Dailydart






Are the US Markets setting up for an Early October Surprise?

Many analysts have recently warned that the US markets are setting up for a potentially massive correction, 40~70% some warn.  Our own analysis has shown massive market cycles that correlate with an October market correction.  Our VIX cycle analysis indicates that we should be expecting a spike in the VIX right now (within the next 3~4 days).  What does all this mean in reality for the average investor?
 

As investors, we have to determine the amount of risk compared to the amount of potential gain in any trade.  Our job is to measure this relationship properly and to attempt to find opportunities in taking risks for an adequate amount of gain.  Often, this business is difficult to manage expectations and presumed risk factors for traders.  We’ve been trading, combined, for over 40+ years and have learned that the markets don’t always do what we expect them to do.  A perfect example is our most recent VIX Spike call for Sept 9th ~ 12th.  Even though our analysis was valid and accurate, we did not see the VIX spike levels we had projected to happen – such is life in the markets.  We strive every week to deliver superior analysis, trading triggers/alerts and daily markets updates to our clients.  Right or wrong, we live by our abilities to call successful trading triggers and provide timely and accurate market research.
 

Right now, a number of US major markets are setting up with divergence between price and common technical indicators.  Because many investors fail to even review or focus on longer term charts, very few may be aware of these setups.  Given the size and strength of the recent moves, we are not making predictions regarding the downside price potential (although it could be substantial).  We are simply pointing out that these divergence patterns are setting up in a number of US major markets and we believe this is a significant correlation pattern of a future event.
 

This Daily NASDAQ chart provides one of the clearest examples of the divergence patterns.  Price has continually tightened within an upward sloping trend channel and has recently formed a bear flag formation.  MACD has related multiple divergence tops over the past 3+ months and RSI has hovered just above 45 throughout this trend to support the upward move.  As washout high reversal early this week would be a perfect setup for a divergent reversal. A prices spike a bit higher early this week followed by a deep market correction.

 
Nasdaq Chart

 
This second chart of the ES provides even further evidence of the setup.  This chart is a Weekly ES (S&P) chart that shows the divergent price action going all the way back to February/March of 2017.  The cyan blue trend channel (support level) is clearly our potential downside target and the RSI is continuing to hover above 58 as this trend continues.  Could the extended divergence be warning of a potentially massive correction?  If so, the RSI would quickly fall to below 50 and price would attempt to retest the support channel (-200 pts from current levels). 

Mini Chart

 
The following chart of the INDU, again, shows the US majors are all setting up in a similar pattern.  One can clearly see the continued divergence price pattern from early 2017 and the continued RSI support above 60.  The confluence of these divergence patterns is causing us to be concerned of a surprise price rotation in early October.  We’ve seen what we call a “washout price rotation” happen over and over in the markets near critical tops and bottoms.  The telltale signs of these moves is extended weakness of a trend (as indicated by the MACD divergence), technical failure (which would be the resulting RSI breakdown) and a moderately high volume “last price advance” followed by a clear and quick price reversal (the “washout setup”).
 

Dow Chart

  

To further assist you in understanding this type of setup/reversal, we’ve provided a clear Intraday NQ Washout reversal setup for you to see what it looks like.  This is a nearly perfect example of bigger volume and price range at the end of a trend (what we call the exhaustion move) that sets up the new bullish trend.  You can see the NQ market had been moving lower and had been consolidating briefly.  Just before this washout move, it appears the market was “pausing a bit”.  Then, seemingly out of the blue, a big down move generated lots of renewed interest from sellers.  Only to have that “exhaustion move”, or what we term the “washout low” to sucker in the sellers, stop out the longs and, eventually, continue much higher.
 
Nasdaq Chart
 

Could this be setting up this week with an early Monday/Tuesday washout high price rotation in the US markets?  Could this be the setup reversal that coordinates with our VIX Spike trigger?

