Watch the Financial Sector for the Next Topping Pattern

Remember how in 2008-09, the Financial sector and Insurance sector were some of the biggest hit stock sectors to prompt a global market crisis?  Well, the next few weeks and months for the financial sector are setting up to be critical for our future expectations of the US stock market and global economy.

Right now, many of the financial sector stocks are poised near an upper price channel that must be breached/broken before any further upside price advance can take place.  The current trend has been bullish as prices have rallied off the December 2018 lows.  Yet, we are acutely aware of the bigger price channels that could become critical to our future decision making.  If there is any price weakness near these upper price channel levels and any downside price rotation, the downside potential for the price is massive and could lead to bigger concerns.

Let’s start off by taking a look at these Monthly charts…

This first Monthly Bank Of America chart is best at showing the price channel (in YELLOW) as well as a key Fibonacci price level (highlighted by the MAGENTA line).  We’ve also highlighted a price zone with a green shaded box that we believe is key support/resistance for the current price trend.

As you can see from this chart, since early February 2018, the overall trend has shifted into a sideways bearish trend.  The price recovery from December 2018 was impressive, yes, but it is still rotating within this sideways/bearish price channel.  Our belief is that this YELLOW upper price channel level MUST be broken in order for the price to continue higher at this point.  Any failure to accomplish this will result in a price reversal that could precipitate a 30% price decline in the value of BAC.  In other words, “it is do-or-die time – again”.

This Monthly JPM chart shows a similar pattern, yet the price channel is a bit more narrow visually.  We have almost the same setup in JPM as we do in BAC.  The same channels, the same type of Fibonacci price support level, the same type of sideways price support zone (the shaded box) and the same overall setup.  As traders, we have to watch for these types of setup and be aware of the risks that could unfold with a collapse of the financial sector over the next few weeks.

We believe the next few weeks could be critical for the financial sector and for the overall markets.  If weakness hits the financial sector as global growth continues to stagnate we could enter a period where the global perception of the future 12~24 months may change.  Right now, perception has been relatively optimistic in the global stock markets.  Most traders have been optimistic that the markets will recover and a US/China trade deal will get settled.  The biggest concern has been the EU and the growth of the European countries.

What if that suddenly changed?

We are not saying it will or that we know anything special about this setup.  We are just suggesting that the Monthly charts, above, are suggesting that price will either break above this upper price channel or fail to break this level and move lower.  We are suggesting that, as skilled traders, we need to be acutely aware of the risks within the financial sector right now and prepare for either outcome.

This last chart, a Weekly FAS chart, shows a more detailed view of this same price rotation and sideways expanding wedge/channel formation.  Pay very close attention to the shaded support channel shown with the GREEN BOX on this chart.  Any price rotation within this level should be considered “within a support channel” and not a real risk initially.  We want to see price break above the upper price channel fairly quickly, within the next 2 to 5+ weeks, and we can to see it establish a new high (above $78 on this chart) to confirm a new bullish price trend.  Once this happens, we’ll be watching for further price rotation and setups.  If it fails to happen, then the RED DOWN ARROW is the most likely outcome given the current price setup.

Any downside price move in the Financial sector would have to be associated with some decreased future expectations by investors.  Thus, our bigger concern is that something is lurking just below the surface right now that could pull the floor out from under this sector.  Is it a surprise Fed rate increase?  Is it some news from the EU?  Is it a sudden increase in credit defaults?  What is the “other shoe” – so to say.

Be prepared.  If all goes well, then we’ll know within a few more weeks if the upside price rally will continue or if we need to start digging for clues as to why the support for the financial sector is eroding.  This really is a “do or die” setup in the financial sector and we urge all traders to pay very close attention to this sector going forward.  We believe it will be the leading sector for any major price weakness across the global markets.

Please visit TheTechnicalTraders.com to learn how we can help you prepare for the big moves in the global markets and find better opportunities for greater success in the future.

