VIX is still below the Vidya, currently 26.50 on this weekly chart. We might have avoided a market plunge.
OEXTrader.com
THOUGHTS ON GOLD BREAKING $2000
Reading Time:2minutes
This summary covers a small section of a live mentoring session with investors that focuses on the price of gold.
Three key points were discussed in this conversation:
The
potential for a new major breakout in gold’s price: Brian and I note
that gold is trading around the $2000 mark and could either break out
to new highs or experience a failed reversal. We also highlight gold’s
resilience compared to other assets such as silver and gold miners,
attributing this to its status as a global reserve currency.
The
significance of the $2000 price level: We discuss the importance of
gold holding above $2000 for more than just a couple of days and the
need for a retest of this level after a pullback. A sustained move
above $2000 would signal increased confidence in gold’s rally.
Concerns
about gold price fluctuations driven by events: We express concern that
gold’s price spikes are often driven by events such as wars or banking
crises, which could lead to false moves and rapid reversals. We
emphasize the need for gold to consolidate and hold ground rather than
spiking on news events.
Additionally, we briefly discussTheGoldOilGuy.comnewsletter,
which offers momentum and swing trading insights for short-term active
traders focusing on precious metals and other assets.
Gold
may still drop to $1400-$1500 in the next 6-12 months, this clip only
covers what to look for with gold if it breaks out. The next clip Ill
post covers why gold looks like this is a false rally and will reverse.
ONLY ACTIVE TRADERS SUFFER FROM THIS HORRIBLE PAIN & COSTLY MISTAKE
Reading Time:9minutes
Last
week was wild for stocks and commodities after the Silicon Valley Bank
defaulted and the government bailed out SVB’s clients. While the Fed
and other authorities across the pond recently swore the banking system
and banks are much better than they were during the 2008 financial
crisis, having one of the top US banks default just 48 hours later is a
little ridiculous. Both the USA and European leaders continue to tell
us the banks are strong, but after last week, can we really trust the
leaders that support the financial system anymore? By that stretch, can
we really even trust the financial system itself anymore, either? In my
opinion, not entirely, that’s for sure.
Last weeks big bad key points…
SVB imploded within 48 hours, which could have wiped out thousands of companies because they lacked risk management.
Government bails out SVB customers within 48 hours to protect companies.
The
US and European leaders state the banking system is much stronger than
in 2008, which seems like a lie, but they are doing a good job covering
things up as they try to ‘handle’ the crisis.
All this may be closer to home than you realize
If
you look into how your retirement account was managed over the past few
years, you may realize that your financial future and retirement could
be at serious risk. For example, if you just held onto positions and
rode out the 40% correction in bond prices from the high in 2020 and
did the same during the significant stock market correction in 2022,
your assets were undermanaged. This is a problem that needs to be
corrected, especially if you are over 50 and approaching or in
retirement. To be blunt, you no longer have time to recover from major
market corrections. If you cannot see that, then I am sincerely worried
for you.
My
focus is to help anyone with investment capital who wants to protect it
during the next financial reset, and not have to downgrade their
lifestyle due to inflation and falling asset prices. If that’s you,
keep reading because holding onto assets falling in value is a terrible
investment strategy. The buy-and-hold method that got you to where you
are today does not work if you are over 50. Instead, it could destroy
your retirement and lifestyle faster than you ever imagined.
Ok,
I got off onto a little rant there, and I apologize. But whenever I get
talking about the financial and banking systems and how they screw the
very people they purport to protect, I get a little worked up and can’t
help trying to warn others.
I think it was Ric Edelman, ranked by Barron’s as America’s #1 independent financial advisor at one point, said it best:
“There
is no greater pitfall than the one created by the retail investor
industry. They are ripping you off. You are incurring greater risks,
lower returns, and higher fees than you realize, and as a result, you
are in danger of not achieving your financial goals.”
Alright, so let’s get into the main reason for this post!
