Chris
Vermeulen discusses the current state of various markets, including the
stock market, and suggests that there may be a bear market on the
horizon.
He also discusses the potential
for a “supercycle” in precious metals, specifically gold and silver,
and suggest that there may be opportunities for investment in these
areas.
Five Key Topics:
1. The stock market is currently in a stage of complacency and may be approaching a bear market.
2. There may be opportunities for investment in precious metals, specifically gold and silver, in the near future.
3.
The market goes through four stages: a “basing” or sideways movement, a
bull market, a period of volatility, and a bear market.
4. Identifying opportunities for investment at different points in the market cycle can provide significant upside potential.
5. There may be a revaluation event in various assets and sectors in the near future.
My
cautious optimize with Bitcoin was warranted, but it does look to be
turning. It is very oversold with one lower indicator, possibly rising
from the -3.95 level. Bulls want it to turn positive to no longer
indicate Bitcoin being oversold.
OEXTrader.com
THE PERFECT STORM FOR INVESTORS TO LOSE BIG IN 2023 IS UPON US, UNLESS…
Reading Time:6minutes
Last week I rang the bell tellinginvestors and traders to wake upand smell the hot coffee because 2023 is going to be a life-changing year, and likely, not for the better.
The 30,000-foot view of where we are in the stock market cycle is shown on my gauge.
Mike’s Investment Story Of Losing Big
Mike
had always been a big believer in the “buy and hold” investment
strategy. He had read all the books and articles and was convinced that
if he just stayed the course, he would come out ahead in the end. So
when the stock market started to tank in 2008, Mike didn’t panic. He
told himself that this was just a temporary blip and that things would
bounce back soon.
But as the weeks
turned into months, it became clear that this was no ordinary market
downturn. Mike’s portfolio was taking a beating, and he was starting to
lose a lot of money. He tried to stay positive and hold on, but the
losses just kept piling up. Finally, he couldn’t take it anymore and
panicked, which led to him selling everything.
When
the dust settled, Mike had lost a significant chunk of his life
savings. He was devastated and couldn’t believe that his beloved
buy-and-hold strategy had failed him so badly. He vowed never to make
the same mistake again and to always be more cautious and proactive
with his investments.
Despite his
painful experience in 2008, Mike couldn’t shake his interest in the
stock market. He spent years studying and learning as much as he could
about investing, determined to make up for his past mistakes. Finally,
in 2020, he felt ready to give it another shot.
With
a newfound sense of caution and well-researched stocks, Mike slowly
began to rebuild his investment portfolio. At first, things seemed to
be going well. The market was strong, and his stocks were rising
sharply.
But in 2022, disaster struck
again. A bear market hit both stocks and bonds, and Mike watched in
horror as his portfolio took another hit, almost as bad as the 2008
financial crisis, because this time, the price of bonds fell with
stocks due to the rising interest rates.
Now,
14 years after his 2008, and the recent 2022 losses, Mike is older and
much closer to retirement. He knows bear markets can take 3-12 years to
recover, so it is critical that he invest differently now to avoid
multi-year drawdowns that would delay his retirement.
Mike
is not alone, and maybe even you are having a similar situation with
investing. In 2021 and again in 2022, investors started to challenge
the status quo buy-and-hold strategy because holding stocks and
bonds did not protect their capital as they were told it should.Download the free mini-booklet on this movement to create a bear-proof retirement account.
Take
a look at investor complaints received in 2020 and 2021. This tells us
the 60/40 portfolio and standard advisor by-and-hold strategy has done
some serious damage to investors accounts, and the reputation of
advisors. This is the same scenario that happened during the 2008 bear
market. The problem I have is that investors are always told to stay
calm and to keep their money in the market, everything will be fine,
and corrections are part of the process, but I say Hell No!
Investors have been manipulated to think losing money during bear markets is normal.Investors have Stockholm Syndromeand
are being tortured for no reason because bear markets can be avoided.
In fact, investors can make substantial returns during falling stock
prices.
Savvy investors and traders know
the markets move through cycles and that price trends can be tracked
and traded using technical analysis signals.
A Different Way To Invest: Technical Trading Signals
Technical
trading signals can help traders make informed decisions and manage
risk by providing clear direction on market trends and potential risks.
By following these signals, traders can hold positions in assets that
are performing well and quickly exit those that are underperforming,
leading to lower volatility in the portfolio. When a signal is
triggered, traders know to take action, whether that means entering or
closing a position, which can help them avoid significant losses and
outperform the market in the long run.
Investment
signals for ETFs and other asset types can provide a systematic,
repeatable approach to investing that helps to reduce emotional stress
and introduce consistency and capital preservation. These signals are
based on rules rather than predictions or emotions, which can provide a
clearer path to predictable outcomes. Many individuals now are usingautotrading investing systemsto
take the guesswork out of things and remove the need to learn how the
markets work, technical analysis, and risk and position management.
How to increase returns and save money with technical trading signals
Technical
trading signals can be a cost-effective way for investors to boost
their returns and save money, especially if they currently use a
financial advisor who charges an AUM fee. These fees, typically around
1% of the assets under management, can add up over time for investors
with large accounts. For example, a $500,000 investment with an advisor
charging a 1% AUM fee would result in annual fees of $5,000.