Chris Vermeulen

Oil May be Setup for a Move Back to $50

In California, prices shot up from near $3 per gallon to over $4 a gallon over a 7-day span. Every year, when the Summer Blend of Gasoline hits the markets, we expect a price increase that is associated with this change.  But this year, the price increase has really shocked consumers to the point that they are altering their travel plans and cutting extra spending in an attempt to deal with the new gasoline prices.

This data graph from the US Energy Information Administration shows just how dramatic the price increase has been over the past 3+ weeks.

Source: https://www.eia.gov/dnav/pet/pet_pri_gnd_a_epm0_pte_dpgal_w.htm

Anyone with any common sense about how consumers react to these types of price increases will understand that consumers will react to these price increases by cutting other expenses and travel from their future in order to compensate for the higher gas prices.  We’ve seen it happen many times in the past.  This means that retail shopping, entertainment, dining, and other non-essential purchases will be curtailed as consumers deal with the extra $100 to $250+ each month in gasoline costs.  Small business and other service industries that rely on driving or on-site work will also see their bottom line profits drop as a result of these higher prices.  The extra costs for these companies could be counted in the thousands each month.

We believe the reaction to these higher gasoline prices will result in decreasing demand by consumers as they cut back on certain expenses and attempt to limit travel as needed to balance their essentials and non-essential purchases.  We believe this decrease in overall purchases will likely reflect in a decrease in travel and hospitality, retail, entertainment, and restaurant purchases.  It is very likely that this decrease will be felt across the economy fairly quickly as gasoline prices attempt to stabilize near new levels.

Our researchers, at Technical Traders Ltd, believe Oil will come under pricing pressure over the next few weeks as consumers react to the higher gasoline prices.  The recent price stall near $65 aligns with a key Fibonacci retracement level near $63.98 and we believe any further upside in Oil may be limited.  Our researchers believe a downside price retracement will begin to unfold where Oil prices will fall to below $55 ppb initially and potentially target sub $50 levels eventually.

The recent rally in oil prices from last 2018 was in-line with expectations that the US and global markets would recover after the deep price correction in Q4 2018.  As the US stock market continues to rally towards new highs, we suggest watching Crude Oil, Transports and overall consumer activity to determine is a mild consumer recession sets up over the next few weeks.  Our research suggests that Q2 is typically fairly strong for Transports and Oil.  Q3, or the Summer season, is typically relatively weak.  This fall into the old trader saying “Sell in May and go away”.  We believe the rotation lower in Oil and consumer activity related to the higher oil prices may hit the markets a bit earlier this year and set up some incredible trading opportunities.

If our research is correct and Oil prices top over the next few weeks, this means that OILD and USOD are likely to be very strong buying opportunities near historical lows.  Let’s take a look at these setups and plan out the best case scenario.

USOD, the US 3x Short Oil Fund, is set up with current price levels very close to historical price lows.  We can see how any price move below $4 would set up an incredible buying opportunity for skilled traders to setup swing trade long positions going into the summer months.  The closer we get to mid-May, the more likely the historical price weakness will set up to drive these Oil ETFs higher by at least 15% to 25%.  Our believe that consumers will react to the higher gasoline prices by cutting their demand for extra travel and other expenses help to support our belief that oil prices may decline 12% to 24% over the next 30 to 60 days.

OILD, the Proshares UltraPro Short 3x ETF, is setting up very near to historical price lows slightly below $16.  We believe any price decline near these lower levels would create an excellent buying opportunity for skilled traders to setup long trades in OILD as we expect the Summer season oil price decline to push these ETFs at least 15~25% higher.

The key to understanding the potential for this trade is to watch for price weakness in the general markets and in select consumer sectors (travel, entertainment, retail, restaurants, and others).  If we see that consumers are pulling back on certain expenses, then we can assume they are also pulling back on travel, gas purchases, and Summer vacations.  This will likely cause demand issues in Oil to prompt a price decline.  We don’t expect a dramatic price decline at this point, but we do expect a 12% to 24% price drop as any protection move by consumers will have far-reaching results on the economic numbers and future expectations.