The Pain Active Traders Suffer from…
Last
week was wild, with stock and commodity prices popping and dropping all
over the place. And while it was not a surprise to my followers and me,
it was stressful for almost everyone else, especially active traders
watching these big intraday price swings from the sidelines.
On Thursday afternoon, I sent out an update to those who follow my analysis, which was well received.
This is a summary of what I said Thursday afternoon:
A
strong rally today with technology, growth stocks, and regional banks
lead the way higher. The VIX remains high, we had panic selling
yesterday, and today is the opposite, with our FOMO buying indicator
spiking.
This is a volatile market, and
I prefer being on the sidelines. I want to share a great example of why
that is from an email I received today from someone about to join our
group. This person wanted to make some trades before joining our
newsletter to see if he could make some quick money in this fast-moving
market.
Unfortunately, the email turned
into a sad story, and I could tell this person was suffering badly from
the financial outcome and emotional stress weighing on him. His story
explained how he lost almost $100K, messing around with his portfolio
in some stocks, and is now kicking himself for falling victim to greed
and feeling the need to satisfy the rush of active trading.
I
can’t stress enough how important it is to sit on your hands, take
small losses to avoid more significant losses, and follow a strategy
versus shooting from the hip and swinging for the fences for the
so-called easy money. I try to preach this in some way every time I
communicate with traders and investors.
To
be very articulate and to the point – there is no such thing as easy
money in the stock market. You might hear of or experience an easy (aka
lucky) win, but unless you spend hours of time learning and
understanding investing, trading, and the market itself, you will give
every cent of that money back…and probably more.
From
helping fellow traders and investors for over 25 years, I know for a
fact that most active traders struggle with trading less and watching
the market from the sidelines. They feel more pain by waiting in cash
than they do when stimulated with trades and taking losses.
The
unfortunate part about that is it’s hard on the pocketbook and does not
get them to where they want to go in the long run. Nothing good comes
easy or fast (generally).
Tomorrow should be another interesting session, Chris Vermeulen
Later that day…
I received a few emails and stories from followers, which really made my day and may also connect with you and your struggles.
Reply From Investor #1:
Chris,
This
jumped out at me from your update this afternoon: “Active traders feel
more pain by waiting in cash than they do when stimulated with trades
and taking losses.”
I recognize that in me in spades. It’s horrible but true. I totally believe that.
I
think that pain is akin to why men won’t stop and ask for directions.
Guys will drive around for an hour before we will ask for directions.
The
lethal version of that impulse I have personally seen in hiking. I’ve
been a backpacker since I was 14 (now I am WAY older) and have hiked
all over Oregon and California. I’ve experienced this myself: when lost
(really lost), there is a strong impulse to just keep going, expecting
and hoping you will stumble back onto your trail. We all know; hope is
not a strategy. We need to sit down, breathe, drink some water, pull
out your compass, look at the sun, look at your watch and altimeter (or
GPS), and then pore over your map. Pretty soon you get oriented north
and south, then to the map, and then you can plot a heading that will
take you to your trail (or water).
It may cost you some time, but the alternative is not good.
John
Reply From Investor #2:
Hi Chris,
It
has now been a little over one month since I joined you. I used to have
a problem being in cash… but NOT now. Thanks for the constant daily
reminders of how important it is to avoid any big drawdowns.
Edward
Reply From Investor #3:
Hi Chris,
I am a relatively new subscriber, and I just wanted to share my experience with you.
I
really appreciate the experience you have and the way you have set up
your strategies. I also very much appreciate Brian – his calm demeanor
and his thoughtful and thorough analysis of charts and situations.
I
find it very useful how you are able to explain and teach about the
intricacies of the markets in the BAN Morning Updates – and mentally
prepare traders for the day’s action.
