Closing out the first week in June 2019, the US stock market
rallied hard from recent lows and prompted many traders/investors to rethink
their future plans. At the same time, Gold
and Silver began a decent price rally of their own while Oil found support just
above $50. It certainly has been an
interesting week for traders. One that
was full of incredible opportunity as many symbols rotated 6 to 12% or more
over the past 10+ days.
The fact that Oil is finding support above $50 while Gold and
Silver continue to rally suggests that fear may be entering the metals market
while Oil may have found a temporary price bottom near $50 to $51. Weakness in the US Dollar is also helping
both Oil and Metals to push higher. Our
recent research suggests that the US Dollar will find support near $95
indicates the US Dollar may fall a bit further – pushing Oil and Metals a bit
higher.
The strength in the US stock market near the end of the week
suggests fear of any US collapse or future economic concerns appears to be
abated. It is very unlikely the US major
indexes would rally as they have on any extreme fear of any major US calamity
or economic concerns. A slightly
weakening US Dollar and moderately strong US economic data continues to suggest
the US stock market may continue to be the repository of funds for foreign
investors for many years to come – or until something dramatic changes in the
US.
It is rather simple to understand the capital process that is
at work in the global economy at the moment; until foreign market valuations
and expectations appear to be opportunistic for future returns, the US Dollar
and the US stock market are the most likely targets for foreign investment and safety. Weakening currencies, weakening global
economies and weakening commodity prices will push capital away from foreign
markets and into safety. Safety will be
found in the US markets, precious metals and possibly Crypto currencies. Anything that avoids deflationary risks and
credit/debt risks.
This YM Weekly chart highlighting our Fibonacci price
modeling system shows how dramatic the upside price reversal was by the end of
last week. The closing candles created
an Engulfing Bullish candlestick pattern which is typically quite bullish. The fact that price closed above the GREEN
Fibonacci trigger level is further indication that a renewed price rally may
begin soon. Support near $24,000 appears
to be quite strong and any further downside price risk must first break this
level. As long as support holds and
price continues an upside bias, there is a very strong potential for a move to
above $28,000 in the works.
This NQ chart highlights a similar price pattern and suggests
the NQ needs to climb above $7600 before a true rally can begin. Ultimately, the upside targets for this move
are near $8500 or higher based on current price rotation. Support near $6800 is critical – so price
must stay above this level for any future rally to continue.
We authored a VIX/Volatility article just a few days ago that
highlighted our believe that the VIX would trade lower, within a sideways price
channel till near the end of July or August 2019 – then begin another VIX Spike
move upward. This coincides with the
current research we are seeing where the US stock market will likely continue
to push higher, very possibly setting new all-time highs again, before any real
risk of any downside price collapse happens.
Follow our research and don’t miss these opportunities. We’ve been warning our followers for months that 2019 and 2020 are going to be incredible years for skilled traders. These recent 10 to 20% moves in Gold, Silver, Oil and many ETFs are just the beginning. Our research team and trading team are ready to help you find and execute for better success.
Chris Vermeulen
www.TheTechnicalTraders.com