 

Two items we will be watching early this week are the NQ (tech heavy and usually an early indication of any general market weakness) the XLF (US banking sector).  The recent hurricanes and natural event disasters are surely to take a toll on the US consumer for a while.  Recent news has suggested that consumer spending is flat in certain areas and that GDP may flatten out a bit.  We assume delinquencies will begin to skyrocket based on displaced workers and jobs over the next 6+ months.  This leads us to believe a market correction would be a natural, and healthy, event in the immediate near future.

 

Markets just don’t “go up” perpetually.  This recent move higher has been one of the longest in history to not see a 5% or greater correction.  Markets need breadth in order to have healthy rotation and we are simply not seeing it recently.  This is why we believe any rotation or correction at this time could be bigger than most think.  Possibly retesting 2016 lows. 

XLF Chart

 
Notice the similarities in all of these charts.  It is almost like everything has been running on autopilot in terms of price appreciation within the US majors.  We do not have any indication of a sell trigger yet.  We would warn investors to be cautious at this time and to protect open long positions.  We do believe a price reversal in these US majors will begin before Oct 19th and quite possibly as early as October 4th or 5th.  Any moderate price advance early this week followed by immediate price weakness and rotation could be the setup of a much deeper price move.

 

If you want to continue to receive these types of detailed analysis reports, timely market triggers and analysis as well as Daily market updates, visit www.ActiveTradingPartners.com today and see why our members continue to value our content.  We are dedicated to assisting you in making better trading decisions and seeing what is in the future with our detailed market analysis and research. 

Recent Winners

 

Are you prepared for the next major market move?  If not, visit www.ActiveTradingPartners.comtoday and see why you should consider joining our team of valued members.  Isn’t it time you invested in your future success?

 

Chris Vermeulen














Hidden Gems Shows A Foreboding Future

A quick look at any of the US majors will show most investors that the markets have recently been pushing upward towards new all-time highs.  These traditional market instruments can be misleading at times when relating the actual underlying technical and fundamental price activities.  Today, we are going to explore some research using our custom index instruments that we use to gauge and relate more of the underlying market price action.

 

What if we told you to prepare for a potentially massive price swing over the next few months?  What if we told you that the US and Global markets are setting up for what could be the “October Surprise of 2017” and very few analysts have identified this trigger yet?  Michael Bloomberg recently stated “I cannot for the life of me understand why the market keeps going up”.  Want to know why this perception continues and what the underlying factors of market price activity are really telling technicians?

 

At ATP provide full-time dedicated research and trading signal solution for professional and active traders.  Our research team has dedicated thousands or hours into developing a series of specialized modeling systems and analysis tools to assist us in finding successful trading opportunities as well as key market fundamentals.  In the recent past, we have accurately predicted multiple VIX Spikes, in some cases to the exact day, and market signals that have proven to be great successes for our clients.  Today, we’re going to share with you something that you may choose to believe or not – but within 60 days, we believe you’ll be searching the internet to find this article again knowing ATP (ActiveTradingPartners.com) accurately predicted one of the biggest moves of the 21st century.  Are you ready?

 

Let’s start with the SPY.  From the visual analysis of the chart, below, it would be difficult for anyone to clearly see the fragility of the US or Global markets.  This chart is showing a clearly bullish trend with the perception that continued higher highs should prevail.
 

SPY Chart

 

Additionally, when we review the QQQ we see a similar picture.  Although the volatility is typically greater in the NASDAQ vs. the S&P, the QQQ chart presents a similar picture.  Strong upward price activity in addition to historically consistent price advances.  What could go wrong with these pictures – right?  The markets are stronger than ever and as we’ve all heard “it’s different this time”.

 

QQQ Chart

 

Most readers are probably saying “yea, we’ve heard it before and we know – buy the dips”.

