Financial Sector ETF Shows Unique Island Setup – What Next?

One would think the Financial Sector would be doing quite well related to the booming housing market and a decline in overall consumer debt and delinquency levels.  Historically, the XLF chart shows that $32 is very close to the 2007 peak levels before the collapse that started in late 2007.  Currently, the February 2020 highs represent a similar price peak level (near $32), and the current upside price trend has stalled near $27.50, which is a very strong resistance level.

XLF Monthly Double Top Warns Of Strong Resistance Near $32

This Monthly XLF chart below shows over 12 years of historical price data to allow our readers to understand the current market volatility and the current Double Top formation near $32.  We’ve also added some trend lines to help you understand the current price channel (CYAN) and the expanding wedge formation (YELLOW) that has setup recently.  The historical price channel (CYAN) shows the XLF is trading near the middle of this channel.  The expanding wedge setup shows a moderately deep downside price capacity if the financial sector falls into a new bearish price trend.

Overall, there are two levels that have the focus of my research team – the $27.40 & $25.05 levels (the horizontal MAGENTA lines).  We believe these historical support/resistance continue to play very important roles as price attempts to rally above the $27.40 level right now. If it fails to establish a bullish rally above this level, then the $25.05 level becomes an immediate support level for XLF.  Below $25.05, the $21 is the next real support level for XLF before even deeper support is sought out.

XLF Weekly Upside GAP Shows The Markets Want To Rally

The Weekly XLF chart below highlights the Island Peak in price recently and the huge GAP in price.  We believe the $27.40 (the upper MAGENTA line) level must continue to hold as support for this continued upside price trend to rally back above $30.  This Island Peak and the Double Top pattern on the Monthly XLF chart suggests the financial sector has already reached a peak price level.  As such, price would have to rally above $32 to prompt a new bullish price trend above the Double Top price levels.

The US Stock markets continue to stay fairly strong recently with the news of the COVID-19 vaccines and future expectations that the US may soon start to resume more normal activities.  We believe the Financial sector may continue to rally higher, but we are still cautious of the current Island Peak setup and the warning from the Double Top pattern on the Monthly chart.  We may see some time of a Christmas rally into early 2021, then experience a completely different market cycle depending on the new President and policies.

The financial sector is uniquely exposed to consumer, retail, commercial, and global credit/debt issues.  We believe the financial sector is a moderately solid “bell-weather” for traders to help gauge future expectations and opportunities.  Currently, the XLF is showing fairly strong potential for upward trending, but big risks are present because of the Island Peak and the huge price gap.

As we move into the 2020 holidays, pay attention to how the markets react to the continued recovery efforts and global banking/policy issues.  The Financial Sector could become a very profitable sector for skilled technical traders. We can help you find and identify great trading opportunities so visit www.TheTechnicalTraders.com to learn about my exciting ”Best Asset Now” strategy and indicators. Sign up now for my daily pre-market video reports that walk you through the charts of all the major asset classes every morning.

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

 

SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend

My researchers and I want to highlight a Weekly chart pattern that is warning of a potential Top/Reversal in the SPY & SPX.  Although the current trend is Bullish and the markets are looking forward to the new year, new policies, and probably new stimulus which normally prompts some type of upward price rally in the markets, we see an “Island Setup” that has continued to form after all the positive COVID-19 vaccine news.

An Island Setup in price is when price moves or Gaps away from a typical price range or boundaries, then stalls.  This type of setup is similar in structure to a Doji Star setup in an “Evening Star” formation.  Similarly, the Doji Star pattern also warns of a possible trend reversal.  Our researchers believe any continued failure to rally at this stage points to a very real downside price reversal setting up in the SPY/SPX. Let’s take a look at some Weekly charts.

SPY ISLAND SETUP

The SPY Weekly chart below highlights the Island Price formation as well as the technical divergence in the RSI indicator (below the price chart).  What interests our researchers is the clear Island price setup outside the CYAN consolidation/FLAG formation.  Either the SPY is going to continue to rally much higher at this point or it is going to fail in this Island formation and fall back to the $320 level.  The more price fails to rally at this stage, the more likely the downside price expectation becomes.

 

SPX ISLAND SETUP

The following SPX Weekly Chart shows a similar pattern with the same RSI Technical Divergence.  Take note of the Double Doji Island setting up recently, and how Double Doji patterns are very indicative of market indecision and potential reversal patterns.  The most important single candle in Japanese Candlestick Theory is the Doji Candle.

We’ve also drawn a Fibonacci Extension range on this chart and want to highlight the 125% Fibonacci Extension (in MAGENTA).  This levels appears to be very strong resistance and could become a make or break price level for the SPX in the future.

Overall, these setups continue to warn of a reversal, but as of right now we don’t have any confirmation that the bullish trend has ended.  We will warn that any future breakdown in price below this Island price formation would be a very clear indication that the bullish trend has stalled and a new downtrend may be setting up.

There is another type of Japanese Candlestick pattern that this resembles, called a Scouting Party. A Scouting Party pattern is established when price moves above resistance, or below support, in an attempt to secure new price highs or new price lows – but fails to hold these price levels over time.  This is also indicative of an attempted price trend that fails and results in a price pullback/correction.

Right now, the market price in the SPY and SPX is “scouting for new support”.  Keep your eyes on the MAGENTA Resistance levels as price continues to try to retain these new highs. If you want us to help you find and identify great trading opportunities, then please visit www.TheTechnicalTraders.com to learn about my proprietary trading systems. You can also sign up for my daily pre-market video reports that walks you through the charts of all the major asset classes every morning.

For a look at all of today’s economic events, check out our economic calendar.

Have a great weekend!

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for readers to take any action regarding this research.  We are not registered financial advisors and provide our research for educational and informational purposes only.

 

Dow Jones E-Mini Futures Tag 30k Twice – Setting Up A Double Top

Sometimes the markets telegraph a key level or future target level in pre-market or post-market trading.  Other times these telegraphed price targets happen during regular trading hours.  Recently, the Dow Jones E-Mini Futures Contracts (YM) generated two unique high price levels near $30,000 over the span of about 6 trading days.

My research team and I believe this “telegraphed high price target level” is a warning of major resistance for traders.  These types of broad market patterns are not very common on charts.  They happen sometimes, but very rarely like this example on the YM chart below.  This Double Top (Tweezers) pattern may be warning that the $30,000 level on the YM could become a major market peak/turning point.  Additionally, the post election rally reached this $30,000 level on the day Pfizer announced the vaccine data, then sold off quite consistently throughout the regular trading session.

TWEEZER TOPS NEAR $30,000 WARN OF STRONG RESISTANCE

Obviously, traders are attempting to redeploy capital into sectors they believe present real opportunities for growth and appreciation.  As we can see from the chart below, the Dow Jones and Mid-Cap sectors appear to be the leading sectors at the moment. We’re not calling for a major top in the market based on this pattern (yet).  We are just bringing it to your attention so you can be aware of the resistance level that appears to have setup near $30,000 on the YM.

The market could blow through this $30,000 level and continue to rally higher or it could stall near the $30,000 level and retrace lower.  Given the situation with the US election and the surging COVID-19 cases throughout the world, it doesn’t take much of an imagination to consider another shutdown related market decline setting up.

If you read our recent article about the US stock market and gold price appreciation/depreciation phases, you will see how my team believes the US stock market entered a depreciation phase in mid-2018 and the current rally in the markets (2019 till now) is an excess phase “blow off” rally in the works. If our research is correct, we expect the excess phase to end at some point in the near future, setting up a broad market correction and/or broad sideways rotation. In the meantime, the rally appears to continue with a near-term target of $30,000 (only 250 points away).

Learn how I can help you find and execute better trades.  I can help grow your trading account with my Swing Trading service and protect your investment account with my long-term market signals service. Visit www.TheTechnicalTraders.com today to learn more!

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategist

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NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for readers to take any action regarding this research.  It is provided for educational and informational purposes only.

 

Gold’s Momentous Rally From 2000 Compared To SPY & QQQ – Part II

In Part I of this research article I highlighted the incredible rally in Gold related to a 2020 Anchor point and how that rally in Gold compared to the QQQ and SPY.  In this second Part I am going to highlight the price appreciation in the QQQ and SPY in comparison to Gold since 2009.  It is important to understand how the equities/stocks have rallied in comparison to Gold because the ratio of valuation levels in equities/stocks compared to Gold appears to show when price disparities become outrageous and begin to revert.

Part I of our research showed the 2000 anchor point ratios, where we saw that Gold appreciated faster than the QQQ and the SPY over the span of the past 20 years.  You’ll also see that the QQQ and SPY have appreciated very quickly over the past 5+ years in an attempt to close the gap.  This represents a shift in how traders view opportunities in different asset classes.

9 TO 9.5 YEAR GOLD DEPRECIATION CYCLE ENDED IN 2018 – WHAT NEXT?

We will now shift the anchor point to January 1, 2009, to see how the markets have reacted to valuations since the downturn created by the Global Financial Crisis.  The starting point is to determine how Gold, the QQQ, and the SPY have rallied since this major event in the global markets, and at what ratio.  Ideally, we would have seen moderately uniform appreciation ratios over the past 10 years. This would mean that traders placed nearly equal enthusiasm for higher valuations in the QQQ, SPY, and Gold. As we will see below, this is not the case.

