Tag: Chris Vermeulen

Is Real Estate The Next Shoe To Drop?

Posted on by Chris Vermeulen

The past few weeks and months have been very interesting to see how the global central banks and governments have attempted to position themselves ahead of this COVID-19 virus event. We continue to suggest that we are just starting the process of navigating through this potentially destructive virus event. We believe the sudden onset of the virus pandemic has sent a shock-wave throughout the globe in terms of expectations and valuations that are, just now, starting to become “real”. Let us try to explain our thinking and how this relates to Real Estate.

The COVID-19 virus event is a global crisis event that is currently in the very early stages of consumer psychological processing. All types of crisis events prompt some forms of typical human reaction. We believe the Real Estate market may be the next big asset revaluation event as consumers continue to process the COVID-19 virus crisis and the consequences of this event.

Real Estate Cycles

Real Estate cycles typically transition through the following phases as supply and demand functions work through the markets. Pay attention to the middle of this cycle chart. In the Expansion and HyperSupply stages, once supply peaks and prices somewhat peak/stabilize, a transition takes place in the market where buyers chase premium properties and push price levels moderately higher. The Recession Cycle is typically a disruptive cycle that is the result of an economic/income disruption. When people can’t earn enough to satisfy their debt obligations and or provide for their families, then the Real Estate cycle begins to contract.

Real Estate

An event like this, the COVID-19 virus event, would typically start out as a regional/local event. This did happen as it roiled certain areas of China in late 2019. Watching how China attempted to manage and hide the extent of the virus explosion within their country was painful to watch. Continue reading "Is Real Estate The Next Shoe To Drop?" →

Are Silver & Gold Mirroring 1999 To 2011 Again?

Posted on by Chris Vermeulen

Today, we are writing about a pattern that our research team sees in the Gold/Silver ratio which is correlated to the price movement of Gold. What does this mean and how can we profit from this setup? Let’s get started trying to explain this chart pattern/setup.

Gold/Silver Ratio Chart From A New Angle

This first chart highlights the pattern we have identified and how we believe a similar pattern is setting up again in the current market. The setup of the pattern is explained in the text below, but quickly scroll down and look at the first chart and the pink shaded areas “A” to get an idea of what we are talking about.

Prior To “A” Pattern Setup

After a moderate price decline in Gold (1996 through 2001), a bottom sets up as the price of Gold begins to base near support.

The Gold/Silver ratio (BLUE), falls throughout this pattern setup as both Gold and Silver prices decline somewhat in unison. Continue reading "Are Silver & Gold Mirroring 1999 To 2011 Again?" →

Concerned About The Real Estate Market?

Posted on by Chris Vermeulen

Our continuing research into the state of the real estate market suggests the Covid-19 virus event will likely put extreme pressure on many sectors within the US and global markets. This, Part III of a multi-part research article, will highlight many of the key economic data points that will soon be released and how these numbers may shock the markets. Additionally, as consumers and businesses prepare for an extended shutdown, it is important to understand the psychological process that takes place in the minds of people. PART I, PART II

Initially, people naturally hope for a quick and reasonable solution. As the process continues where an extended shutdown of the US economy persists, consumers and business managers change their expectations from optimism for a quick resumption of economic activity to “how do we survive this extended closure event”. This is when traders and investors really need to pay attention to what is happening in their local and national economies. One of the most important things to consider throughout an event like this is to watch how your local economy is operating and what is happening with local consumers. This will help you understand what is happening elsewhere.

Demand for certain items will continue almost as normal. We call this the Personal Consumer Essentials. These items are typically things like toilet paper, toothpaste, over the counter medications, underwear, food, and water. These are the types of purchases that must continue for average people to survive this type of event. Luxury items, vacations, extras, and other purchases may suffer throughout this process.

The first 30 days will likely be a transition period for many consumers. Remember, this is still the “hope” phase where Continue reading "Concerned About The Real Estate Market?" →

Has The Equities Waterfall Event Started?

Posted on by Chris Vermeulen

Or is this a buying opportunity? Over the past 5+ days, a very clear change in market direction has taken place in the US and global markets. Prior to this, the US markets were reacting to Q4 earnings data and minimizing the potential global pandemic of the Coronavirus. The continued “rally to the peak” process was taking place and was very impressive from a purely euphoric trader standpoint. Our researchers found it amazing that the markets and the Dow Jones Industrial Index continued to rally many weeks after the news of economic contraction and quarantines setup in China/Asia.

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We believe a number of critical factors may have pushed global investors away from their comfortable, happy, bullish attitude over the past 5+ days – most importantly the reality that the virus pandemic was very real and would continue to result in a more severe global economic contraction process and the outcome of the Caucus voting where Bernie Sanders appears to be leading almost every early voting event. There are now two major concerns hanging over the global markets and the future of the US 2020 Presidential elections. These two major issues may be enough to change investor sentiment and present a very real volatility event.

Uncertainty breeds fear and can cause traders to move away from risk. We discussed these topics in research posts many months ago. Continue reading "Has The Equities Waterfall Event Started?" →

2020 Stock Market - What To Expect

Posted on by Chris Vermeulen

Quite a bit has changed in the global markets and future expectations over the past 4+ weeks. Q4 2019 ended with a bang. US/China Trade Deal, US signing the USMCA Continental Free Trade Agreement, BREXIT and now the Wuhan Virus. On top of all of that, we’ve learned that Germany and Japan have entered a technical recession. As Q4-2019 earnings continue to push the US stock market higher – what should traders expect going forward in 2020?

Volatility, Sector Rotation, and Continued US Stock Market Strength.

Our researchers have been pouring over our charts and predictive modeling tools to attempt to identify any signs of weakness or major price rotation. There are early warning signs that the US Stock Market may be setting up for a moderate downside price rotation within the first 6 months of 2020, but we believe the continued Capital Shift that has been taking place over the past 24+ months will continue to drive foreign investment into the US and North American stock markets for quite a while in 2020 and 2021.

The interesting component to all of this, which should keep investor’s attention and really get them excited, is the chance that some type of foreign market disruption may take place in 2020 and 2021. There are a number of things that could potentially disrupt foreign market expectations.

First on the list is this virus event in China (that seems to be spreading rapidly). Second would be the news that Japan and Germany have entered a recession. Further down the list is the very real possibility that many Asian and foreign nations could see a dramatic decrease in GDP and economic activity throughout much of 2020 and 2021.

It is far too early to make any real predictions. Still, traders need to be aware of the longer-term consequences of global markets entering a contraction phase related to a confluence of events that prompts central bank intervention while consumers, financial sectors and manufacturing and industrial sectors are pummeled. Imagine what the global markets would look like if Continue reading "2020 Stock Market - What To Expect" →