed the rest that conforms to the ESG concept. These ETFs represent sectors that have shown leadership and are currently two of the top-5 best performing ETFs in 2020. These ETFs have generated bullish chart patterns that point to much higher prices following their recent breakouts.There is a reason to be bullish. President-elect Joe Biden named former Secretary of State John Kerry to lead his administration's climate change efforts. Kerry will be the "climate czar" and will be in charge of coordinating programs that are expected to stretch across multiple agencies. This could include executive orders issued by the new President-Elect to provide avenues beyond Congress to advance climate priorities. This is positive news for clean energy ETFs. If you are a stock trader, these are the BAN ETFs to look at which will outperform.*source - https://etfdb.com/compare/highest-ytd-returns/TAN Hits Fresh HighsThe Invesco Exchange-Traded Fund Solar ETF accelerated to multi-year highs in November and is poised to test resistance near the 2011 highs at $91.70. This would add another 11% to its already robust 162% return in 2020. While prices could temporarily consolidate near this $92, a close above this level would lead to a test of the 2010 highs at $115. A close above $115 could lead to a test of the all-time highs near $307. Momentum is positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.*source TradingviewPBW Invesco Exchange-Traded Wilderhill Clean Energy ETFHas broken out and is poised to test the 2008 highs near $119.50. Support is seen near the 10-week moving average of $71.70. Momentum is positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory, which points to higher prices.Be sure to sign up for my FREE webinar that will teach you how to find and trade my BEST ASSET NOW strategy on your own!*source TradingviewDo you want to stay ahead of these sector trends and learn which sectors are the best opportunities for your trades?   Learn how our BAN Trader Pro education and alerts can help you keep focused on the best trading opportunities in 2021 and beyond while helping you protect and grow your wealth.  Go to www.TheTechnicalTraders.com to learn more about BAN Trader Pro, or let me teach you how to trade this strategy yourself by watching my FREE webinar! Scroll below to register for your seat now and make 2021 your year to PROFIT!!I wish you all a healthy and profitable New Year!!
Gold & the USDX: Correlations

2021 May Be A Good Year For The Cannabis/Marijuana Sector

Chris Vermeulen Chris Vermeulen 03.01.2021 17:03
Great progress in terms of legalization was made for the Cannabis/Marijuana sector in 2020 that will.  The 2020 elections resulted in a number of US states engaging in new Cannabis friendly policies and laws being approved by voters. This suggests a new rally in the Cannabis sector may be setting up in 2021 and beyond for traders. Our BAN - Best Asset Now - trading strategy is always looking out for the next sector to make a trade, and the Cannabis sector is certainly one we are keeping our eyes on! Make sure you sign up for my FREE webinar to find and trade the Best Assets Now just like me.Weekly MJ Price Flag SetupMy research and I team believe the recent longer-term bottom in the MJ ETF, the Alternative Harvest ETF, suggests a broad bottom is setting up in the Cannabis/Marijuana sector.  If this bottom in the Cannabis sector continues to profit support for the entire sector, then we may see price appreciation across many individual Cannabis stocks over the next 12+ months.  Additionally, this price appreciation may prompt quite a bit of consolidation across the entire Cannabis/Marijuana sector.The global use and demand for CBD & THC related products may continue to expand as medical and personal use expands across the US and into other nations.  We are still near the infancy of understanding the true medicinal benefits of this all-natural product.  A new upward price trend in this sector may prompt a global expansion/consolidation event where the Cannabis/Marijuana industry attempts to restructure into true global power companies.Our research team is focused on the possibility that an early 2021 price decline in this sector may setup a broad sector bullish trend near March/April 2021 (or earlier).  We believe the process of this longer-term bottom setup will still require another attempt to consolidate near the MAGENTA support channel before a more substantial breakout will take place.  The current bottom setup is very similar to a Bullish Price Flag setup and we believe the next price low may be an area where real opportunity exists for a final bottom in price.Monthly MJ Bottom SetupThe following Monthly MJ chart highlights the same bottom setup on a longer-term chart basis.  Pay very close attention to how much volume has poured into this sector in October and November 2020.  It is very likely that a new price low, below $11.90~$12.00, will setup within 4 to 8+ weeks that will represent the final downside price move before the Price Flag pattern attempts an upside breakout.  We expect to see stronger volume surge into this final bottom as traders load up before the breakout move begins.As we've been suggesting for a number of months, the broader, longer-term market cycles and trends suggest the next 3 to 5+ years are going to be very dynamic for various market sectors.  Our research team believes the US and global markets have just recently started a broad depreciation phase which may last another 5 to 7+ years.  Typically, within these phases, commodities and other sectors rotate in and out of favor as capital is forced to seek out undervalued and potentially explosive sector trends.This bottom setup in MJ may prompt a number of individual Cannabis and CBD suppliers, processors, end-user manufacturers, and technology providers to engage in a series of acquisition and consolidation steps over the next few years if this sector becomes hot fairly quickly.  Rising prices and expectations may prompt this industry into a consolidation and technology/distribution expansion over the next 4 to 5+ years.  Very similar to the DOT COM/Technology bubbles recently, when a sector gets hot, it tends to prompt quite a bit of investment and activity surrounding the growth and consolidation of industrial components and technology.Do you want to stay ahead of these sector trends and learn which sectors are the best opportunities for your trades?  Our BAN Trader trades the Best Asset Now using to consistently earn better-than-market returns.  Learn how our BAN Trader solution can help you keep focused on the best trading opportunities in 2021 and beyond while helping you protect and grow your wealth.  Go to www.TheTechnicalTraders.com to learn more about BAN Trader, or let me teach you how to trade this strategy yourself by watching my FREE webinar! Scroll below to register for your seat now and make 2021 your year to PROFIT!!Happy Trading!
Price Amplitude Arcs/Gann Suggest Stock Market Peak in Early April