Taking a look at this first Monthly 2009 Anchor ratio chart below, we see the QQQ is the big winner with a current ratio level above 9.0.  This suggests that the QQQ has rallied over 900% since the January 1, 2009 anchor price.  The SPY has rallied to current levels near 3.9.  This suggests that the SPY has rallied over 390% since the January 1, 2009 anchor point price levels.  Gold has only rallied to levels near 2.1 on this chart.  This suggests that Gold has been ignored as an asset class and has failed to keep up with the rally in the QQQ and the SPY over the past 10+ years.

This chart also suggests that traders focused more on the appreciation and expectations related to the NASDAQ/Technology sector over the past 4+ years as a source of asset growth.  Companies like Amazon, Facebook, Netflix, Microsoft, and others became the “hot symbols”  while the SPY and Gold fell away from investors’ focus.  This has happened before in the late 1990s with the DOT COM rally.  Traders and speculators jumped in on what appears to be a never-ending rally in the technology sector only to be shocked by the eventual collapse of that sector in early 2000.  Could the same thing happen again?

THE DOT COM DAYS ALL OVER AGAIN?

If we were to take a look at a different perspective of this same data in the chart below, using the January 1, 2009 date as an anchor point, the rally in the QQQ compared to the recent rally in Gold takes on a completely different perspective.  This chart shows the appreciation of the QQQ compared to Gold since 2009 has rallied more than 4.60 (460%).  The price of Gold on January 1, 2009, was 883.00 and the current price of Gold is $1875.80.  The price of the QQQ on January 1, 2009, was 29.77 and the current price of the QQQ is 288.40.  This suggests that the QQQ rallied 460% higher than the rally in Gold over this span of time.

This raises an interesting point that the current rally in the QQQ is similar to the extreme highs we saw in early 2000 near the DOT COM peak.  Even though, on the 2000 anchor ratio chart,  the QQQ ratio seems small compared to the 2000 anchor levels, the 2009 anchor ratio chart shows a different rate of appreciation based on the January 1, 2009 anchor point.  The biggest difference is the relationship between the origination points (being near the Global Financial Crisis lows) and the bigger rally in the QQQ compared to the rally in Gold.  What this suggests is that the QQQ has rallied much more extensively than Gold over the past 11 years – which is very similar to the DOT COM rally peak.

A PRECIOUS METALS APPRECIATION PHASE HAS BEGUN

When we take into consideration the 9 to 9.5 year cycles that my research team and I believe represent appreciation/depreciation cycles, we begin to understand that Gold has under-appreciated over the span of time from 2009 to 2018 and that the new cycle of Precious Metals appreciation has just started in 2019.  If our cycle research is correct, this new phase of precious metals appreciation will last until 2028 or so – very likely driving metals prices much higher to close the ratio gap shown on this chart.

We expect the ratio level to fall to levels near 1.60 to 2.50 over the next few years (possibly lower) as the price of Gold rallies faster than the price of the QQQ.  Over time, the QQQ may continue to still appreciate in some form, but that would suggest that Gold would still continue to appreciate at a faster rate to close the gap in the ratio level.

We believe the key ratio high level, shown on the chart above with a dark blue vertical line, may be the valuations peak (at least for now).  It aligns with our cycle interpretation and suggests that the late stage rally in the QQQ from mid-2018 may be a speculative exhaustion rally.  As the QQQ and SPY stay near all-time highs and Gold fails to advance substantially higher, this ratio will not change very much from the current levels.

Take a look at the 2000 Anchor QQQ to Gold Ratio chart from Part I of this research article.  The ratio levels did not start to change until the QQQ and SPY has clearly started to decline in late 2000 to early 2001 and when Gold started to move moderately higher.  Remember, Gold did not really start to break higher and start a real uptrend until after 2003/04 – this is when we start to see the ratio decline at a faster rate.

Currently, with Gold trading near 1892 and the QQQ and SPY trading near all-time highs, our researchers believe we are very close to a peak in the equities/stock market based on these ratios.  We also believe the 2009 Anchor chart ratio would have to fall below 3.5 to initiate a new “change of trend” trigger based on our research.  The current volatility in the markets suggests we will likely see a very wide range of price rotation before any new trends are established (up or down).  But we do see similarities in the current setup compared to the 2000 setup in terms of how the QQQ and SPY have reached lofty ratio levels while Gold has stalled near a base/momentum level.

Should our interpretations turn out to be accurate, we would start to see Gold appreciate higher at a faster rate over the next 2 to 3+ years while the QQQ and SPY potentially enter a moderately sideways or downward price trend (possibly somewhat similar to the 2000 to 2006 QQQ price rotation).

The QQQ Monthly chart below highlights the incredible parabolic upside price trend that has initiated  in early 2020 and how price has extended upward at almost extreme rates on expectations and speculation.  We believe any breakdown of this trend may prompt another 2000~2004 type of sideways market correction resulting in a reversion of the ratios we’ve highlighted in the charts above.  Any downside rotation in the QQQ to levels below 252 will likely breach the middle channel level of this recent parabolic upside price trend and result in the start of the reversion event.

The US elections, new policies and pending US economic shutdown (possibly for 30 to 60+ days as suggested by Joe Biden’s team) will shock the markets if it happens.  We are not fortune-tellers and are not able to clearly see what will happen in the future, but we can tell from the ratio charts and the QQQ chart, above, that very heavy price speculation has driven the markets into an upside rally mode and we are concerned above “how and when” it ends.  It may be that the rally continues for a number of years – or it may already be nearing an end.  Our researchers believe the peak level in 2018 on our ratio chart, after the last 9 to 9.5 year cycle completed, is showing us that the upward price cycle has already likely ended and we are transitioning into a renewed Precious Metals/Gold appreciation phase.

Imagine how powerful it would be for you to be able to trade only the strongest and best-performing assets across the spectrum while being able to take advantage of technical patterns and multiple re-entry triggers.  If you want to learn how we can help you find and identify great trading opportunities, then please visit www.TheTechnicalTraders.com to learn about my proprietary trading systems using my exciting ”Best Asset Now” strategy and indicators. You can also sign up for my daily pre-market video reports that walks you through the charts of all the major asset classes every morning.

Enjoy the rest of your weekend!

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for readers to take any action regarding this research.  We are not registered financial advisors and provide our research for educational and informational purposes only.

 

Gold’s Momentous Rally From 2000 Compared To SPY & QQQ – Part I

My research team and I went off on a wild tangent trying to identify how the markets could react to the recent spike in price activity on Monday, November 9, 2020.  This is the day that Pfizer announced a 90% effective rate with its new COVID-19 vaccine, causing the US stock market to skyrocket higher before the opening bell in New York. As with most pop-and-drops, this incredible upside spike trailed lower for the remainder of the trading day.  My research team was curious if this type of setup presented any real future outcome or trends.  To this end, we focused on the QQQ and the SPY in relationship to Gold.

9 to 9.5 year Gold Depreciation Cycle Ended in 2018 – what’s next?

Gold has been and continues to be a store of value for many around the world. At some times in history, Gold becomes undervalued in comparison to other assets (like stocks, real estate, and other tangible assets).  At other times, Gold becomes more highly valued in comparison to other assets.  This cycle has taken place throughout hundreds of years of history, and is rooted in the changing perceptions of market participants regarding “what/where is true value in the markets”.

When other assets are skyrocketing higher, Gold is out of favor in terms of real demand.  It may still be moving higher in value, but as long as other assets seem to be increasing in value faster than Gold, demand for Gold will diminish.  When most other assets enter a time of great concern or devaluation, Gold and Precious Metals usually begin to see stronger demand as the ratio between Gold prices and more traditional investment assets may be near extremes.

Many precious metals investors rely on the Gold to Silver ratio to measure how fast or slow Gold is appreciating or depreciating compared to Silver.  This ratio can often be used to help pinpoint disparities between real price valuation levels.  In our example, today, we’re using the ratio of the QQQ and SPY to Gold, which asseses more traditional investment asset values in comparison to Gold.

The first Monthly QQQ 2000 Anchor to Gold chart, below, attempts to highlight the past and current ratio levels based on an anchor price level starting on January 1, 2000.  The purpose of this ratio chart is to understand how the price advance in the QQQ over time relates to the price advance in Gold.  The higher the BLUE ratio level, the more valued QQQ is compared to Gold.

The first thing that caught our attention was the very high valuation levels in early 2000.  This suggests that Gold was completely ignored in the late stages of the DOT COM rally when technology and other assets were flying high.  As the DOT COM bubble burst, one would expect the ratio to decline over time.  However, in this case, the ratio continued to decline over a 9 to 9.5 year period – reaching a low point in 2009 (the Global Financial Crisis lows).  This downward trend in the QQQ to Gold 2000 anchor ratio suggests that while the QQQ rotated up and down in a broad sideways trend, Gold continued to appreciate in value.  Throughout this time, from 2000 to 2009, Gold rallied over 215% (from $289.50 to over $931.00).  This appreciation in Gold translated into the declines in the QQQ to Gold ratio on this chart above.