 

Recently, we shared some research with you regarding longer term time/price cycles (3/7/10 year cycles) and prior to that, we’ve been warning of a Sept 28~29, 2017 VIX Spike that could be massive and a “game changer” in terms of trend.  We’ve been warning our members that this setup in price is leading us to be very cautious regarding new trading signals as volatility should continue to wane prior to this VIX Spike and market trends may be muted and short lived.  We’ve still made a few calls for our clients, but we’ve tried to be very cautious in terms of timing and objectives.

 

Right now, the timing could not be any better to share this message with you and to “make it public” that we are making this prediction. A number of factors are lining up that may create a massive price correction in the near future and we want to help you protect your investments and learn to profit from this move and other future moves.  So, as you read this article, it really does not matter if you believe our analysis or not – the proof will become evident (or not) within less than 60 days based on our research.  One way or another, we will be proven correct or incorrect by the markets.

 

Over the past 6+ years, capital has circled the globe over and over attempting to find suitable ROI.  It is our belief that this capital has rooted into investment vehicles that are capable of producing relatively secure and consistent returns based on the global economy continuing without any type of adverse event.  In other words, global capital is rather stable right now in terms of sourcing ROI and capital deployment throughout the globe.  It would take a relatively massive event to disrupt this capital process at the moment.

 

Asia/China are pushing the upper bounds of a rather wide trading channel and price action is setting up like the SPY and QQQ charts, above.  A clear upper boundary is evident as well as our custom vibrational/frequency analysis arcs that are warning us of a potential change in price trend.  You can see from the Red Arrow we’ve drawn, any attempt to retest the channel lows would equate to an 8% decrease in current prices.

 

China

 

Still, there is more evidence that we are setting up for a potentially massive global price move.  The metals markets are the “fear/greed” gauge of the planet (or at least they have been for hundreds of years).  When the metals spike higher, fear is entering the markets and investors avoid share price risks.  When the metals trail lower, greed is entering the markets and investors chase share price value.

 

Without going into too much detail, this custom metals chart should tell you all you need to know.  Our analysis is that we are nearing the completion of Wave C within an initial Wave 1 (bottom formation) from the lows in Dec 2016.  Our prediction is that the completion of Wave #5 will end somewhere above the $56 level on this chart (> 20%+ from current levels).  The completion of this Wave #5 will lead to the creation of a quick corrective wave, followed by a larger and more aggressive upward expansion wave that could quickly take out the $75~95 levels.  Quite possibly before the end of Q1 2018.

 

Metals_Wave1C_5_F

 

We’ve termed this move the “Rip your face off Metals Rally”.  You can see from this metals chart that we have identified multiple cycle and vibrational/frequency cycles that are lining up between now and the end of 2017.  It is critical to understand the in order for this move to happen, a great deal of fear needs to reenter the global markets.  What would cause that to happen??

 

Now for the “Hidden Gem”…

 

We’ve presented some interesting and, we believe, accurate market technical analysis. We’ve also been presenting previous research regarding our VIX Spikes and other analysis that has been accurate and timely.  Currently, our next VIX Spike projection is Sept 28~29, 2017.  We believe this VIX Spike could be much larger than the last spike highs and could lead to, or correlate with, a disruptive market event.  We have ideas of what that event might be like, but we don’t know exactly what will happen at this time or if the event will even become evident in early October 2017.  All we do know is the following…

 

The Head-n-Shoulders pattern we first predicted back in June/July of this year has nearly completed and we have only about 10~14 trading days before the Neck Line will be retested.  This is the Hidden Gem.  This is our custom US Index that we use to filter out the noise of price activity and to more clearly identify underlying technical and price pattern formations.  You saw from the earlier charts that the Head-n-Shoulders pattern was not clearly visible on the SPY or QQQ charts – but on THIS chart, you can’t miss it.

 

It is a little tough to see on this small chart but, one can see the correlation of our cycle analysis, the key dates of September 28~29 aligning perfectly with vibration/frequency cycles originating from the start of the “head” formation.  We have only about 10~14 trading days before the Neck Line will likely be retested and, should it fail, we could see a massive price move to the downside.