I’m
not really an active trader- I like more of the longer swing trades – I
first encountered your style and technical mastery in an article
entitled “Three Charts Every Trader and Investor Must See”. This was a
few years ago – maybe early 2020. I eventually got around to buying
your book – and exploring Technical Traders’ website. I started slowly
with a TTI membership and listened in on the mentoring sessions.
I
learned more about CGS and BAN. I like how you have the big picture –
looking at money flows and technical patterns in all different types of
financial instruments. I also like the chart system you have and how
you can look at historical patterns and cycles.
I
have had money in the stock market since the late 1990s – I did pretty
well into 2000, then lost a lot of it, and have gradually worked my way
back. A few years ago, I bought a lot of Apple stock and let it run
during the bull market. I started selling covered calls so that I could
keep my Apple shares and still make some extra money.
Along the way, I learned the hard way to limit trading losses and preserve capital.
In
addition, I have learned a lot from your approach and from watching
your strategies. I also have learned a lot from your explanations of
the market and economic cycles.
I could go on and on – but I really just wanted to say thank you.
Rodney
Concluding Thoughts:
In
short, active traders often suffer from horrible pain and costly
mistakes that they can avoid. The recent market volatility has
highlighted this fact, and while it may be tempting to try and make
quick money in a fast-moving market, it often leads to significant
losses and emotional stress.
Most
active traders struggle with trading less and watching the market from
the sidelines. They feel more pain by waiting in cash than they do when
stimulated with trades and taking losses. As an investor or trader, it
is crucial to understand the value of, and put into practice, sitting
on your hands, taking small losses to avoid more significant losses,
and following a strategy instead of shooting from the hip and swinging
for the fences.
It
is essential to have a strategy to protect your investment capital
during the next financial reset that will result in not having to
downgrade your lifestyle from inflation and falling asset prices. As an
investor, it is vital to avoid being ripped off by the retail investor
industry and not continuing to fall victim to the traditional
buy-and-hold strategy when it no longer serves you. Instead, decide,
choose, and then follow a strategy that you understand and are
comfortable with that can help you achieve your financial goals and
secure your retirement. For example, I use the CGS strategy.
If
you are 50+ and believe the buy-and-hold strategy will keep working for
you into retirement and won’t hear of anything else, I can’t help you.
Just know that it’s only a matter of time before the next major market
correction takes place and plunges you into a very new and scary
reality. To find out if or why you need help, read this post: two silent killers that destroy retirement dreams, and read this post: the most damaging thing you will suffer – sequence of returns risk.
If
you are an active trader, convinced that you must always be in trades
and that if there are big swings in the market, you should be catching
them all no matter the timeline, well…I can’t help you either.
If you have an open mind and want to become wealthier during retirement vs. poorer, I can help you.
We might be near the top of the range for this gold move around 186. Possible divergences on the lower indicators.
OEXTrader.com
IS THE STOCK MARKET SETTING UP FOR A 2008 STYLE CRATER?
Reading Time:2minutes
Get ready for a stellar interview as Chris Vermeulen gets down to business with David Lin on his new channel, The David Lin Report!
Which
way is the market going to go? The technicals on the S&P500 show a
weakening trend that, should it break through the channel support,
could begin a serious leg to the downside. Having said that, the market
is also testing the 200-day moving average, and if it finds support,
could actually swing to the upside.
Five Key Topics Covered:
How
you can leverage sentiment indicators of what the masses are doing on
the New York Stock exchange to give you an idea of when short-term
bounces and pullbacks may happen.
How
long will we stay in the stage three topping phase before finally
toppling into a stage four decline? Is there a way to take advantage of
the decline?
How cycles work in the stock
market. Timeframes, standard deviation, momentum, sentiment, defensive
plays, and technical analysis all work together to create wave-like
patterns and result in generating signals to enter or exit the market.
How
valuations can cause you to lose focus on how an asset is actually
performing. Value is simply what people believe an asset is worth,
having arrived at this figure by way of marketing, mass movements, word
of mouth, etc., rather than price action.