It was only after 2013 that the QQQ to Gold 2000 anchor chart began to rise again.  Interestingly, this really began to take place after the 2011 peak in Gold prices (near $1923.70) and after the US economy really began a more organic growth phase prompted by multiple US Fed QE efforts.  We can see from the chart below that the current peak levels (near 0.60) on this ratio chart are still well below the 1.60 ratio levels from 2000.  Although this may appear to be a weaker ratio trend, remember this chart anchors everything to January 1, 2000 price points.  So this chart reflects the QQQ to Gold ratio based on the origination ratio that existed on January 1, 2000.

COMPARISON OF QQQ, SPY AGAINST GOLD

This next ratio chart below shows the incredible rally in Gold compared to the QQQ and the SPY since the 2000 anchor point.  It is important to understand that these ratios are based on the January 1, 2000 anchor price level and represent the comparative price appreciation/depreciation of these assets from that anchor point.

You can see that the QQQ and SPY were both well under the 1.0 ratio level for much of 2001 through 2013.  This suggests that these assets failed to rally above the 2000 anchor price level throughout this time.  Gold also experienced a brief decline in price below the 1.0 level in early 2000 through 2003, but it quickly started rallying after that point and has continued to extend higher recently.

When we compare the chart below to the one above, we can see that the rally in gold has extended quite a bit further than the rally in the QQQ and the SPY since 2000.  Yet, this brings up an interesting question related to the cycles our research team has identified.  Have we reached a peak level in the QQQ and SPY in relationship to the appreciation of Gold?  Are we entering a new cycle where Gold will continue to appreciate higher compared to the QQQ and the SPY – attempting to recreate a nromalized ratio?

If our research team’s interpretation of this data is correct, the rally in Gold since the 2000 anchor point suggests a new momentum base has established in Gold after the 2011 peak price levels.  This new momentum base, if our cycle research is accurate, suggests a broad market peak in equity/stock assets is setting up another 9 to 9.5 year precious metals appreciation cycle that started near 2019.  This could be an incredible opportunity for skilled technical traders over the next 8+ years if we understand what to expect based on these cycles/trends.

In this first part of our two-part Gold series this weekend, we have illustrated the longer-term cycle patterns that originated from an anchor point in 2000 and the real appreciation in Gold compared to other assets.  In Part II, we will share incredible new information that suggests we are near another 2000-like peak in equities/stocks, suggesting another broad metals rally is just starting and may last another 8+ years.

This does not mean that stocks will collapse or some external event won’t destroy the stock market valuations or the thesis presented.  We are merely suggesting that Metals have established a base level (near 2015) while traders have focused on the equities/stocks recently and ignored metals.  This rally in stocks/equities suggests that metals have under-appreciated compared to stocks/equities. This disparity in price valuations also suggests that either metals will rally to attempt to close the price disparity or that equities will decline or trade sideways while metals attempt to close the gap.

Overall, this is an incredible longer-term cycle setup that traders must keep in focus over the next few years. If this type of cycle repeats like it did after 2000, then Gold may be trading above $5500 per ounce within the next 2 to 3 years and may peak at levels above $10,000 before the peak is reached.

Learn how my team and I can help you find and execute better trades.  We can help grow your trading account with our Swing Trading service, and also protect your investment account with our long-term market signals service. Visit www.TheTechnicalTraders.com today to earn more. If you trade options or are looking to learn more about options trading then please click here to sign up for information on the upcoming launch of our new options courses and our new options signals newsletter service.

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for readers to take any action regarding this research.  It is provided for educational and informational purposes only.

 

Huge Price Gaps To Fill on DJIA, and RUT for November 13

Most traders are focusing on the SP500 and Nasdaq and do not see the next wave of selling that should happen here soon in stocks before they start making new highs.

Chris Vermeulen of http://www.TheTechnicalTraders.com shares this quick trade insight.

For a look at all of today’s economic events, check out our economic calendar.

Pfizer’s Vaccine and US Elect Generate new Capital Distribution

The light at the end of the tunnel shined brightly on Monday, November 9, creating a new dynamic in the equity markets. Pfizer (PFE), the pharmaceutical giant announced the results of its stage-3 trial for its COVID-vaccine, which showed a robust 90% efficacy. US stocks surged, especially many of the value stocks that have been hammered during the spread of COVID-19. Oil prices roared, and small-cap shares rallied, as investors began to reprice stocks. While it will take some time for Pfizer to produce enough of the vaccine to create herd immunity, this may be the first vaccine that has some real success behind it.

Will There Be Enough Vaccine to Create Immunity

The news that a real vaccine could be available in 2020 means business can get back to growing in due time. Pfizer announced that it would be able to produce 50-million doses in 2020, and 1.3-billion doses in 2021. While the company did not take any money from the US government to produce its vaccine, its partner BioNTech SF did receive almost $450 million from Germany.

The US government did agree to pay $2 billion upfront for 100 million doses of the vaccine and an option for another 500 million doses. Additionally, the US will get to decide who gets the vaccine first, which likely means it will provide it to its citizens before distributing the vaccine globally. It also appears that Pfizer will handle the distribution of the vaccine directly and has designed the reusable containers that keep the vaccine at the cold temperatures necessary to store the vaccine.

Sentiment Soars is Several Sectors

The announcement by Pfizer was a huge relief for traders, investors, and business owners who started to buy equities on this positive news. Several sectors outperformed, and some that did not. Hospitality and leisure, transportation, energy, financials, and real estate rebounded sharply. Oil prices rallied 11%, as investors expect a return to travel especially air travel.

Oil demand has been hammered since the onset of the pandemic. According to the Energy Information Administration, US oil product demand is down 11% year over year. Gasoline demand is also down 11% while distillate demand, which includes diesel and heating oil has declined 7%. The biggest drag on oil demand in the US has been jet fuel demand which is down a whopping 45% year over year.

The introduction of a vaccine means that the ravel sector should have better times ahead and oil consumption should recover to pre-pandemic levels. Oil prices have been in a sliding downward sloping range. A close above $44 per barrel, should lead to a test of the $55-60 region. Since many of the US production and exploration companies need oil prices above $50 to make money, a rally back to profitable levels could lead to further gains in the energy sector.

Small-Cap Shares are Breaking Out

Money is piling into the small-cap stocks Russell 2K index. Small capitalized companies are in desperate need of fiscal stimulus, and the end of the pandemic. Small-cap stocks were the best performing of the US indices rising more than 7% at one point on Monday, November 9. Many of the regional banking companies fall under the Russell 2K. The KRE SPDR Banking Index surged more than 15% on Monday. Trading volume in travel and leisure stocks was up 900% on Monday. Small caps have been dormant since 2018, and are breaking out. The IWM ETF completed an ABC correction wave and is poised to test higher levels. This group of stocks could become the next leading stock index, or at least give the Nasdaq a run for its money!

I am looking at some leading sectors using a BAN trading strategy which allows us to outperform the market during major market rallies.

Redistribution of Assets

Monday was moving day. It appears that investors are confident and money is being pulled out of the precious metals sector and dumped into the risk-on assets (stocks). Gold dropped over 5%, and silver down 7.5%. US treasury yields surged higher, with the 10-year treasury yield rising 12-basis points, which was the largest one-day rally since March 2020. Higher US yields helped buoy the US dollar which paved the way for lower gold prices. Gold prices appear to have tested support near the September lows at $1,848 and are oversold on an intra-day hourly chart as the fast stochastic hit a reading of 7, below the oversold trigger level of 20, which could foreshadow a temporary correction.

The news over the weekend that the US had a new President-elect which was followed by the results of Pfizer’s vaccine results sparked a distribution of capital. It’s a big moving day with big winners and big losers.

Concluding Thoughts:

Investors and large institutions are just starting to rebalance and invest their capital. Until there Biden is in the house and there is more details on the vaccine I expect the market to continue making large swings. Risks are still hight overall so stepping into this market lightly is what we are doing for the time being.

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategies
www.TheTechnicalTraders.com

 

Options Trading Specialist Shares His Story and Strategies

Hi everyone, it’s Chris Vermeulen here. Over the years, I have covered a lot about investing, swing trading, and technical analysis in these articles. Today I have exciting news and fresh trading content you are going to love. Many of you trade options around the free trades and setup articles I post, and today options trading will become a big part of the analysis and trading because so many readers keep asking for options.

I have partnered up with an options trading specialist, and it’s time you learn more about who he is and why you need to start trading options with us.

I will let Neil introduce himself, and show you why options are so exciting!

I am Neil Szczepanski and I am an options trader and coach that is teaming up with Chris Vermeulen and the Technical Traders to offer options courses and trading strategies. A little bit about me – I’m a native of Indiana but grew up in Colorado and I’m a big sports fan. When I’m not looking through charts, I’m probably watching a game or coaching sports teams. In addition to watching sports, I like to play them.