Chris Vermeulen

Indexes Race for the New All-Time High

While many other symbols are still flirting with November/December 2018 highs, the SPY and QQQ are both showing upside price gaps last week indicating a moderately strong price advancement is taking place.  Additionally, both the SPY and the QQQ are already well above early 2018 peak levels.

If you were not paying attention, it sure looks like these two symbols are racing to be the first to break into “new all-time high levels” and shock the doomsayers (again) as we may see this rally continue for at least another 30 to 60 days.

If you’ve been following our research, you’ll know that our short term research suggests new all-time high prices are imminent (very likely over the next 30 to 60+ days).  We made this call back in September 2018 before the big selloff prompted by the US Fed.  We also called the bottom on December 24, 2018, and warned that the subsequent rally would push hard in an attempt to target recent all-time highs.  Now, as we near this event, we need to evaluate what may happen next.

This SPY chart shows the weekly price bars and just how close we are to new all-time highs.  The SPY only needs to rally about $8 to breach into new record-setting territory.  We believe the upside rally could continue well above the $300 level as this upside price bias should last until late May or into early June 2019.  Therefore, we could see an upside potential of more than 5~8% before a new peak sets up.

This QQQ Weekly chart shows similar characteristics, yet shows one incredible variation to the SPY chart.  The QQQ chart shows that price is breaching the lower YELLOW price channel and this may result in an impulse move higher in the QQQ that could push it to new highs before the SPY.  The QQQ is even closer to all-time highs than the SPY – being only $2.15 away from reaching the all-time high level.  If this breach of the lower YELLOW price channel prompts a bigger rally, we could see the QQQ rally upward towards $200 to $210 before setting up a new price peak.  This represents a +7.5% to +13.5% upside potential for skilled traders.

If our research continues to be correct, we should expect at least another 30 to 60 days of upward price trend/bias before any real resistance sets up to potentially create a peak in price.  Our research suggests late May or early June 2019 is the time traders should protect open positions and prepare for extended volatility.

Don’t wait for the ES, NQ, YM or TRAN to break the all-time highs.  Watch the QQQ and SPY for this event and pay attention to the Russell 2000 and Blue Chips as they will likely be the early warning signs of a price peak or price weakness.  We warned that price volatility will likely increase over the net 30+ days – so be prepared for some bigger price swings going forward as the bull and bears fight for control as we near these resistance areas.

Chris Vermeulen

Natural Gas Continues to Offer Opportunities for Longs

Over the past 24+ years, the upside opportunity in Natural Gas has been accurate over 68% of the time with the average upside potential ranging from $0.60 to $0.85.  With Natural Gas sitting down near recent lows and seeing as though we are still fairly early in the month of April, our researchers believe the opportunity still exists for some quick profits in UNG with an upside move from below $23.95 to a target level of $26 to $28 (roughly +9 to +18%).

The downside risk is rather limited with clear support visible below the recent lows (near $22.75) and a historical likelihood of any further downside price swing being below 33%.  Our research team believes an opportunity to establish new longs in UNG below the current Daily price gap (below $23.50) would be ideal.

Historical data mining shows that average upside rallies at this time of the year are typically ranging just below $1.  Thus, the upside potential for this move being about +9 to +12% should be sufficient for quick profits.  Skilled traders can hold a small portion of the trade for any potential run beyond these initial target levels, but we caution traders that $28.50 to $29.00 is an area of strong resistance. Our last trade in natural gas with subscribers netted us 30% profit in UGAZ within 10 days back in February.

Our research team is still waiting for the Daily Upside Gap to fill with prices below $23.50 before we look to enter any new trades.  We have been patiently waiting for the bottom in Natural Gas to form knowing that we have this trade setup with a relatively high success rate.  Keep an eye on Natural Gas and look for any good entries below $23.50 in UNG – the deeper the better.  Our Fibonacci modeling systems are already suggesting a bottom has set up and any upside price move above $24.30 will likely prompt a bigger rally towards $26 to $28.