Price Amplitude Arcs/Gann Suggest Stock Market Peak in Early April

Chris Vermeulen Chris Vermeulen 31.12.2020 04:04
In the first part of this research article, we highlighted some of W.D. Gann's research, particularly the theory of price vibrations, angles, slopes, and how they relate to future price projections/targets.  We also showed how important it was to understand what price does when it reaches these critical inflection points.  In this second part of our research, we are going to explore Gann time/price cycles and how they relate to our Fibonacci Price Amplitude Arcs.Our research will show you exactly why we believe an early April 2021 peak may be setting up in the US/global markets and why you need to prepare for this now.  We believe the remainder of the bullish price trend may continue to push higher, scaling very close to the CYAN trendline on the chart below over the next 60+ days before starting to break lower as we near the end of March 2021.  Let's explore why we believe this is likely to happen.We highlighted the importance of the CYAN trend line and the multiple Fibonacci Price Amplitude Arcs that are arcing through the recent price range in Part I.  It is our belief that these critical levels represent a major inflection point in the advance of price and that price may continue to attempt to push higher – but may align itself below the CYAN trendline as it inches closer to the early April Gann price/time arc that we believe will set up a major top in the markets.Weekly SPY Chart Showing Key Price Trendline & Time FactorsWhen we apply time-factoring to the SPY chart below, we are inclined to support the theory that a 200% time factor applies to the current market setup from the lows established in 2009.  If we measure price trend and vibration from the 2009 low point, we immediately come to the October 13, 2014 lows – which were subsequently retested multiple times over the next 3+ years (August 2015, January 2016, February 2016).  Our researchers believe these lows represent the end of one cycle/vibration phase and the beginning of another.  By aligning a mirror-image of the original Gann Time-Arcs to the October 2014 lows, we can see that another critical Gann Vibration cycle is likely ending near mid-April 2021 through early July 2021.We believe the next few weeks and months, as well as almost all of 2021 and beyond, will be full of major trend changes and fluctuating price activity as global investors attempt to navigate the changes in the global markets.  Currently, many of the foreign markets are nearing what appear to be peak levels and, if our Gann research is correct, the US stock market is only about 90 days away from reaching the start of another Gann Time-factoring Vibration energy phase/cycle.  This means there is going to be another shift in how investors perceive value in investments and where capital moves to attempt to hedge/profit from this cycle phase.Weekly SPY Chart Showing Key Price Trendline & Time FactorsThis next Weekly SPY chart shows a closer look at the Gann Time-factor arcs and how they aligned with the previous price corrections.  Pay attention to how accurate these Gann Time-factor arcs predicted the downward price “vibrations” over the past three years.  Remember, these Gann phases are a replica of the 2009 bottom to 2014 peak – applied to the 2014 low price levels.  They represent an exact replica of the same price vibrations that took place between 2009 and 2014.  They also show a period of time between April 2021 and July 2021 which may represent a very big, deep vibration in price which may target low price levels near $292 on the SPY.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The bigger question in our minds is “do our Fibonacci Price Amplitude Arcs align with W.D. Gann price/time theories and the Law Of Vibration?”  If so, then our Fibonacci Price Amplitude Arcs may be somewhat close to what W.D. Gann attempted to describe relating to his Law Of Vibration and the universal key to unlocking the secrets of identifying and predicting future price peaks/troughs accurately.  If not, then we are confident they will lead us to even more breakthroughs as we continue to attempt to adapt and improve our technical analysis research.One thing is for certain, 2021 appears to be setting up as a traders market where trends may change very quickly and aggressively.  2021 is going to be a year where traders need to stay ahead of the risks and shifting market cycles to find the best assets to own and profit from.  Our BAN technology was designed specifically to address this issue – always being able to find and identify the best assets to own within any type of trend.Our researchers believe increased price volatility will likely be seen near the end of March 2021 and by mid-April 2021, we may already start to see signs of a broad market decline setting up.  Our research suggests a deep bottom may setup in October 2021 or later.  Are you ready for this type of move in the markets?  If not, learn how BAN can help you trade the best assets by visiting www.TheTechnicalTraders.com.
Bitcoin Rallies Above $28,300 – Is This The Peak?