I graduated from Central Michigan University with a degree in Economics and Marketing and been a professional in technology for 20+ years. During this time as a professional, I loved to trade and always traded as a hobby. I learned to trade in the late 1980s in a Junior Achievement class in junior high school. In the 1990’s I learned how to trade options and started trading options in 2002. I became interested in options when I learned that I could leverage what small capital I had into large trading positions. I also learned that I could employ a great risk management strategy using a defined risk in options spreads. I discovered that I could sell the rights to stock I never owned and profit off it.

Most people who invest are taught to buy and hold and that can work but in a raging bull market like we have just seen but it is hard to buy at what looks like a market top. This is yet another reason why the time is right to start trading stock options. Whether you are a beginner or experienced in trading options it can be simple in theory but not always easy. Some of the best options trading strategies are some of the simplest. I really like to trade the covered wheel strategy where you can get into long stock positions at discounts and get out of those same positions by selling your position for more than market price.

The first question people always ask me when teaching options is ‘Why do you trade options?’. Here are the 5 reasons why I prefer to trade options over stocks:

  1. MAKE BIG $$ WITH SMALL ACCOUNTS: Options give the average trader more ways to break into the trading world because of how much they are leveraged. A little investment can go a long way with less risk than buying the stock outright. For example, when an underline stock is over $2,000 or even $3,000 a share to control 100 shares becomes very expensive and for some not possible. Conversely, it is possible to control 100 shares for a specific period of time for dollars as opposed to thousands of dollars by leveraging options.
  2. SWING TRADING OPTIONS, THE PERFECT SIDE-HUSTLE: I love teaching and technology and knew early on that these were the things that would drive my career path. At the same time, I have 6 kids to feed so I needed to supplement my income to support my family. I achieved this through swing trading options. This allows me to focus on my career and family while making consistent income without having to be glued to my screen every day as trades last a few days or weeks.
  3. REDUCE RISK: Less risk – yes options can be far less risky than trading regular stock. You can define your risk 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. The most successful traders are good at maximizing their winners, but more importantly, they are even better at minimizing their losses on losing trades.
  4. FLEXIBILITY TO REACT TO MARKET VOLATILITY: You 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 when the underline stock goes nowhere. You get paid for the time that you sell the rights to the stock that you can either own or not own. With stocks you can either buy more or sell and take your loss if the price goes against you, that’s it.
  5. CONSISTENT RETURNS WITH LESS DRAWDOWNS: Consistent return and far less drawdowns can be achieved with options strategies than just buying stock. I usually only allocate 50% or less of my overall account into options positions and achieve better returns than if I invest 100% into stocks. I also don’t have near the drawdowns or the risk that one would take by being 100% in the stock. Holding cash also allows me to pounce on opportunities if a black swan event were to hit I have cash available to buy in while all stocks are on sale. So I can still get a better return, with less drawdowns and be ready to pounce on buying opportunities.

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.

Thank you, Neil, for sharing this information. I am very excited to add proven options strategies to our trading accounts and to post more educational articles here about how to trades options!

Well, that is all for now. We will share Neil’s next article and walk you through some winning strategies in our next post!

Sign up now to receive information about all things options… and if you want to see how Neil can help you make money and answer all your questions, visit: https://www.thetechnicaltraders.com/ots-cyhuo/

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Founder & Cheif Market Strategist
www.TheTechnicalTraders.com

 

Silver Junior Miners Reach Flag Apex as Divided Government is Confirmed

In the wake of the US general election, which was one of the biggest American political events in history, there is one result that seems clear cut. As of November 5, two-days post-election day, a divided government appears to be in the cards. The rally in riskier assets, and the selloff of the US dollar, reflects a market that had priced in a “blue wave”, and is now unwinding that trade.

While not all the states have counted all of their votes, it appears that there are enough Senate seats confirmed that show Republicans will hold one chamber of Congress. With this fundamental backdrop, I strongly believe in several stocks that will continue to outperform including the Silver Junior Miner ETF (SILJ).

The SILJ is forming a bull flag pattern on a monthly chart that is a pause that refreshes higher. The 10-month moving average has recently crossed above the 50-month moving average which means that a medium-term uptrend is currently in place. There is solid support near the 10-month moving average near $12 and resistance near the 2020 highs, which is the apex of the flag pattern is seen near $17.21. I believe that a breakout is pending now that there will be a divided government regardless of who wins the presidency.

My target is based on a Fibonacci price extension (100% measured move) to the rally from the COVID-19 lows to the recent highs and extends that range from the September 2020 lows. By using this Fibonacci extension I have identified $20 and $25.32 as my upside price target for any potential breakout.

You can see me talk live with Nicole Petallides on TV where I covered silver miners, the charts and why they are primed and ready for a 40-70% gain from here.

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The impetus that will drive the SILJ higher is a decline in the US dollar and the view that global growth will slowly return despite the acceleration in the spread of COVID-19. The dollar index is forming a weekly bear flag pattern which is a pause that refreshes lower. With all of the fanfare focusing on the election, many investors have ignored recent weaker than expected US economic data. Private payrolls came in worst than expected and the more forward-looking ISM services report showed a decline in sentiment. The US 10-year yield has dropped 15-basis points since the election and is currently trading near 75-basis points down from 90-basis points on Tuesday, November 3. As the yield differential moves against the US dollar, silver as well as the SILJ should gain traction.

One caveat is that if riskier assets like equities drop, metals and mining stocks will also fall. This is an impulse contraction in price that occurs because of risks and fear, but it is very real. From July 2018 to June 2019, SILJ contracted almost 40%. This is an important risk component to consider when reviewing the current setup in SILJ.

In July through August 2018, the price of silver was kept down given that that the US Federal Reserve continued to raise interest rates – eventually prompting a -20% price collapse in the SPY starting near October 1, 2018. SILJ lead this move lower and didn’t bottom until June 2019 – when the SPY had recovered to near all-time highs. Thus, this setup in SILJ does include a fairly strong measure of risk which should be mitigated following an election that has ensured a divided government.

This Weekly SILJ chart, below, continues to form a bull flag continuation pattern which is expected to test resistance near the 2020 highs at $17.21. Our research team believes that this critical resistance level, once breached, will likely prompt a moderately strong upside price trend in SILJ. Failure to breach this level will likely result in a continued flagging price formation attempting to retest the 30-week moving average which is robust support near $13.00.

Please review the data we’ve provided within this research post before making any decisions. There is a moderately high degree of risk associated with this current Pennant/Flag setup. Having said that, we do believe that a breakout or breakdown move is very close to initiating and we believe the critical level to the upside is the $15.05 resistance level. Traders should understand and acknowledge the risks associated with this setup, and also understand that any breakdown price event could be moderately dangerous with quick price action to the downside.

We believe there are a number of great opportunities setting up in the markets right now. Various sectors and price setups have caught our attention – this SILJ setup being one of them. We believe the next 6+ months will present some great trading opportunities for those individuals that are willing to “wait for confirmation” of the trade entry. The one thing we’ve tried to make very clear within this article is this “setup” is not a trade entry trigger. There is far too much risk at this point for us to initiate any entry or trade, and we will make the call to trade once we have the signals we seek. Confirmation of this trade setup is pending – but it sure looks good at this point.

Chris Vermeulen

Chief Market Strategist

www.TheTechnicalTraders.com

Are Junior Silver Miners Setup For A Big Rally?

Last week, we published a research article on Silver Junior Miners that garnered quite a bit of attention. We received quite a few positive comments and questions from our friends and followers. This time, we wanted to dig a little deeper into the cycles and price setups that are currently setup in the Silver and Junior Silver Miners ETFs. It may seem odd to some readers, but we believe the uncertainty related to the US election and US policy over the next 6+ months could present a very real opportunity for skilled technical traders.

First, if you missed the previous analysis and trade idea in the Silver Junior Miners article from November 2, please follow this link to review our earlier research which has some important points you should know.

That research article from November 2 suggested a Pennant/Flag formation on the longer-term Monthly chart would prompt a large upside price move once a potential “washout low” pattern setup. The election day trend in Gold and Silver prompted Silver Miners to move a bit lower – which is what we suggested would happen in the November 2 article. Now, we’re going to highlight two incredible longer-term setups in Silver Miners that may result in almost immediate profits over the next 4+ months.

Weekly Silver Miners Chart

This first Weekly SILJ chart highlights a “100% Fibonacci Measured Move” process that is likely to take place in the near future. The current support level near $13.00 suggests a momentum base level has established in Silver Miners. If a 100% measured move takes place, mimicking the move from the COVID-19 lows to the August 2020 highs, it is very likely that the next upside price move in SILJ may rally to levels above $24.00 to $25.00. This represents an 82%+ price advance over 3 to 4+ months.

Monthly Silver Miners Chart

This next Monthly chart highlights the SPX500 to Silver ratio (in BLUE with the scale on the RIGHT EDGE of the chart) and shows the historical Silver price level (in GOLD with the scale on the LEFT EDGE of the chart). The important factors on this chart are the 15 year cycle events, highlighted near the bottom of the chart, and the breakout setup that appears to be taking place right now between the price of Silver and the SPX500 to Silver ratio.