Chris Vermeulen, Chief Market Strategist at TheTechnicalTraders.com

Intra-Day Fibonacci Modeling Shows Volatility is About to Spike

One of the key benefits of our proprietary Fibonacci price modeling system is that it automatically learns and adjusts to price action on different intervals.  So, by watching the results of this adaptive learning model on various intervals shows different types of setups and expectations, we can develop a consensus among the result to assist us in determining a likely outcome.  These models are showing that volatility will increase by expanding out the Fibonacci Trigger Levels for Bullish and Bearish price action.  As price begins to consolidate, the proprietary Fibonacci price modeling system adjusts internal computational measures to determine where and when the opportunity exists for trends to form.  When these Fibonacci Trigger levels move away from price, it typically suggests bigger moves are about to happen and that volatility will increase.

This 120 minute NQ chart highlights the expanded range of the Fibonacci Trigger Levels (called the Volatility Zone).  This is the clearest example of what we expect to become a normal price rotation zone for the NQ.  Right now, our expectations are that a range from 7500 to 7660 is expected.  This means we could see deeper price rotation closer to the 7500 level and up to near the 7660 level without any real trend being established.  Eventually, as price rotates and consolidates, these Fibonacci Trigger levels will adjust to better identify future trends.  Currently, they are warning of increased volatility and the likelihood of bigger price rotation ahead.

NQ Chart

This 120-minute YM chart highlights the range of the volatility zone based on Fibonacci Projected Target levels.  Although the YM chart does not include the wider Fibonacci Trigger levels, we believe this increased volatility suggested by the NQ chart will carry over into the YM and ES charts as well.  Therefore, we believe the entire US stock market will enter a period of increased volatility over the next 5~15 days.

We have highlighted a price range from 25,750 to 26,500 as an expected rotational range.  It is highly likely that the 25,980 level will act as support, thus we believe any price move below this level will present a key buying opportunity for the final leg higher.  Overall, the extended volatility we expect should be a moderate price rotation before the final rally to new all-time price highs for the US stock market.  This rotation will present key buying opportunities for skilled traders wanting to catch that last 4~12% upside swing in the US stock market.

YM Chart

It is highly likely that the YM falls to near the 25,980 level (near the ORANGE Moving Average level) before finding key support.  Pay attention to this level going forward as it would be a good indicator of buying opportunities in the broader markets/stocks.

Chris Vermeulen

Is this the Last Leg Higher for the Dow Index?

Yes, back in December 2018 and before, we called for an “Ultimate Low” pattern setup followed by an incredible run to new all-time highs when almost everyone else was calling for a continued downside price move.  Now, that the YM/DOW is only 640 points away from reaching all-time highs again, we believe a new price peak will setup sometime near June/July 2019.

Our researchers believe the continued upside price bias will stay in place for at least another 30 days and that the YM.DOW will establish new higher all-time highs in late April or early May 2019.  We believe once a “scouting party” type price move completes above the all-time highs near $27,000, a sideways price rotation will begin that may last as long as 25 to 55 days.  Our predictive modeling systems are suggesting that June/July are important months for the global equities/stock markets and we believe we’ll know more about the setups that will prompt bigger moves as we get closer to these dates.

Right now, our researchers are suggesting the upside move in the YM/DOW is likely to push higher by +2.5 to +3% or slightly more.  Once the $27,000 level is breached to the upside, traders should begin to become much more cautious of price rotation and volatility.  As we head into June/July/August 2019, be prepared for a spike in volatility/VIX as price rotation is likely to become much more aggressive.

Get ready for some bigger price swings and prepare for the last bit of upside price trending before a price peak sets up near June/July.  Ultimately, we believe there is an opportunity for skilled traders that can see and create opportunity from these moves.  We’ve been warning that 2019 is going to be an incredible year for skilled traders – our call near the end of 2018 that this move higher would target new all-time highs is proof of the opportunity that exists if you pay attention to our research.