 

US Chart

 

What you should expect over the next 10~14 trading days is simple to understand.

 

_ Expect continued price volatility and expanded rotation in the US majors.

_ Expect the VIX to stay below 10.00 for only a day or two longer before hinting at a bigger spike move (meaning moving above 10 or 11 as a primer)

_ Expect the metals markets to form a potential bottom pattern and begin to inch higher as fear reenters the markets

_ Expect certain sectors to show signs of weakness prior to this move (possibly technology, healthcare, bio-tech, financials, lending)

_ Expect the US majors to appear to “dip” within a 2~4% range and expect the news cycles to continue the “buy the dip” mantra.

 

The real key to all of this is what happens AFTER October 1st and for the next 30~60 days after.  This event will play out as a massive event or a non-event.  What we do know is that this event has been setting up for over 5 months and has played out almost exactly as we have predicted.  Now, we are 10+ days away from a critical event horizon and we are alerting you well in advance that it is, possibly, going to be a bigger event.

 

Now, I urge all of you to visit our website to learn more about what we do and how we provide this type of advanced analysis and research for our clients. We also provide clear and timely trading signals to our clients to assist them in finding profitable trading opportunities based on our research.  Our team of dedicated analysts and researchers do our best to bring you the best, most accurate and advanced research we can deliver.  The fact that we called this Head-n-Shoulders formation back in June/July and called multiple VIX Spike events should be enough evidence to consider this call at least a strong possibility.

 

If you want to take full advantage of the markets to profit from these moves, then join today at www.ActiveTradingPartners.com and become a member.






September 13, 2017

Gary Savage​ 
Author of

Smart Money Tracker
A financial blog with an emphasis on the secular gold bull market.

Today's Chart of the Day - Breakout Immanent?

Text: "The only resistance left in the S&P 500 is the psychological resistance of the round number 2500".

SPX Chart







September 3, 2017

Gary Savage​ 
Author of

Smart Money Tracker
A financial blog with an emphasis on the secular gold bull market.

Today's Chart of the Day - JNUG

Text: "This chart projects the likely price behavior of JNUG (Direxion Junior Gold Miners Bull 3X ETF) during the rest of gold's current bull market".

JNUG Chart






August 23, 2017

Gary Savage​ 
Author of

Smart Money Tracker
A financial blog with an emphasis on the secular gold bull market.

Today's Chart of the Day - Stock's ICL Complete?

Text: "If we get upside follow through today or Thursday then I think we are done with the correction and the vertical phase of the bubble will begin".

McClellan Chart





August 13, 2017

DOT COM Bubble Do-Over?

Our recent analysis suggests we may be setting up to repeat history in an odd and dangerous manner.  As market technicians, part of our job is to work with numbers, find patterns and attempt to predict future price moves in US and Global markets.  As you can imagine, it is not always easy to accurately predict the future.  Still, we take on the challenge and truly enjoy being able to find and share trading strategy concepts with our ActiveTradingPartners newsletter.  As such, we are sharing this recent technical research data with your today.

 

Recently, the ActiveTradingPartners research team identified a unique pattern in the VIX that allowed us to accurately predict the June 29 VIX Spike nearly 3 weeks in advance.  Also, on July 30th, we predicted a big decline in the NASDAQ during August. It also allowed us to know that VIX Spikes were possible on other future dates – such as the most recent date near August 4th.  Even though the current VIX Spike did not hit exactly on the August 4th cycle date, the actual VIX Spike move happened only two trading days after our predicted date and the VIX has rallied over 90% from recent lows.  Sometimes, analysis like this allows us to know months in advance that a cycle or critical event may have a higher probability of happening.  This allows us to plan and profit from our research.

 

Today’s research correlates to the recent price moves in the XCI index (Computer Technology), NASDAQ and US Majors.  The premise of this research is that the past 4+ years have resulted in a global investment in Technology firms as a result of lower ROI in most other sectors.  This focus on technology investing is uniquely similar to the XCI Index DOT COM rally from the late 1990s and early 2000s.  We are attempting to verify our presumptions and analysis by using core technical analysis techniques as well as fundamental price analysis.