How
do you pull profits out of the market while still protecting your
capital? When investing or trading in the stock market, using risk and
position management is a far superior strategy than hope ever will be.
Are we going to tag the weekly T3 indicator, or was that that it for the GLD move?
OEXTrader.com
IS THE STOCK MARKET STARTING A NEW BULL MARKET RALLY?
Reading Time:5minutes
It has been a while since I have written a simple technical analysis article. My focus has been on helping teach others
how the markets move and to trade and invest differently, so I
apologize for the lack of chart analysis over the past several months.
With
that said, the market could be starting something big and exciting,
which brings new opportunities, and, eventually, some massive risk for
investors. I cover my outlook in much greater depth in this screen share video I did with Craig Hemke.
As
an active trader relying solely on technical analysis and risk and
position management, the recent rebound in major stock indexes is an
encouraging sign. The past month had been weak and was starting to
spook average market participants.
We
watched the masses panic out of positions last week and bought put
options, betting heavily for a collapse on Thursday and Friday, but the
opposite happened, as expected. I feel bad for these suckers who trade
purely on emotional impulse. They take beating after beating until they
give in and decide to learn how the markets move and manage positions
and risk or give up on trading.
Anyways, onward and upward!
Buyers
have stepped in and are supporting prices, and these rebounds are
occurring at important moving average lines. I’m paying close attention
to the 200-day moving average lines on the major indexes.
This
is significant because no matter how good of a trader you are, if you
don’t know short-term and long-term trends of the broad stock market,
your odds of consistently winning trades and growing your account drop
to about 30%. With that said, let’s jump into some charts!
Dow Industrials Daily Chart
Looking
at the Dow Industrials Chart, it’s bounced off potential support along
its late December low and its 200-day moving average. This is a
positive sign, as it keeps the sideways trading range intact.
It’s
also to keep in mind that the longer a chart trades sideways, the
larger the next breakout should be. This three-month pause could pack a
powerful punch/rally if the market continues this move.
S&P 500 Daily Chart
The
S&P 500 looks to have found support and started a reversal from its
200-day line on Thursday and gained more ground on Friday.
Nasdaq 100 QQQ Daily Chart
The Invesco QQQ ETF has also bounced off its 200-day average, indicating that there’s strong support at this level.
Small Cap IWM Daily Chart
As a technical trader,
I’m always looking for signs of strength and weakness in the market,
and small-cap stocks have been standing out as a particularly strong
area of the market in recent months. Despite the overall weakness in
the markets in February, small-cap stocks have held up better than
their larger counterparts, which is a promising sign.
I
can see that the Russell 2000 iShares is well above its 200-day moving
average, which is an important level of support. This indicates that
there’s still a strong bullish sentiment in the small-cap space.
ARKW Daily Chart (Momentum & Growth Stocks)
It’s
worth noting that small-cap and growth stock leadership is typically a
positive sign for the broader market, as these stocks tend to lead the
way during market rallies. As a technical trader, I’m encouraged by the
strength of these stocks and will continue to monitor this market area
for potential trading opportunities closely. I also feel thatgold, silver, and miners could come back to life.
Earlier
in February, subscribers and I locked in gains with ARKW at 7% and 15%
gains. We also locked in 7% in SMH and 10% with QLD. Another big rally
in these types of stocks could be starting once more, which I plan to
take advantage of using my Best Asset Now (BAN) ETF strategy.
Concluding Thoughts:
In
short, last week, the market may have turned a major corner that could
last a few months. I feel it will catch a tone of traders off guard,
and then, once this move is complete, the following move will destroy
most investors’ accounts and retirement dreams, but we can talk about
that another time. It’s a little way away still.
Overall,
the market remains in what I call a Stage 3 topping phase, and the key
is to protect our capital and not be swinging for the fences until the
next tradable stage starts, which would be Stage 2 or Stage 4.