Bitcoin Rallies Above $28,300 – Is This The Peak?

Chris Vermeulen Chris Vermeulen 29.12.2020 02:58
We hope you enjoyed the brief holiday break... it seems Bitcoin has been busy while the markets have been resting! Bitcoin enthusiasts are adamant that the price rally has just started a parabolic move higher.  From a technical standpoint, this current rally certainly appears to have gone parabolic.  As any trader already understands, what goes up may eventually come crashing downward.My research team and I believe failure at the current highs would represent a clear technical divergence pattern between price and the RSI indicator. Additionally, the current rally that started on December 20 consists of a $10,850 rally phase.  The previous rally that took place from October 20 to December 2 consisted of a $9,200 rally phase.  We believe this current rally phase from December 11 could be a Wave 5 rally (almost equal to the Wave 3 rally range).  If our researchers are correct, this final rally phase could come crashing downward after reaching these peak levels above $28,000.This 4 Hour Bitcoin chart highlights the incredible price rally that has taken place over the past 16+ days – a rally of over $10,000.  It also highlights two very clear price rally phases – creating an A-B-C price wave pattern.This Daily Bitcoin chart highlights the two, almost identical in size, that we believe has created a price peak above $28,000.  It also highlights the technical divergence between price and the RSI indicator in the lower pane.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!We believe this current peak may become a near term top in Bitcoin – possibly resulting in a downward price decline.  Critical support near $18~$20k is still very valid.  If Bitcoin prices collapse from these peaks, we believe the $18k to $20k level will become the next level for price to find support.Overall, this incredible rally in Bitcoin prices before the end of 2020 has certainly proved the Bitcoin skeptics wrong and set the enthusiasts on fire.  At this point, we get to see what happens in early 2021 and if this $28k level will hold up.  One thing is certain, the past 30+ days have shown a massive rally potential in Bitcoin and other Cryptos – is this an excess phase peak or the start of a massive uptrend in 2021?Our proprietary BAN (Best Asset Now) strategy allows us to know which assets are potentially the best performers in any type of market trend.  If you want to learn more about how we can help you with our proprietary tools and strategy then go to www.TheTechnicalTraders.com to learn more. Sign up today to get my daily pre-market analysis of the markets that walks you through the technical indicators of Bitcoin and the major asset classes.Stay healthy!
Bitcoin Rally Similarities – Is This The Peak?

Bitcoin Rally Similarities – Is This The Peak?

Chris Vermeulen Chris Vermeulen 23.12.2020 02:12
The recent rally in Bitcoin is strangely similar to the rally that took place in 2017.  Although the range of price throughout the rally is somewhat different, the structure of price throughout the rally phase is very similar.  Our researchers believe this similarity suggests a peak may be forming in Bitcoin and the big volume on Monday, December 21, 2020, may have represented a “blow-off peak” in price.BITCOIN 2017 PEAK STRUCTUREThe following Weekly Bitcoin chart highlights the three rally phases that took place before the peak level was reached in December 2017. Pay very close attention to the structure you are seeing on this chart and the highlights we've made to help you understand how the price structure is being mirrored in the current rally phase.Initially, we saw a $2100 rally in Bitcoin which setup a peak near $2980 that initiated near March 26, 2017 (the first Green Arrow on this chart).  After, a mild correction took place which setup a deep trough on the RSI indicator (in the lower pane of this chart).  Notice how this deeper low level in RSI set up a momentum base for future trends.  Then, a second rally phase pushed Bitcoin prices higher to $4979 – spanning a rally phase of nearly $3050 (the second Green Arrow). This second rally initiated near July 2017 and was followed by another brief consolidation period.  Lastly, a breakout rally initiated in October 2017 and reached the peak price level on December 17, 2017 near $19,666.Next, pay attention to how the end of the rally phase broke below the support channel on the RSI (in RED) and began a excess phase contraction of over $16,000 (-84%) that lasted until December 2018 (near $3135). Are we witnessing a mirror example of this same type of price action in the current Bitcoin rally?BITCOIN 2020 PEAK STRUCTUREThis next current Bitcoin Weekly chart, below, highlights the similarities between the 2017 rally and the current rally phase.  Although there are minor price range variances related to the size and scope of the different price wave structures, the technical setup is almost identical to the 2017 rally phase.First, the bottom after the COVID-19 decline setup on March 13, 2020 – only about 14 trading days away from the March 26, 2017 bottom.  Next, the initial rally in 2017 consisted of a $2082 (+233%) rally phase whereas the current rally from the March 13 lows consisted of a $6750 rally (+186%) in price.  We believe the similarities in the rally percent ranges align close enough to consider both initial rally phases similar.Next, a moderate price decline setup after that first rally phase which setup a deep RSI low level in July 2020. Remember, in 2017, this first contraction phase ended in July 2017 also – just an odd similarity, or is this something more critical to understand?Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!After this contraction phase ended, in July 2020, another rally phase initiated pushing Bitcoin prices higher by about $3225 (+35.75%) which ended in August 2020.  In 2017, this second rally phase consisted of a $3061 price rally (