Most Popular
1. Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs - 21st Feb 22
2.Putin Starts WW3 in Ukraine, Will Use Tactical Nuclear Weapons, China Prepares Taiwan Blitzkrieg - 28th Feb 22
3.World War 3 Phase 1 - Putin WINS Ukraine War! - 25th Feb 22
4.INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! - 10th Feb 22
5.Will There Be A 2024 US Presidential Election? - 3rd Mar 22
6.Gold and SIlver, Precious Metals Sector Is at a Terrific Buy Spot - 6th Feb 22
7.Why Putin Wants the WHOLE of Ukraine - World War 3 Untended Consequences - 6th Feb 22
8.Dow Stock Market Expected Max Drawdown 2022 - 19th Feb 22
9.Stock Market Calm In the Eye of the Inflation Storm - 4th Mar 22
10.M = F - Everything is Waving! Stock Market Forward Guidance - 7th Mar 22
Last 7 days
Why Ray Dalio is WRONG About China - Principles for Dealing with the Changing World Order - 24th May 22
Globalists Convene to Plan Central Bank Digital Currencies - 24th May 22
After Recent Highs, What’s Next for the Gold Junior Miners? - 24th May 22
Why APPLE Could CRASH the Stock Market! - 21st May 22
Why Is Crude Oil Ignoring US Inventories? - 21st May 22
Here is Why I’m Still Bullish on Gold Mining Stocks - 21st May 22
THE INFLATION MEGA-TREND QE4EVER! - 20th May 22
US Real Estate Investors – Is There An End In Sight? - 20th May 22
How Technology Affected the Gaming Industry - 20th May 22
How To Set And Achieve Reasonable Goals For Your Company - 20th May 22
How Low Could the Amazon (AMZN) Stock Price Fall? - 19th May 22
Bitten by FANG? Clocked by Cryptos? -- 'Air Pockets' Everywhere - 19th May 22
Northern General Hospital Orthopedics Fractures and and Ankle Clinic Consultations Real Patient Experience - 19th May 22
Cathie Wood Goes All in on Teladoc, ARKK INSANE Noob Investing Strategy! - 17th May 22
This is Anything but Positive for US Housing Market - 17th May 22
What Should We Do If There Is No Fed Monetary Policy Pivot? - 17th May 22
All Possible Ways to Earn Free Litecoin - 17th May 22
How low Could the Amazon Stock Price Fall? - 16th May 22
Cathy Wood ARKK INSANITY There is NO Coming Back! - 16th May 22
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH - 16th May 22
Sanctions, trade wars worsen US inflation - 16th May 22
AI Tech Stocks Earnings BloodBath Buying Opportunity - 14th May 22
Futures Contract – Trading Crude Oil With USO - 14th May 22
How to Get Kaspersky Internet Security for 80% Discount! Do not Pay Renewal Price! - 14th May 22
Sagittarius A* Super Massive Black Hole Monster at Centre of Our Galaxy REVEALED! - 14th May 22
UK Public Debt Smoking Inflation Gun - 13th May 22
What Happens When the Stock Market Dip Keeps Dipping? - 13th May 22
Biden Seeks Inflation Scapegoats; Gold Advocate Wins GOP Primary - 13th May 22
Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - 12th May 22
The War on Gold Ensures the Dollar’s Downfall - 12th May 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Stock Market Indexes Continue to Rally Within A Defined Range

Stock-Markets / Stock Markets 2019 Sep 16, 2019 - 05:22 AM GMT

By: Chris_Vermeulen

Stock-Markets

This week ended with the S&P, Dow Industrials and Nasdaq stalling near recent highs.  From a technical perspective, both Thursday and Friday setup small range price bars (Doji candles or small Spinning Top type bars) after the upside price move on Wednesday.  These are indicative of price consolidation and indecision.