First, the Breakout ratio. This ratio of the SPX500 divided by the price of Silver shows that, throughout history, a roughly 15 year advance/decline cycle oscillates between a peak in Silver prices to a peak in SPX500 prices. In 1979~1980, the peak price of Silver rallied to levels near $36. Then, silver fell out of favor as the US stock market rally took hold in 1986~1988. Recently, the peak price level in Silver in 2011, near $49.00, prompted another price breakout event which was similar to the one in 1977.

We believe another breakout event is pending as global market uncertainty and global debt levels continue to weight heavily on Precious Metals. The recent breakdown of the BLUE ratio level as well as the upside breakout/rally of Silver suggests an early phase breakout is setting up. If this research is correct, an extended price rally may take place over the next 4~5+ years in Silver that will prompt the ratio level to fall back below 60~75. We believe the upside breakout event could happen at any point over the next 3 to 6+ months and may last for a period of 6 to 18+ months before reaching a peak.

Our researchers believe the ultimate upside peak level for Silver throughout this breakout rally may be somewhere above $65per ounce. This level is based on historical rally events and the location of the current Silver price momentum base (near $13).

Concluding Thoughts

Overall, the cycle event suggests the peak level may extend well into 2026~2028. So, in an extreme cycle event, we may see a massive price rally that does not peak until 2026~2028. We can’t imagine a price level in Silver that extends upward from the current base level to reach lofty peaks that far out. Although we can safely guess that this extended breakout rally may likely prompt Silver prices to breach the $100 per ounce level at some point.

All of this research is longer-term in nature, so please understand that we are waiting for a confirmed longer-term trigger to initiate these setups. The washout low pattern currently taking place after the Apex of the Flag/Pennant formation is a very solid trigger. If we were to start to see a rally in Silver prices before the end of 2020, we would likely see the Ratio trigger confirm very early in 2021. Once this happens, we would be foolish not to pay very close attention to this trigger because is has proven to be very accurate historically.

I hope this analysis assists you in finding and executing better trading decisions. I use a BAN trading strategy (Best Asset Now) to find these setup, and have a few more that should give buy signals this week or next. It is a very powerful way of finding the next market leaders.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

Disclaimer: Our free research does not constitute a trade recommendation, or solicitation for our readers to take any action regarding this research. It is provided for educational purposes only. Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.

SPY Channeling Lower Ahead of Nov 3 – Watch for this Support Today

From a simple technical standpoint, we’ve seen a number of recent breakdowns in the SPY related to Fibonacci Price Theory and Price Gap Theory.  One of the most critical components of the recent 60+ days price activity in the SPY is the failed new high on October 12.  This failed attempt to rally above the previous high price level, near 358.82, suggests a broader market price decline has setup (a downtrend).

SPY 240 MINUTE CHART

After the failed new high peak on October 12, a series of new downside price gaps can be seen in the SPY chart below as price accelerated downward.  These unfilled price gaps represent price acceleration to the downside and will eventually exhaust – creating a new momentum base/bottom.

I believe the support level near 319.85 is a critical level for price going forward.  The downward price trend suggests this 319.85 level could be targeted very quickly.  The November 3 election day, and the post-election price volatility, could put this critical price support level near the top of everyone’s charts over the next few days.

SPY DAILY CHART

My researchers and I believe the upside “island price level” that has set up on November 2 is likely to prompt a downward price move near resistance at 330.25.  This type of upward gapping price “island” is indicative of a Three River Evening Star type of setup – which is typically indicative of major resistance and suggests further downside price action may unfold.

You can clearly see the Doji bar on the right side of the following Daily SPY chart below the most recent downside price gap near 333.10. The rejection of the rally in price on this bar suggests a real battle for control of trend is taking place. When a Doji forms above the previous candle’s real body, it suggests key resistance is found near the real body of the Doji.

Our researchers believe broader market weakness may become a real factor after the elections pushing price lower to retest the 319.85 support level.  Skilled traders should be warned that the 319.85 level represents a key low price level that created the Monthly Dark Cloud Cover pattern we have been suggesting all readers pay attention to.  If price blows below this 319.85 level, we may enter a new phase of downward price trending.

Ultimately, we believe the markets will attempt to find support and stage another attempt at new all-time highs – but that may not happen before a wash-out low price rotation takes place after the US elections and after the new COVID-19 issues subside.  Right now, traders need to stay very cautious of any potential breakdown risks.

Learn how my team called the Dark Cloud Cover pattern over 30 days ago and how we can help you find and execute better trades.  We can help grow your trading account with our Swing Trading service and protect your investment account with our long-term market signals service. Visit www.TheTechnicalTraders.com today to earn more.

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for readers to take any action regarding this research.  It is provided for educational and informational purposes only.

 

Silver Junior Miners Reach Flag Apex Just Before US Elections

Heading into what will likely become one of the biggest events in American political history on November 3, the US stock markets are holding up quite well on Monday, November 2.  My team and I have published a number of articles recently suggesting we believe wild price swings and increased volatility is to be expected before and after the US elections.  We have even suggested a couple of stock trades that we believe should do fairly well 60+ days after the elections are complete.  Right now, we want to bring your attention to the Silver Junior Miners ETF (SILJ).

The current Pennant/Flag formation that is setting up in SILJ on the following Monthly chart has peaked our attention.  Diminishing volume and moderately strong support above the $12 price level suggest key resistance near $15.05 will likely be retested as metals and miners continue to attract safe-haven capital after the elections.  The Apex of the Pennant/Flag formation appears to be nearly complete – a breakout or breakdown move is pending.  We believe the uncertainty of the elections will prompt a possible breakout (upside) price trend in the near future.

When we apply a Fibonacci price extension (100% measured move) to the rally from the COVID-19 lows to the recent highs and extend that range from the September 2020 lows, we can identify a $20.35 and $25.32 upside price target for any potential breakout move.

The key to understanding the potential of this setup is to ask yourself if you believe an increased wave of fear and uncertainty will exist shortly after the US elections and to ask yourself if the renewed surge in COVID-19 cases will drive investors away from stocks and into safe-haven investments?  If you believe this is true, then metals and miners should be on your radar.

One thing we would like to make very clear to you is that metals and miners tend to contract as stock markets collapse.  This is an impulse contraction in price because of risks and fear, but it is very real.  From July 2018 to June 2019, SILJ contracted almost 40%.  This is an important risk component to consider when reviewing the current setup in SILJ.  In July through August 2018, the price of silver was kept down given that that the US Federal Reserve continued to raise interest rates – eventually prompting a -20% price collapse in the SPY starting near October 1, 2018.  SILJ lead this move lower and didn’t actually bottom until June 2019 – when the SPY had recovered to near all-time highs. Thus, this setup in SILJ does include a fairly strong measure of risk for any moderate downside move if the markets fall precipitously after the US elections.

This Weekly SILJ chart, below, highlights what we believe is a clear breakout resistance level near $15.05.  Our research team believes that this critical resistance level, once breached, will likely prompt a moderately strong upside price trend in SILJ.  Failure to breach this level will likely result in a continued flagging price formation attempting to retest the $11.00 support levels.

Please review the data we’ve provided within this research post before making any decisions.  There is a moderately high degree of risk associated with this current Pennant/Flag setup.  Having said that, we do believe that a breakout or breakdown move is very close to initiating and we believe the critical level to the upside is the $15.05 resistance level.  Traders should understand and acknowledge the risks associated with this setup, and also understand that any breakdown price event could be moderately dangerous with quick price action to the downside.

We believe there are a number of great opportunities setting up in the markets right now.  Various sectors and price setups have caught our attention – this SILJ setup being one of them.  We believe the next 6+ months will present some great trading opportunities for those individuals that are willing to “wait for confirmation” of the trade entry.  The one thing we’ve tried to make very clear within this article is this “setup” is not a trade entry trigger.  There is far too much risk at this point for us to initiate any entry or trade, and we will make the call to trade once we have the signals we seek.  Confirmation of this trade setup is pending – but it sure looks good at this point.

Are you ready to find and execute better trades in 2021 and beyond?  Can our research and trading team help you develop greater success?  We follow the markets and share our proprietary research so you can become a better trader. Visit www.TheTechnicalTraders.com how we can help you cut your trading research, teach you how to spot the opportunities and setups we see, and generally stay ahead of the market.

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for readers to take any action regarding this research.  It is provided for educational and informational purposes only.

 

Market Breakdown May Extend Deeper If Support Is Broken

The breakdown in the markets last week may have caught some traders off guard and resulted in a few stressful days.  As much as we want to tell you the selling is over, my researchers and I believe the selling may continue for a bit longer as the election and uncertainty related to COVID-19, global economics and post election stimulus and US government issues continue to plague future growth expectations.

We’re presenting these custom index charts today to help you understand where key support levels are in the broader market and to help you understand what to expect if this selling continues.  Over the past few weeks, we’ve published a number of research articles that provide important background and context to this article, including what we see in store for prices of Gold and Silver.