One blue bar on our OEX RSI oscillator. Sitting at the upper Keltner though.
OEXTrader.com
DIWORSIFICATION: THE PROBLEM WITH SPREADING YOUR PORTFOLIO TOO THIN
Reading Time:4minutes
Please Share This Post
The
concept of diversification has long been hailed as the holy grail of
investing. The idea is that spreading investments across different
asset classes may reduce risk and create a more stable portfolio.
However, there is a growing concern that diversification can lead to
over-diversification and a poorly performing portfolio. This is known
as diworsification.
Diworsification is a
result of adding assets to a portfolio simply for the sake of
diversification without considering whether those assets will actually
benefit the overall investment strategy.
What
most investors don’t realize is how strong the correlation is between
most stocks, sectors, and indexes. It does not matter which group or
type of stock an investor holds in their portfolio. The bottom line is
that when the stock market falls, almost all stocks fall. The main
difference is that some fall more than others, and there aretwo silent account killers that destroy retirement dreams.
Meaning that investors who spread their money out over several sectors
thinking they are diversified and more protected, could not be further
from the truth.
In fact, owning specific
sectors can increase one’s risk because sectors, in general, are a
smaller segment of the whole market and thus can rise and fall faster
than the broad index.
This can lead to
lower returns, higher costs, and increase risk substantially.
Diversification is a byproduct of the buy-and-hold method, which puts
investors over the age of 50 at serious risk because of what is called
theSequence of Returns Risk.
Tactical ETF Investing: A Different Approach to Building Wealth
One
alternative investment strategy gaining popularity is tactical
investing. Tactical investing allows investors to grow their capital
without diversification. Instead of spreading investments across
assets, tactical investing allows investors to focus on the assets that
are performing well while avoiding those that are not.
Tactical
investing works by selling assets as they start to top out and
reinvests the money into other assets that are rising in value. This
strategy is the polar opposite of the old buy-and-hold method used by
firms like Fidelity, Schwab, and financial advisors in general.
Tactical investing allows investors to avoid holding falling positions
and instead focus on assets that have the potential for growth.
What
makes tactical investing different from traditional diversification is
that it does not rely on spreading investments across asset classes at
the same time. Instead, it relies on an asset hierarchy and rotates
capital into assets that have the most potential for growth. A strategy
that uses an asset hierarchy isCGS.
The benefits of tactical investing are clear
Tactical
investing allows investors to focus only on the assets that are rising
while avoiding those that aren’t. This strategy can lead to higher
returns and lower costs, as investors are not paying fees and expenses
for assets that are not contributing to their overall investment
strategy.
Additionally, tactical
investing allows investors to take advantage of market volatility.
Instead of riding out market fluctuations, investors can avoid falling
prices altogether and limit their downside risk. Sometactical investing newslettershave strategies that can generate additional gains during market corrections using inverse ETFs.
Top ETF Brands for Tactical Investing
When
it comes to tactical investing, investors have many options to choose
from when selecting an ETF. Some of the top brands that work well for
tactical investing that I use are:
Invesco ETFs like QQQ, UUP, and UDN
State Street ETF SPY
iShares ETF TLT
Proshares PSQ and SH
Overall,
these top ETF brands offer a wide range of choices to meet the specific
needs of investors looking to achieve financial efficiency through
tactical investing.
Concluding Thoughts
While
diversification has long been considered a key strategy for building a
successful investment portfolio, the concept of diworsification
highlights the potential downside of diversifying your portfolio.
Instead, investors canconsider using tactical investingto
grow their capital without diversification by reinvesting their money
into different assets rising in value and avoiding holding positions
that are falling. By carefully selecting the right ETF for various
assets, investors can fast-track their portfolios to reach retirement
sooner and for retirees to live a richer lifestyle.
I hope you found this article useful. If so, please share it with others on Facebook, Twitter, and LinkedIn!