 

We’ll start by looking at the price activity leading up to the 2000 DOT COM bubble burst.  Initially, our analysis focused on the similarities in price action setting up this price move.  The Accumulation, Exuberation/Pause, Hype and eventual CRASH phase.  In 1995, the Accumulation phase initiated after a nearly 95% rally from 13+ months earlier (1994 – 462 weeks total).  Currently, the Accumulation phase initiated after a 100%+ rally from 13+ months earlier (2009 – 427 weeks total).  Subsequently, the Accumulation phase lasted 1057 weeks resulting in a 238%+ advance in 1998.  The current Accumulation phase lasted 1456 weeks resulting in a 77%+ advance in 2014.  Interestingly, the 1998 advance totaled 472.50 pts while the 2014 advance totaled 594.00 pts – resulting in a 125% advance size increase.

 

The Exuberation/Pause phase in 1999 lasted 252 weeks and resulted in a 207.19 pt move (+31.51%).  The Exuberation/Payse phase in 2016 lasted 889 weeks and resulted in a 288.26 pt move (+21.15%).  The more recent phase took 3.5x longer (time) to result in 139% greater price advance (which was actually a reduced percentage move of only 67% of the 1999 advance.

 

Many analysts may be quietly stating, “all of this can be attributed to relationships of percentage values vs higher price valuations”, which is of course true.  Our attempt at dissecting these moves is to try to understand the propensity and strength of any future moves.

 

Lastly, the HYPE phase lasted 39 weeks in 2000 ending with an advance of 895.23 pts (+97.94%) from the PAUSE/FLAG breakout in 1999.  The current HYPE phase lasted 53 weeks ending with an advance of 674.54 pts (+40.26%)  from the PAUSE/FLAG breakout in 2016.  The resulting current HYPE price advance is 25% lesser than the 2000 move and results in a nearly 60% decrease related to the total percent swings.

 

2000 DOT COM – XCI Index Chart

Computer Tech

 

2017 DOT COM – XCI Index Chart

Computer Tech

The 2000 total phase advance lasted 220 weeks and resulted in a price advance of +1607.53 pts (+802.39%).  The 2017 total phase advance lasted 436 weeks and resulted in a price advance of +1878.21 (+402.97%).  The percent values of each move represent vastly different results, yet the total price moves differ by only 17%.  We are certain some of these values and percentage representations are sparking interest in some of you as you may understand Fibonacci, Gann and other price analysis techniques.

 

The key to understanding these similarities is to understand the price sometimes moves in similar, not exact, setups and that we should never discount the possibility that markets are setting up for another massive move.  Considering these price and relationship values, it is our perception that any global event, liquidity collapse or massive terrorist event could present a scenario that may result in a repeat of the 2000 DOT COM market collapse.  Our premise is that the US has been an investment safe harbor for many and that Technology (FANGs and others) have benefited greatly from the global market weakness over the past 7+ years.  It is our opinion that the capital that has been allocated into these global technology giants has, as in the past, setup a potential for history to repeat itself (given the right type of events/circumstances).

 

COMBINED DOT COM – XCI Index Charts

Computer Tech

Our recent VIX Spike analysis shows we should expect future VIX Spikes on Aug 23rd, Sept 11th or 12th and finally Sept 28th or 29th.  Assuming the relationship between the current price setup and the past setup is relative to the types of relationships we’ve studied so far, we can predict the following :

 

The initial swing low after the ultimate high (2000) resulted in a 572.02 pt move (a 31.62% correction over 10 weeks).  Any current correction could result in an 8~15.5% price correction over 7~15 weeks.  This would put our estimates of a price low near 2152~1980 on or near Sept 25th or Oct 23rd.  This price low would be followed by 4~12 weeks of price advance setting up a right shoulder near 2150~2256 (possibly).  Following that, we would see the low price rotation broken by extreme selling pressure and ultimate low target near 770~581 (resulting in a 63~69% correction from the highs).