One of the tools we use, in conjunction with our proprietary indicators, price modeling, and trading systems is our Custom Index charts.  These charts help us to gauge and understand market price activity as well as to help quantify the scale and scope of recent trends.  For example, we use these charts (and others) to better understand where, when, and how the underlying facets of the markets are shifting.  Often times, this allows us to see how the mechanics of the markets are working before the outcome really starts to become evident.

CUSTOM VALUATIONS INDEX

The first chart we will look at is the Custom Valuations Index Weekly chart, below.  It is designed to show us how and where price valuations levels are trending.  Pay attention to the Double-Top pattern that recently set up near 520 and the Pennant/Flag formation that Apexed in early September.  Notice how that setup prompted a moderately stagnant few weeks of sideways trading before the broad market breakdown started to trend.

One interesting facet about this chart is that it actually started to break down very hard five weeks ago.  Think about that interesting facet for a minute.  The markets were rallying just 3 weeks ago and many traders were jumping back into the markets expecting the rally to continue.  But our Custom Valuations Index chart was suggesting the markets were continuing to weaken.  Then came the breakdown over the last 2+ weeks

CUSTOM US STOCK MARKET INDEX

This next chart shows the Custom US Stock Market Index Weekly chart and clearly shows the new recent high price level (just three weeks ago) has completely broken down at this point.  When we take into consideration the Custom Valuations Index chart and this Custom US Stock Market chart, we start to see a broad market picture that suggests selling may continue to attempt to reach the support levels we’ve drawn on these charts.  If the US elections and post-election global market event prompt more fear and uncertainty, then we see only one process taking over – price revaluation.

We believe support levels that we’ve highlighted on these charts will likely prompt some moderately strong attempts at supporting a bottom/base in the markets.  But the downside risk depends on the actions taken by traders and governments related to the fear and uncertainty that may permeate global market sentiment.

Take another look at the Custom Valuations Index Chart, above, and focus on the two lower support levels.  Both of these price levels from late 2019 and early 2020 as key support levels.  Thus, our Custom US Stock Market Index chart suggests support may be found near 775 or 655 – these represent levels on this Custom US Stock Market Index Chart that correlate to the Custom Valuations Index Chart support levels.  We’ve translated the levels from the Valuations chart to the US Stock Market chart.

CUSTOM SMART CASH INDEX

Lastly, we also pay close attention to the Custom Smart Cash Index Weekly chart below.  It shows the “true price peak” in January/February 2018 and shows how the recent price highs on the Custom US Stock Market Index chart were really “false highs” resulting from an “excess phase” in the markets.  This happens when speculators and outside events prop-up the market price levels while true organic growth stalls.  That is what we believe the Custom Smart Cash Index chart is showing us (compared to the Custom US Stock Market Index chart).

When the Custom Smart Cash and Custom US Stock Market Indexes are moving in unison, then we are seeing true organic economic and price growth.  When they diverge, as you can see in these two examples, we believe a different type of market phase has setup.  In this case, an “Excess Phase” setup in early 2019 (just after the US Fed reversed course after an ill-fated rate increase in October 2018).  That is what we believe started the current transition in the markets and what is now, potentially, ending.

Support levels on this Smart Cash Index chart suggest 155, 143 and 136 are critical support areas for the market.  Below these levels on this chart, the markets may attempt to retest recent COVID-19 lows. On the SPY, these support levels translate to : 320.25, 299.00, and 278.50.

We believe this week will be very volatile and wild because of the US Presidential elections.  We believe the recent breakdown in the markets, as you can see on these charts, needs to find immediate support above $299 on the SPY – quickly.  If this does not happen, then we may be entering a much broader downside market trend.

We highlighted a Dark Cloud Cover pattern on the Monthly SPY chart about 35 days ago which has now confirmed.  There have been instances where this type of topping/sell signal pattern is immediately reversed by a strong rally, but right now we are uncertain that is likely to happen.  Too many factors are aligning to suggest a broader downside move is pending.

Still, we understand the real risks of the market and also understand that by the time early 2021 trading starts to unfold, many of these concerns will likely be behind us.  Our predictive modeling systems are suggesting a moderately strong Christmas rally is likely to close our 2020.  This, we may see a very quick downside move followed by a moderately strong Christmas recovery.  Therefore, we are eager to see how the next few weeks and months play out as we see many incredible opportunities for traders on the horizon.

If you want to survive trading these markets then you learn fairly quickly how important it is to protect against risk and to properly size your trades.  My research team and I are here to help you find better trades and navigate these incredibly crazy market trends. We can also help you preserve and even grow your long-term capital with our signals that tell you when long-term trends are starting and ending. Don’t wait until it is too late – find out more at www.TheTechnicalTraders.com.

For a look at all of today’s economic events, check out our economic calendar.

Stay safe and healthy!

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for readers to take any action regarding this research.  It is provided for educational purposes only.

Precious Metals Prepare For Another Price Advance

As we continue to near the November 3rd election day, Precious Metals have continued to trade within a narrow range suggesting price support is staying strong. It is my belief that potential downside risks for Gold and Silver will be relatively short-lived after the election.  We believe the broad market decline witnessed on October 26, 2020, where the Dow Jones fell over 700 points, coupled with the fact Gold and Silver barely budged throughout the selloff, suggests support for Precious Metals has reached a “battle line”.

My research team has highlighted the current support and resistance price levels for both Gold and Silver on the charts below.  We believe the initial support levels will hold up well throughout the pending election and that an upside breakout in both Gold and Silver are likely outcomes after the elections.  Global traders and investors have already likely hedged their portfolios accordingly to attempt to eliminate risks, yet the fear of what is not known is one of the main drivers of appreciation in Precious Metals.

When the global markets become unsettled and traders/investors are unable to see clearly and identify a forward perspective, then Precious Metals start to shine. We explored this relationship last month in our article entitled Gold & Silver Follow Up & Future Predictions For 2020 &2021 Part I and Part II.

GOLD SUPPORT NEAR $1885 MAY LAUNCH NEW WAVE OF APPRECIATION

The Daily Gold Futures chart below highlights the current Support and Resistance areas.  We believe the current Support level is rather solid and that Resistance will be tested and broken on or after the November 3rd election day. If this were to occur, we would expect this to prompt a rally back above $2050 or beyond.  Ultimately, the recent lows near $1850 will attempt to act as a hard price floor for Gold, yet we believe the current price activity suggests major support near $1885 is quite strong and may propel an upward price advance soon.

SILVER SUPPORT NEAR $22.50 MAY PROMPT STRONG RALLY

The following Daily Silver Futures chart also highlights the Support and Resistance levels we’ve identified for Silver.  They are very similar to the levels on the Gold chart, yet the Silver chart has also set up an upward sloping lower price channel that suggests price appreciation is already taking place in Silver.  It is important to understand how the relative price change between both Gold and Silver creates a “ratio” that is followed by many traders (see the last chart in this article).  We believe the Gold to Silver ratio will likely fall below 60 fairly quickly after the elections in November – prompting both Gold and Silver to rise substantially.

GOLD-TO-SILVER RATIO SHOWS UPSIDE POTENTIAL

This Weekly Gold-to-Silver Ratio chart highlights our expectations related to the advance of both Gold-to-Silver near and after the US elections.  Check out our previous research on the Gold-to-Silver ratio that explains this important indicator in more detail. Pay attention to how the peak in Gold-to-Silver in 2011 drove the ratio level to a bottom near 43.  We don’t believe that type of move is setting up quite yet, but we do believe a move below 60 in the ratio is likely after the November elections.  This suggests that a $650+ rally in gold and a $16+ rally in Silver are very strong potentials if our modeling is accurate.

My team and I have already identified the trigger confirmation setups that we need to see before initiating any new trades in Precious Metals.  We believe we already know how these future rallies will take place and the setups with the best entry points.  The opportunities for traders after the elections are forming now if you know where to look for them. Join the Technical Trader research service today to get the pre-market video report delivered to your inbox every day, which will walk you through the charts of gold, silver, and other assets as well as potential trade setups.

For a look at all of today’s economic events, check out our economic calendar.

Stay safe and healthy,

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

NOTICE AND DISCLAIMER: 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 and is not intended to be acted upon.  Please see your financial advisor before making any trading or investment decisions.

Four Stocks To Consider Buying Before The US Elections

Our research team put together this list of stocks to help you understand how to attempt to target strategic gains between now and 30 to 60 days after the elections. If you have not been paying attention to what is happening in the markets right now, be sure to read to the end of this report.

If you have not already prepared for the election event, and the pending chaos that is likely to happen after the elections, you better start doing something to protect your portfolio right now. Leaving your portfolio exposed in the moderate to high risk sectors in your IRA or 401k could result in some wicked risks to your total capital if you are not cautious.

ARE YOU READY FOR A VOLATILTY SPIKE AND THE RISKS TO YOUR PORTFOLIO?

Personally, I’ve been getting calls from my family and friends over the past few weeks urgently asking me “what should I do with my retirement money?” and “how should I protect my assets before the elections?”. My family knows if they do nothing to protect their capital, the could be exposed to a -20% or -30% draw down if the market moves lower after the election. We don’t know of anyone that wants to ride out another -20% to -30% correction in the markets – right?