Chris Vermeulen

Watch For +15% Move In Chinese Stocks

We believe the continued pricing pressures of 2018 are easing as continued negotiations with US trade officials have everyone in high hopes for a suitable and equitable outcome.  Our researchers believe the upside in the Chinese stock market could be as high as $32 to $36 in YINN before the June/July peak is reached.  This would represent a +25% to +40% upside price objective from recent highs.
Chart_19-04-07_YINN_Bull
It is our belief that the continued US/Chinese stock market rally that initiated after the December 24, 2018 bottom will continue until a June/July 2019 peak is reached in the global markets.  Pay attention because this could be an excellent short term price move for skilled traders to pocket 10% to 20% over just a few days or weeks.

Another pocket of stocks also starting to breakout are small-caps which I shared in a detailed technical analysis video last week. While we have suggested the US stock market is poised for further upside price activity with a moderately strong upside price “bias”, our research continues to suggest the S&P 500, DOW, NASDAQ stock markets will not break out to the upside until the Russell 2000 breaks the current price channel, Bull Flag, formation which is why I am starting to focus on small-cap stocks using my MRM Trading Strategy.

Chris Vermeulen

Why Are The Markets Ignoring The Treasury Inversion?

For many months, other researchers have continued to predict “doom and gloom” with warnings of Treasury yield inversions, global collapse events, and other crisis events.  Yes, we believe continued price rotation will drive future price swings and they could be volatile moves – yet we believe any crisis event will actually become an incredible opportunity for long traders to BUY into the markets at extreme lows.

Recently, our researchers focused on OIL and the Transportation Index as key elements suggesting this upside move is far from over.  Oil has moved from below $55 ppb to well above $60 ppb.  We believe this move will continue higher to target the $64 ppb level were resistance is likely to be found.  We do believe that some price rotation in Oil is likely to happen in the Summer months – when travel increases and Summer blend gas hits the markets.  Winter has been uniquely difficult this year and the rise in Oil prices, where OPEC and foreign market events have attempted to push prices above $50 ppb, is warranted given global economic activities.

While Oil continues to climb, the Transportation Index is also rallying above recent resistance near $10,500 and pushing higher targeting the $11,250 level.  This is important because the Transportation Index typically leads the US economy by about 3~6 months and is a key indicator of investors future expectations for the US and global economy.  Any push above $11,000 in the Transportation Index would likely mean we are going to attempt to reach all-time highs near $11,634.  A move like this would likely push the US Stock Market Indexes well above recent all-time highs as well.

Much of our recent analysis has been an attempt to relate the opportunity that exists over the next 30~60 days in the US Stock Market.  For well over 12 months, we’ve been suggesting a capital shift is taking place where the US stock market, and the US Dollar, are uniquely positioned to become safe-haven investments for foreign investors.  We believe this process is still taking place and we believe the US market could continue to push up to new all-time highs before another rotational move sets up.  Our most recent research suggests a peak may form near June/July 2019 that should concern traders.  Until then, we believe the upside price bias will continue and we still believe new all-time highs are about to be reached.

As of today, we have technical confirmation that a renewed upside price move is taking place and we continue to watch the precious metals for any signs of a base/momentum bottom.  Follow our research and learn how we can help you find and execute better trades.

Chris Vermeulen

Waiting For The Russell 2000 To Confirm The Next Big Move

Even though the US stock markets open with a gap higher this week, skilled traders must pay attention to how the Mid-Caps and the Russell 2000 are moving throughout this move.

As we continue to advise our clients that the upside pricing cycle in the US stock market is being underestimated, see this research post: we also believe that increased volatility and price rotation will continue to drive larger rotations in price before the final breakout upside move takes place.  We want to continue to warn traders that we still don’t have any confirmed upside breakout with price continuing to stay within this price channel in the Russell 2000.  Eventually, when and if the price does breakout to the upside, we will have a very clear indication that continued higher prices and a larger upside move is happening.  Until then, we need to stay cautious about the types and levels of rotation that continue within the markets.