 

Do we know this WILL happen?  NO.  Can we estimate the probability of it happening as we predicted? NO.  How can we tell if this will play out as we are predicting?  If the market continues to break down and begins to form the right shoulder, then we would consider, at least this first phase, to be technically accurate.  If it fails to move lower to establish this move, then we would consider this a technical breach of our research and attempt to reevaluate our theories.

 

Thus, what we can do at this point is alert you to the potential that a massive Head-n-Shoulders formation may be setting up in the global/US markets related to a potential Tech Bubble.  The proof will come with confirmation of our analysis or the failure of our analysis as price plays out over the next few weeks.

 

Still, the correlation of the VIX SPIKE dates,  Aug 23rd, Sept 11th or 12th and finally Sept 28th or 29th, are interesting because our initial analysis of any price low indicates a potential low price date range near September 25th.  Should this become true, an 8~15% correction in the XCI would clearly result in a 4~9%+ correction in the NQ and would correlate with our VIX Spike analysis almost perfectly.

 

The only thing we can do is be aware of these relationships and price patterns that are setting up and plan our trades properly.  Every trade includes risk, attempting to manage that risk is the objective of most traders.  At this point,  Aug 23rd, Sept 11thor 12th and finally Sept 28th or 29th are critical dates to keep in mind as the future plays out before us.  Watching for these moves and being aware that they could be setting up for a massive price swing lower are important factors to consider and being able to protect open LONG positions would not be a bad idea over the next few months.

 

The only way one can tell if predictions of the future are going to be accurate or not is to wait for the future to get here and see how well these predictions worked out.  So, we wait with the understanding that we are watching for confirmation or failure of our analysis with each week.

 

If you like our research and analysis and want to learn more about our forecasting and trade alert services, to see what we can offer you. We provide daily market updates, clear and concise trading triggers/signals, advanced research and analysis of the US and global markets and more.

 

Chris Vermeulen
www.ActiveTradingPartners.com






THE DIVERGENCES ARE NOW APPEARING!

The loss, of the leadership of the banking and financial sector, BKX ETF, is now a major warning signal which is what is required in order to move the SPX much HIGHER, at this time!

bank1

 

The divergence which is currently being seen between the Dow Industrials and Dow Transportation indexes will be coming into play in the upcoming weeks.

bank2

The U.S. dollar has declined to a 52-week low. When stocks have been at a high and the dollar at a low, historically, the SPX showed a positive return within six months to one year, almost without exception.  I see support in the 92.50 area.

Bank

I would expect to see a very quick “oversold” bounce in GLD, then a correction to the 105 to 107 areas as the final “washout bottom” is put into place.

Bank

My approach to the markets is to be flexible enough to handle the possibilities of much stronger and weaker sustained trends than what we have seen in our investment lifetimes.

Our portfolio has outperformed the SPY by over 114% this year.  Quite a feat when you consider the SPY is up nearly 9% this year and has almost gone straight up since January 2017.

We like to ask our clients and viewers this question, “isn’t it time you invested in your future?”.  We would really like to help you achieve greater success and find greater opportunities in the markets, but you have to subscribe for this to happen.

 

Conclusion:

In short, active traders should be defensive over the next few days as we could have one more bout of selling in stocks and a spike in the vix. I feel the best plays right now will be short metals, short oil, long dollar.

Stay tuned for more updates, and be sure to join our stock picks newsletter, or our ETF trading newsletter for real-time trading signals.





August 6, 2017

Gary Savage​ 
Author of

Smart Money Tracker
A financial blog with an emphasis on the secular gold bull market.

Today's Chart of the Day - Focus on the Easy Money

Text: Let me show you why I keep stressing that traders should focus most or all of their capital on the stock market.

Nasdaq Chart



Dailydart




Dailydart.com Previous, 2017