Well, if you are interested in taking a small portion of your capital and attempting to profit from these four simple stock picks we’ve identified, you may feel quite a bit better about how you managed your capital throughout the election event and over the next 30 to 60+ days.

First off, each of these symbols targets key benefits we believe will take place (or have a moderately high likelihood of taking place) after the elections. Secondarily, each of these symbols has setup a very clear technical pattern that suggests “the bottom is in”. Lastly, we’re only including FOUR symbols that we feel are properly hedged for risk – we’ll explain everything in more detail as we go through each symbol. Each of these chart will show very clear support levels in BLUE on each chart. Use your best judgment to identify proper stop levels for each of these setups. You must allow room for the trade to mature and initiate a rally attempt in order to secure the profit potential. It should be fairly easy to see the opportunities in each of these picks. Let’s get started.

American Airlines: AAL Weekly Chart

Airlines are going to benefit from the stimulus package that will be secured shortly after the elections. One way or another, the US government must support essential transportation services through any extended economic shutdown or further COVID economic collapse. There will be some rescue package for the airline sector, we believe, within 30 days after the elections.

The basing support level, shown by the lower BLUE line on this Weekly chart, highlights the upward price trend that we believe support another attempt at a price breakout (higher). We believe the news of a stimulus package that supports an Airline rescue plan will prompt a moderately strong upside price move that could target +35% to +65% levels from the current $12.72 price levels. Ultimately, key resistance exists near the $28.50 level. Therefore, we believe this resistance level will act as a major future price ceiling going forward.

Aurora Cannabis: ACB Weekly Chart

The cannabis sector may benefit from a change at the state and local government level. The extended basing support level and Pennant/Flag formation, shown by the lower BLUE lines on this Weekly chart, highlights the upward price trend that we believe supports a price breakout attempt (higher). We believe the potential for ACB to begin a new rally will initiate shortly after the US elections and will prompt a moderately strong upside price move that could target +115% to +235% levels from the current $4.88 price levels. Ultimately, key resistance exists near the $32.76 level. Therefore, we believe this resistance level will act as a major future price ceiling going forward.

General Electric: GE Weekly Chart

General Electric Company may benefit from any new infrastructure plans related to new policy/plans on the federal/state level. The extended basing support level and Pennant/Flag formation, shown by the lower BLUE lines on this Weekly chart, highlights the upward price trend that we believe supports a price breakout attempt (higher). We believe the potential for GE to begin a new rally will initiate shortly after the US elections and will prompt a moderately strong upside price move that could target +25% to +55% levels from the current $7.39 price levels. Ultimately, key resistance exists near the $18.05 level. Therefore, we believe this resistance level will act as a major future price ceiling going forward.

Silver Miners Juniors: SILV Weekly Chart

Junior Silver Miners are the “Hedge Trade” component for this simple portfolio. We believe Silver and Silver Miners will initiate a new upside price rally very shortly after the US elections and we believe this trade is an efficient “hedge” to the risk associated with the other three symbols in this simple portfolio. The extended basing support level and Pennant/Flag formation, shown by the lower BLUE lines on this Weekly chart, highlights the upward price trend that we believe supports a price breakout attempt (higher).

Silver miners should perform well once the price of gold starts a new uptrend and starts to rally towards $2200 price level. Fibonacci extension measured moves allow you to forecast where gold should rally to next as shown in this Sept 23rd article. We believe the potential for SILJ to begin a new rally will initiate shortly after the US elections and will prompt a moderately strong upside price move that could target +35% to +65% levels from the current $14.98 price levels. Ultimately, key resistance exists near the $32.95 level. Therefore, we believe this resistance level will act as a major future price ceiling going forward.

Concluding Thoughts:

We hope you find the value in these four simple picks we have presented and understand how you can help to protect your investment portfolio by allocating a small portion of your portfolio into these opportunities. There is no guarantee that these picks will rally as we expect. There is no guarantee that the COVID-19 infections won’t skyrocket again – potentially shutting down the global economy again. You have to use your skills and abilities to manage these trades ON YOUR OWN. We are just showing you four potential trade setups that we believe have a strong likelihood of initiating an upside price move near or after the US elections. We hope you strongly consider the message we are trying to convey to you – protect your assets and prepare for extended volatility.

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen

Chief Market Strategies

www.TheTechnicalTraders.com

 

A Wall of Worry Provides a Great Buying Opportunity for NFLX and SNAP

For a bull trend to perpetuate it occasionally needs to climb a wall of worry. Bearish investors are always on the lookout for a theme that will provide them with an opportunity to short a stock or sector. If prices rise, investors who shorted-shares will need to cover, perpetuating the bull-trend rally. This concept has recently played out when it comes to large-tech and communication stocks which have seen their stock prices temporarily decline as regulatory scrutiny has become the next wall of worry.

Congress is Always Looking to Flex in Muscles

Congress always needs a whipping boy. Social media outlets continue to be the target of congressional frustration and more recently have been drawing the ire of several oversight committees. Most recently, Facebook and Google have been accused of engaging in anti-competitive, monopoly-style tactics. The House of Representations antitrust panel found during a 16-month investigation that these two companies relied on dubious, harmful tactics to achieve their dominance in web search and social networking. The Department of Justice announced on October 20, that it will file an antitrust lawsuit against Google.

Social media platforms, like Facebook, and Snapchat,  have repeatedly found themselves in the United States government’s crosshairs as their power has continued to grow since the 2016 elections. Social media companies have no designated oversight authority that regulates their activities.  If these companies get slapped with new rules, regulations, and fines it could trigger a broad market selloff for stocks. This fear has recently been priced into some of the more attractive large-cap tech shares which have provided an excellent buying-point within a long-term bull trend.

Buying Opportunity in Snapchat

Snap Inc, is an American company and maintains several products and services, namely Snapchat, Spectacles, and Bitmoji. The share price is in the midst of a bull trend but recently pulled-back into oversold-territory as the wall of worry gained traction. SNAP is scheduled to release quarterly earnings results after the closing bell on October 20, 2020. The social media concern is expected to report earnings per share of  $-0.05 versus $-0.04 a year ago, on revenue of $549 million. Analyst estimates of SNAP’s earnings have remained unchanged over the past 30-days, and the company is expected to begin turning a profit in 2021.

From a technical analysis perspective, SNAP share price is in a strong uptrend as seen on the combo chart of the 30-minutes and daily chart provided. I see SNAP with potential measured move using a Fibonacci extension to reach $39 per share before the year-end.

Notice the oversold zone on the SNAP chart shaded lime green. That is the first oversold pullback after a new trend takes place. The 30-minute price chart saw both an RSI below 30 and a fast stochastic below 20, which is an ideal low-risk entry point. The daily chart of SNAP also shows that the share price is fast approaching its all-time high which occurred right after its IPO. A break of this level will lead to an acceleration in price to its target Fibonacci level near $39 per share.

Netflix Has its First Oversold Pullback in a Fresh New Uptrend

I believe that Netflix’s business model of providing subscriptions to streaming entertainment is benefitting substantially from COVID-19. The company is scheduled to report financial results after the bell on October 20, 2020. The company is expected to deliver earnings per share of $2.13 versus $1.47 per share a year ago. Revenue is forecasted to rise to $6.38 billion.  The average earnings per share estimate have climbed slightly more than 1% during the last 7-days. Growth estimates are expected to expand by nearly 45%. Global subscriptions are forecast to rise sharply higher as the U.S. unemployment rate surged and more people were stuck at home during the pandemic.

The technical picture shows that NFLX recently dipped as the wall of worry drove prices down temporarily. NFLX is in a fresh new uptrend and just had its first oversold zone pullback. The 30-minute chart reflects a decline where the fast stochastic printed a reading below 20 representing an oversold situation. A breakout of the tight range capped by resistance near $560 a share will lead to a test of target resistance with an upside Fibonacci target of $742.

The Bottom Line

For stock prices to continue to rally they generally need to take a pause. During these pauses, new information can arise that allows bearish investors to short these stocks generating a wall of worry. For me, this represents an excellent opportunity to purchases shares especially during their first dip in a fresh uptrend. Both SNAP and NFLX have experienced recent dips, generated by the wall-of-worry associated with new potential congressional oversight concerning antitrust regulations.

Both NFLX and SNAP are scheduled to deliver financial results after the closing bell on October 20. Both stocks have exhibited behaviors that show that the bull-trend is intact and I expect the price to continue to target higher Fibonacci target levels as these stocks continue to climb the wall-of-worry.

Want to learn how we help traders and investors stay ahead of these bigger trends and setups?  Visit www.TheTechnicalTraders.com to learn more about the Technical Trader, my swing trade analysis and alerts, and the Technical Investor, my passive long-term signals service. Stay ahead of the market and protect your wealth by signing up today!

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

NOTICE AND DISCLAIMER: 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.

 

Doji Clusters Show Clear Support Ranges On The S&P500

Clusters of Doji shaped candles have, for centuries, illustrated very clear levels of support/resistance in price action.  Whenever multiple Doji candles appear in a cluster-like formation, traders should pay attention to these levels as future support/resistance ranges for price action.  In the case of the S&P500 E-Mini Futures Daily Chart, we can clearly see three separate support zones – the highest one being right where price closed on Friday (near 3475).