Recently, volatility has started to increase as can be seen in this VIX chart.  If the Russell 2000 is not able to break this trend channel with this current upside price move, then we fully expect continued price rotation in the US stock markets and another increase in the VIX as this rotation takes place.  The NQ recently rotated downward by nearly 4% while historical volatility continues to narrow.  When volatility diminishes in extended price trends, we’ve learned to expect aggressive price rotation can become more of a concern.  We expect the VIX to spike above 16~18 on moderate volatility as we get closer to the cycle inflection date near June/July 2019.

Overall, our researchers believe the upside price bias in the US stock market will continue for another 30+ days as our research and predictions regarding precious metals and the longer term equities price cycles continue to play out.  Skilled traders need to be aware that this upside price bias may include larger price rotation and volatility as we get closer to the May/June/July 2019 cycle inflection points.  Stay aware of the risks as 4~6%+ price rotations should be expected over the next 30+ days throughout this upside price bias.

Chris Vermeulen

Proprietary Cycles Predict July Turning Point For Stock Market

Back in October 2018, we predicted the downside price rotation almost perfectly going forward 4 to 5 months.  We predicted nearly every move that occurred in the US stock market all the way to and through the ultimate low that occurred on December 24, 2018.  You can read that post here.

Now, our predictive modeling systems and cycle systems are predicting a June/July 2019 cycle inflection date that will likely coincide with, possibly, new market highs as well as increased bullish price activity throughout the global stock markets until we get nearer to this date.  This June/July 2019 date becomes even more critical as we begin to understand our other predictive modeling systems are suggesting that precious metals will begin an upside price advance near late April or early May 2019.  When we combine this analysis and start to consider the broader conclusion, it leads us to believe the global stock markets could be poised for a bit of rotation after May or June of 2019 – possibly setting up a bigger price sell-off throughout the end of 2019.  Only time will tell.

This Monthly DOW Industrial chart highlights our cycle inflection points/dates in vertical lines.  The next, pending, cycle inflection point is June/July 2019 on this chart.  We believe continued upside price bias will prevail over the next few months resulting in lower Gold and Silver prices.  As we near these June/July dates though, we could see an increase in volatility as well as a decrease in US Dollar valuation.  This would align with a “risk on” transition away from equities and into protection assets like Gold and Silver.

Our Adaptive Dynamic Learning (ADL) predictive price modeling system is suggesting that an upside price bias will continue over the next 2~3 months headed into this June/July cycle trigger.  The ADL is also suggesting that the US stock market may reach near all-time highs just before the cycle inflection date hits.  We do believe that some moderate price rotation is likely over the next 60 to 90+ days as price rotation is a key element of price advance or decline.  We are suggesting that, for right now, traders should continue to expect moderate upside price bias, with some expectation of price zig-zagging its way up, over the next 2~4 months.

Should our cycle inflection date prompt a market reversal, we will likely know more about the risk factors that could prompt this move at least 20~30 days before the event begins to unfold.  We are posting this research post to alert you to a cycle trigger/inflection point that is 3~4 months away that could become a major event in our future.  As we’ve suggested in this article, we don’t believe this inflection point will change the way we trade next week or the week after that, but we do expect the closer we get to this critical inflection point – the more important it will become for skilled traders.

We believe 2019 and 2020 will be incredible years for skilled traders and we are executing at the highest level we can to assist our members.  In fact, we are about to launch our newest technology solution to better assist our members in creating future success.

Chris Vermeulen

ADL Predictions For Price of Gold

Our Adaptive Dynamic Learning predictive price modeling system has been calling for this move for many months (see the chart below).  This advanced predictive price modeling system is suggesting that in May/June of 2019, we will likely see a bigger price rally unfold in Gold and Silver which may be paired with some type of geopolitical or global economic event.  See this article for more details.

