Author: Chris Vermeulen

Custom Valuations Index Suggests Precious Metals Will Decline

Posted on by Chris Vermeulen

My team prepares Custom Valuations Index charts to understand how capital is being deployed in the global markets alongside US Dollar and Treasury Yields. The purpose of the Custom Index charts in this article is to provide better insight into and understanding of underlying capital movements in various market conditions. Recently, we discovered the Custom Index chart shares a keen alignment with Gold (and likely the general precious metals sector). Let’s explore our recent analysis to help readers understand what to expect next in precious metals.

Weekly Custom Valuations Index Chart

The first thing that caught my attention was the very clear decline in the weekly Custom Valuations Index recently, as can be seen in the chart below. The second peak on the Custom Valuations Index chart occurred on the week of August 3, 2020. Gold also peaked at this very same time. This alignment started an exploratory analysis of the Custom Valuations Index and the potential alignment with the precious metals sector.

Custom Valuations Index

The peak in the Custom Valuations Index on March 20, 2020 (near the height of the COVID-19 market collapse) presented a very clear upside target which was confirmed with a second peak level in August 2020. The fact that the Custom Valuations Index reached that peak level again and that peak level also aligned with the peak price in Gold may just be a coincidence. As we continue to explore this unique alignment, we’ll explore more unique characteristics to see if there is a link that is more than mere chance. Continue reading "Custom Valuations Index Suggests Precious Metals Will Decline" →

Will 2021 Be The Year For Cannabis Stocks?

Posted on by Chris Vermeulen

Great progress in terms of legalization was made for the Cannabis/Marijuana sector in 2020 that will. The 2020 elections resulted in a number of US states engaging in new Cannabis friendly policies and laws being approved by voters. This suggests a new rally in the Cannabis sector may be setting up in 2021 and beyond for traders. Our BAN – Best Asset Now – trading strategy is always looking out for the next sector to make a trade, and the Cannabis sector is certainly one we are keeping our eyes on! Make sure you sign up for my FREE webinar to find and trade the Best Assets Now just like me.

Weekly MJ Price Flag Setup

My research and I team believe the recent longer-term bottom in the MJ ETF, the Alternative Harvest ETF, suggests a broad bottom is setting up in the Cannabis/Marijuana sector. If this bottom in the Cannabis sector continues to profit support for the entire sector, then we may see price appreciation across many individual Cannabis stocks over the next 12+ months. Additionally, this price appreciation may prompt quite a bit of consolidation across the entire Cannabis/Marijuana sector.

The global use and demand for CBD & THC related products may continue to expand as medical and personal use expands across the US and into other nations. We are still near the infancy of understanding the true medicinal benefits of this all-natural product. A new upward price trend in this sector may prompt a global expansion/consolidation event where the Cannabis/Marijuana industry attempts to restructure into true global power companies. Continue reading "Will 2021 Be The Year For Cannabis Stocks?" →

Has Bitcoin Reached Its Peak?

Posted on by Chris Vermeulen

We hope you enjoyed the brief holiday break… it seems Bitcoin has been busy while the markets have been resting! Bitcoin enthusiasts are adamant that the price rally has just started a parabolic move higher. From a technical standpoint, this current rally certainly appears to have gone parabolic. As any trader already understands, what goes up may eventually come crashing downward.

My research team and I believe failure at the current highs would represent a clear technical divergence pattern between price and the RSI indicator. Additionally, the current rally that started on December 20 consists of a $10,850 rally phase. The previous rally from October 20 to December 2 consisted of a $9,200 rally phase. We believe this current rally phase from December 11 could be a Wave 5 rally (almost equal to the Wave 3 rally range). If our researchers are correct, this final rally phase could come crashing downward after reaching these peak levels above $28,000.

This 4 Hour Bitcoin chart highlights the incredible price rally that has taken place over the past 16+ days – a rally of over $10,000. It also highlights two very clear price rally phases – creating an A-B-C price wave pattern.

Bitcoin

This Daily Bitcoin chart highlights the two, almost identical in size, which has created a price peak above $28,000. It also highlights the technical divergence between price and the RSI indicator in the lower pane. Continue reading "Has Bitcoin Reached Its Peak?" →

Stock Market Ready For A Pause

Posted on by Chris Vermeulen

Weeks after the Election Rally initiated a moderately strong upside breakout rally, our Custom Index charts suggest the US stock market may be ready for a brief pause in trending before any new trends continue. Global traders and investors jumped into the US stock market just days before the US elections expecting something big to take place. The rally that initiated just days before the US election pushed our Custom Index charts well into the upper range of the 2016 to 2018 upward sloping price channel. This suggests the US stock markets have ended the downward price reversion and are now attempting to extend into the upward price channel – attempting to resume the upward trending that started after the 2016 elections.

Weekly Smart Cash And Volatility Indexes

The Weekly Smart Cash Index, below, highlights the impressive rally recently and the upward sloping price channel that is back in play for price. The highlighted range of the upward sloping price channel is actually the lower half of the std deviation range of the 2016 to 2018 price channel. So, as of right now, the Smart Cash Index price level has yet to really breach the middle of this channel and is still only within the lower half of the channel. Still, the support near the lower boundary of this level has been retested two or three times over the past six months and held. This suggests the lower channel level (the lower heavy BLUE line) is now acting as moderate price support.

stock market

The speed of the recent upside price rally on this Smart Cash Index chart suggests that current price congestion may be an indication that the US stock market has reached a point where it will pause and stall a bit before attempting any new rally. From the recent lows near the end of October to the current highs, the current rally represents a 50% Fibonacci price expansion of the range from the March 2020 lows to the highs in August 2020. The 50% expansion range is a very common Fibonacci level that can typically prompt market price pauses or reversals. Continue reading "Stock Market Ready For A Pause" →

How To Spot The End Of An Excess Phase - Part 2

Posted on by Chris Vermeulen

In Part I of this research article, my research team and I highlighted the five unique components of an Excess Phase peak and breakdown process. We are sharing this data with you because we believe the US stock market has already meandered 2.5 years past the end of a US Stock Market Appreciation phase and is well into an Excess Phase Peaking process. This becomes very important for traders because risks are much higher in these late Excess Phase stages because volatility is usually 4x to 6x higher than previous phases. Additionally, psychologically, many traders want the rally to continue and deeply believe the end of this phase is “just a pullback in a bigger trend”. This can be very dangerous as traders sometimes continue to buy into deeper price corrections – leveraging their accounts to the hilt thinking “they are going to make a killing when the rally resumes”.

Exploring Past Excess Phase Peak/Breakdown Events

Excess Phases and Blow-Off Peaks/Bottoms can become very addictive for certain people – especially those that have gotten into the trend before the Excess Phase began. These people are often “die-hard” believers that the trend will never stop rallying and can sometimes leverage themselves into very dangerous positions.

If you recall from the first part of this research article, there are five phases to the Excess Phase price decline and we believe each of these five phases is fairly common for all excess phase breakdowns: Continue reading "How To Spot The End Of An Excess Phase - Part 2" →