As the US elections near, we do expect increased volatility to become a factor in the US markets.  Currently, our predictive modeling systems are suggesting a Bullish trend bias is in place in the markets.  Therefore, we expect the bias of the trend to continue to push higher.  Yet, these Doji Cluster support levels become very clear downside targets if increased volatility prompts any broad market rotation over the next few days/weeks. These three levels are :

  • 3445~3495
  • 3330~3390
  • 3185~3225

We are suggesting that IF any deeper market rotation takes place, support near these Doji Cluster levels would likely act as a major price floor – prompting some price support and a potential for a quick upside price reversal near these levels.  If the lowest level, near 3200, is breached by deeper price rotation, then a new price correction phase may setup.

Traders should use these levels to prepare for the expected volatility spike as we near the US elections.  We believe price will become more volatile as traders/investors attempt to reposition assets away from risk before the elections.  We are particularly concerned of a breakdown in the Technology sector related to recent threats to increase liability related to a special clause (230) that protects companies like Facebook and Twitter from the same Publisher Liability as major newspapers.

Given the renewed focus on these social media sites and the content posted/restricted on these sites, it appears they have become the target of investigations and the US Congress.  This could lead to some very big volatility spikes in the NASDAQ and the Technology sector over the next few weeks and months.  This could result in some very good trade setups as price levels may rotate wildly because of the elections and the pending decisions related to these social media firms.

Want to learn how we help traders stay ahead of these bigger trends and setups?  Visit www.TheTechnicalTraders.com to learn more about my swing trade alert and passive long-term signals services. Stay ahead of the market and protect your wealth by signing up today!

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

NOTICE AND DISCLAIMER: Our 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.

7 Reasons Why the Housing Boom Will Continue to Accelerate in 2021

The US residential real estate market is on fire. Demand is surging as everyone is stuck at home, using their house as a gym or an office and of course a place to live. A recent Harris Poll showed that nearly 40% of urbanites were considering leaving the city to find a less crowded place to live, that featured a house. New and existing home sales are hitting multi-year highs and this trend will continue as interest rates are expected to remain near historic lows. The combination of ultra-low inventories as well as rising demand has buoyed the IYR real estate ETF along with other home building stocks. This momentum is poised to continue. Here are 7-reasons why the housing boom will accelerate in 2021.

1)  COVID-19 is Driving Up the Divorce Rate

The spread of COVID-19 is not going away. Nearly everyone is stuck at home with each other which is increasing separations and divorces at a higher than normal rate. For the period between March and June 2020, the number of people in the U.S. looking for divorces increased by a robust 34% year over year according to Legal Templates. The driving force, the lockdown during the spread of COVID. To me, this means that more people will be looking to find a new home especially if kids are involved.

2) People are Leaving the Cities

People are fleeing cities at record rates. The pandemic is driving people to less populated areas, away from apartment dwelling, and toward houses. The New York Times reported that from March through August the number of people moving out of large cities was up 50% year over year. HireAHelper, an online marketplace, found that the spread of COVID has generated an abnormally large increase in the people moving out of large cities like New York, Los Angeles, and San Francisco and into smaller cities like Scottsdale Arizona, Durham North Carolina, and Columbus Ohio. This trend is perpetuating and I believe it will continue through 2021.

3) The Trend in New Home Sales is Rising

It’s easy to say that since divorces are up and people are leaving cities that new home sales should rise but it is another to prove it. The proof is always in the pudding. In August, sales of new U.S. single-family homes surged to their highest level in nearly 14 years according to the U.S. Commerce Department. New home sales rose 4.8% to an annual rate of 1.011 million units which was the highest level since September 2006. Since new home sales are counted at the signing of a contract, I consider these metrics a leading indicator of home sales.

4) Existing Home Sales are Accelerating

New home sales make up about 15% of the total home sales in the US compared to existing home sales which make up the bulk of home sales. In August, existing-home sales rose by 2.4% month over month to an annual rate of 6 million units the highest level since December 2006. Sales surged nearly 11% year over year. The accelerating rate of sales has spilled over into prices. The Commerce Department reports that the median existing house price jumped 11.4% year over year to a record $310,600 in August.

5) Inventories Remain Very Low

Homebuilders are salivating at the prospect of lower trending inventories. There were nearly 1.5-million homes on the market in August, down 18.6% from a year ago. At this rate, it will only take 3-months to clear out all the current existing home inventory down from 4-months a year ago. Historically, a 7-month supply of homes is viewed as a healthy equilibrium. Homes are flying off the market. In August the average home was on the market for 22-days, compared to 31-days a year ago, according to the National Association of Realtors. Nearly 70% of the homes on the market sold in less than 1-month.

6) Interest Rates are at Historic Lows

While the tightness in the housing market could generate some demand destruction attractive borrowing rates have more than offset the higher prices. In September, the 30-year fixed mortgage rate hovered near 2.87%, according to Freddie Mac. These rates will likely remain stable as the Federal Reserve has signaled to market participants that short-term interest rates will remain near zero, for the next 3-years.

*Source Y-charts

7) The Technicals are Positive But Be Prepared Either Way

The IYR real estate ETF is consolidating sideways. When the price of an ETF moves sideways for several months it means it is building up a lot of energy for the next move. The recent movements have created a tighter range as the ETF is sandwiched between resistance near the 10-week moving average and support near the 50-week moving average. Any breakout here will generate a robust move higher, potentially testing the 2020 highs near $101. Strong resistance is seen near the August 2016 highs which coincide with the June 2020 highs near $87.

Short-term momentum is positive as the fast stochastic recently generated a crossover buy signal. Medium-term momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a flattening trajectory which points to consolidation.

The Bottom Line

The upshot is that the spread of COVID has brought on a cascade of events that point to a continued acceleration in the housing market. People are moving out of large cities and looking for homes in the suburbs and smaller cities. The divorce rate has accelerated which means that more people will be competing for available homes. Both new and existing home sales have reached 14-year highs, and the low level of interest rates will continue to propel demand. With inventories as multi-decade lows, home builders will continue to benefit from higher demand and low supplies. The technicals show the IYR ETF is moving sideways gathering energy and poised to break out to higher levels.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders.

Chris Vermeulen
Chief Market Strategist

NOTICE AND DISCLAIMER: 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 to our subscribers and not intended to be acted upon.

Crude Oil Stalls In Resistance Zone

CLEAR PRICE CHANNEL MAY PROMPT BIG BREAKOUT OR BREAKDOWN MOVE IN OIL

In this report, I discuss the recent price action in crude oil and how economic conditions and the pennant flag chart pattern is indicating a big price move is about to take place over the next few weeks.  While some of you may want a clear, bold prediction as to whether a breakout or breakdown may happen, as technical traders, our job is to predict different possible setups and identify the criteria that will tell us when to enter the trade upon confirmation. Read below to learn more.

Crude Oil has continued to retest the $41.75 to $42.00 resistance level over the past 30+ days. My research team believes this represents a very clear indication that further failure to advance above this level will prompt a moderate price decline – likely breaking below the $36.00 ppb price level.

We believe the completed Pennant/Flag Apex, highlighted in Light Green on the Crude Oil Futures chart below, represents a technical pattern suggesting a new price trend is pending.  The recent sideways price action, highlighted by the Gold Rectangle on this chart, shows the range of price recently that is currently presenting a very clear support level (near $36) and a very clear resistance level (near $42).

Our research team believes the downside potential in Crude Oil outweighs the upside price potential at this time because of two primary factors; continued COVID-19 cases and the likelihood that continued economic restrictions will stay in place and the pending change in the seasons (Winter is coming).  We believe these two factors will lead to lower demand for Crude Oil over the next 3+ months which could send Oil prices tumbling lower.

Currently, Our research team is watching Crude Oil for any price breakdown below $37 as a signal that downward price pressure has prompted a price move below the MIDPOINT of the Gold Rectangle sideways price range.  We believe when the price of Crude Oil breaks below the Midpoint of this range, there is a much stronger potential for a breakdown move below the $36 price level.  Of course, we would have to have technical confirmation of this breakdown in trend from other indicators, but as long as Crude Oil price stays above $38.25 the bias of price within the range is still Bullish in nature.

This may become a very good trading signal in the next few days or weeks ahead.  Traders should keep Crude Oil on their watch lists as this technical pattern plays out.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders.  If you want to learn how to become a better trader and investor, visit www.TheTechnicalTraders.com to learn how we can help you make money with our swing and investing signals. Don’t miss all the incredible trends and trade setups, sign up today.

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

 

Short Term S&P 500 Top, and Financials and Banking Start New Bear Market

Find out what type of price action is about to happen with the SP500 over the next 11 trading days. Also, did you know the financial and banking sectors are both in bear markets?

Financials are doing the exact opposite of the best performing sector which is the TAN solar ETF: https://www.fxempire.com/forecasts/article/a-perfect-financial-storm-for-the-stock-market-676819

For a look at all of today’s economic events, check out our economic calendar.