Gold rallies on fear (in most cases) and the only reason for Gold to really as our ADL predictive modeling system is suggesting is that some renewed level of fear could enter the global markets.  This could be from any type of global crisis event or even a regional crisis event (think Brexit, EU crisis or some other foreign nation crisis).  We believe skilled traders should be actively seeking to identify buying opportunities below $1295 in Gold as we only have about 20 days left before our original bottom/base date of April 21, 2019.

This Gold Monthly chart, below, highlights the ADL predictive modeling systems expectations as well as the three support levels that we believe all Gold traders should be targeting.  Gold is currently within the first target level and an opportunity to buy below $1295 would be an excellent starting position.  Further, any additional opportunity to buy below $1250 should be an incredible opportunity – if it happens.  Lastly, our lowest support level is below $1165.  Although unlikely, if Gold retraces to below this level, then please don’t miss this opportunity to get into additional long positions.

Our ADL predictive price modeling system is suggesting that May & June 2019 will start a bullish price rally in Gold and Silver that should push prices well above $1500 by October/November 2019 – possibly much higher.  Overall, we believe this could be the beginning of a much bigger upside leg in Precious metals and all traders need to be aware of this future price move.

We’ve been suggesting this could be the “move of a lifetime” setting up in the metals because it will likely pair or align with some type of broader global stock market move to the downside.  Our opinion is that May/June are dates that all traders should consider developing very protective positions as the markets shake up and Gold begins this incredible run higher.

Chris Vermeulen

Precious Metals Setup Final Buying Opportunity

Recently, over the past few months, we’ve been warning that an April 21~24 date is likely to set up an ultimate price bottom in the precious metals market. It could prompt a broader upside price swing that should eventually lead to a much bigger upside breakout move.  On March 8, 2019, we posted this article that clearly outlined our thinking at that time saying a bounce to $1315-1320 before heading down to $1255.

Take a minute to read that article and consider this current downside price action as a gift the precious metals markets are allowing for all of us.  This is the move that we’ve been warning about for months – the retracement from the $1315~1320 level that should bottom out near $1240~1265 and will ultimately become the “momentum base” for the future upside move.  Precious metals are starting a move that we predicted many months ago.  Our researchers believe Gold will trade below $1275 for a brief period of time (likely just a few days or weeks) before setting up a broad-based momentum bottom.  Our objective is to “leg into” this setup with a series of long trades for the ultimate upside breakout.

Our research suggests that near the end of April 2019 or in early May 2019, Gold prices will likely begin a strong upside price move that will quickly target the $1500+ price level.  We believe this current price swing will set up as the last real opportunity for skilled traders to accumulate long positions in precious metals while we wait for the April/May breakout move.  Any opportunity to buy near the lower range of our Buy Zones would be an excellent entry position given our future prediction that a massive upside breakout move is just 20~30 days away from starting.

This Daily Gold chart shows just how deep the Buy Zone is for Gold.  Any price activity below $1275 would be a solid entry for skilled traders.  Any further opportunity to add to that position below $1265 is even better.  Ultimately, we believe the $1240 to $1250 level will hold as support for the momentum bottom.

This Weekly Gold chart highlights our Buy Zone in broader price perspective.  As you can see, the $1250 level corresponds to a price peak back in October/November 2018.  We believe this level will act as long-term support and that price will bottom between $1240 and $1265 before the upside price swing begins.

This last Weekly Silver chart highlights the fairly narrow Buy Zone in silver that will allow traders to accumulate long position near of just above $14.50.  We believe this $14.50 level will become key support throughout this April 2019 lower price rotation.  Remember, near the end of April or in early May, we strongly believe a new upside price move will take place that will blow through recent highs and prompt a 12 to 25% upside price move.  Our target for Gold is above $1500 (likely $1575 to $1675).  Our upside target for Silver is $17.50 to $19.50 with this first upside leg.  Our opinion is that this initial upside leg could be the start of a much larger and much more profitable price advance – lasting many months.

Chris Vermeulen