The news events that initiated this rally, nearly a week ago, continue to drive sentiment in the markets.  Yet the news from the ECB that new stimulus efforts would begin with $20 Billion Euros monthly invested in assets until they decide it is not required any longer suggests the EU is desperate to support extended growth and some renewed inflation.  This move by the EU pushed banks and the finance sector higher while the US stock market stalled near the end of the week.

At these lofty levels, almost all of our indicators and predictive modeling systems are suggesting the US stock markets are well within an overbought mode.  Of course, the markets can continue in this mode for extended periods of time as central banks and external efforts to support the asset/stock market continues, at some point investors/traders will recognize the imbalance in price/demand/supply as a fear of a price contraction. 


We are very cautious that the market is setting up a lofty peak at this time.  It is important for traders and investors to understand the global situations that are setting up in the markets.  With precious metals moving higher, it is important to understand that FEAR and GREED are very active in the markets right now.  The continued capital shift that has been taking place where foreign investors are shifting assets into US and more mature economies trying to avoid risks and currency risks is still very active.  Yet the lofty prices in certain segments of the US stock markets means that this capital shift may take place where investment capital is shifted away from more risky US assets (high multiple speculative stocks) and into something that may appear to be undervalued and capable of growth. 

The shifting focus of the global markets, the EU and the continued need for stimulus at this time is somewhat concerning.  Our view is to watch how the global markets play out and to maintain a cautious investment strategy.  We shifted into an extremely cautious mode back in February/March as the US market completed the October/December 2018 breakdown and precious metals started a move higher.  We continue to operate within this extremely cautious investment mode because we believe the foundation of the global markets are currently shifting and we don’t believe the stability of the markets is the same as it was after the February 2017 market collapse. 

What do we believe is the result of this shift in our thinking?  This is very simple.  We are entering into the final 13+ months of the US presidential election cycle, the trade wars between the US and China continue to drag on with is muting economic activity, the EU continues to battle to find some growth/inflation while Great Britain attempts to work out a BREXIT deal as soon as possible.  Meanwhile, we continue to try to find opportunities in the markets with these extreme issues still pending.  We don’t believe any real clarity will happen until we near October/November 2020. Be sure to opt-in to our Free Trade Ideas Newsletter to get more updates.

This ES Weekly chart highlights the range-bound price rotation that currently dominates the US stock market.  Overall, the US stock market and the economy are much stronger than any other economy on the planet.  The risk factor is related to the fact that the capital shift which has been pushing asset prices higher as more and more capital flows in the US stock market may have reached a point of correction (headed into the US presidential election cycle).  As long as price stays within this range, we believe continued extreme volatility will continue.  Our Fibonacci system suggests price must close above 3178 to qualify as a new bullish trend and/or close below 2577 to confirm a new bearish trend.

This Transportation Index weekly chart shows a similar setup.  Although the Fibonacci price trigger levels are vastly different.  Price would have to climb above 11,475 to qualify for as a new bullish trend whereas it would only have to fall below 10,371 to qualify as a new bearish trend.  Given the past rotation levels, it is much more probable that price may rotate into a bearish trend before attempting to reach anywhere near the bullish price trigger level.

Our Custom volatility index suggests price has rallied last week well into the upper “weakness zone”.  This move suggests the upside price move may already be well into the overbought levels (again) and may begin to stall.  Traders need to be cautious near these level.  We continue to suggest that skilled technical traders should look to pull some profits from these lofty levels to protect cash/profits.  Any extreme volatility and/or a bigger price rotation could be disastrous for unprepared traders.

We are excited to see what happens early next week.  News will be a big factor – as it always is in this world.  Pay attention to how the markets open early this week and keep your eyes open for any crisis events (wars, bombings or other geopolitical news).  And get ready for some really big volatility to hit the global markets.

This is the time for skilled technical traders to really shine as these bigger moves roll on.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly. 

Be prepared for these price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our  Wealth Building & Global Financial Reset Newsletter.

Join me with a subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in