In contrast,technical trading signalsare
offered with a flat annual subscription, which can be significantly
lower than the AUM fees charged by advisors. Additionally, these
signals can help investors preserve capital and profit in both rising
and falling markets, unlike the high-risk “buy-and-hope” strategy used
by many advisors. Buy-and-hold, which exposes investors to the risk of
significant multi-year drawdowns, may be suitable for younger investors
but may not be appropriate for those over the age of 45.
Concluding Thoughts:
In
summary, technical trading is an effective way for investors to
generate wealth and manage risk. By using technical analysis to
identify rising assets and implementing position and risk management
strategies, investors can achieve above-average returns while
minimizing risk.
I have developed a
proprietary ETF portfolio that has been refined over the past 25 years,
which I share with investors who want to grow their accounts with less
stress and volatility. This strategy, known as the Consistent Growth
Strategy, can also be autotraded, allowing investors to set up and fund
their account and then let the system handle the rest. It’s like having
an advisor actively manage your account and protect you from falling
prices, but at a lower cost.
My team and I are available to help investors safely navigate both bull and bear markets using theETF Consistent Growth Strategy.If you have any questions or would like to learn more, please don’t hesitate to reach out.
If you enjoyed this article, please share it with others, and be sure to join my free newsletter and have more articles like this delivered to your inbox.
170,
might be the breakout number for gold bulls with the below GLD astro
chart. If we see the lower indicator moving above zero in the coming
months, that may confirm a bull run is under way.
OEXTrader.com
INVESTORS/TRADERS: WAKE UP AND SMELL THE HOT COFFEE
Reading Time:7minutes
Another year has gone by, and you are either richer or poorer, happier or sadder, living life or worried about your future.
2022
ended up being an alright year for individuals who focused on
controlling risk and positions. Investors and I are up over 5% in 2022
using a passive consistent growth strategy. It may not sound like much,
but considering the average buy-and-hope portfolio with a 60/40
stock/bond balance which is down -19%, it’s a dramatic difference.
Buy-and-Hope Strategy vs. Consistent Growth Strategy
This
table shows how much the old buy-and-hold strategy costs investors.
It’s very volatile and unpredictable and will cause many sleepless
nights and put a strain on relationships with your spouse at times.
It
will delay retirement and can also destroy it, depending on your age.
Anyone over the age of 50 should not be using the buy and hold if they
want to protect and preserve their wealth and lifestyle. I won’t go
into howinvestors have Stockholm Syndromebecause
of how the financial system created the Buy-And-Hold strategy and more
or less created all the tools and training for advisors to carry it out
in order to keep the stock market rising over the long run. It’s not so
much the advisors but rather the financial system as a whole.
Just
look at the annual costs, returns, and volatility of the two different
investment methods to see how much you may be paying for
underperformance and the use of a high-risk strategy.
In
the past couple of months, I have temporarily turned my focus in my
weekly articles to be more about You, the trader, and the investor. In
my last post, I shared thebrutal truth about how individuals are the root cause for losses, and it’s because they don’t know who they are on a deeper level or where their strengths and weaknesses are fortheir given personality.
Give Me More Trades, And I Will Show You More Losses
This
week I chatted with an individual who said he needed more trades to
make money and that holding cash at times is not how money is made. He
went on to say that paying for investment signals that held cash does
not justify the cost of the subscription and that he must trade more to
make money.
If you have been
reading my work for a while, then you likely can hear me moaning or see
me squirming in my seat with my eyes rolling because people with a
mindset like that are destined to fail.
Unfortunately,
most traders and investors think they need to trade frequently to make
money because they believe that the more trades they make, the more
opportunities they will have to profit. This belief can be fueled by
the market constantly moving and that traders must always be in the
market to capture these movements.
However,
this is only sometimes true. Frequent trading can lead to decreased
profits or even losses, especially if the trader does not have a clear
strategy or plan, which most do not. While trading frequently can lead
to increased transaction costs, the real issue is that it leads to
emotional trading, where traders make decisions based on their emotions
rather than a rational analysis of the market, leading to poor
decision-making and further losses.
The
chart below shows my Panic Buying indicator. This red line located at
the top of the chart is the FOMO level. When it is above the blue
horizontal line, the average trader and investor are buying in fear of
missing out on a further move.
What
happens is the stock market starts a rally, and everyone quickly jumps
on board and chases the price higher. This is when the red indicator
line spikes and holds above the thin blue horizontal line. I won’t go
into the details, but we can see when traders are doing the same thing,
which is a contrarian signal as we know that the price is likely about
to reverse and fall.
I also have the
other side to this opportunity, which is my Green FOMO indicator, which
tells us when everyone is selling, and a reversal and rally is about to
start.
My point with this chart and
indicator is to show you how the average trader is driven by their
emotions. In a downtrend like 2022, when they buy, they are buying at a
high. They are like a school of fish or a flock of birds, all doing the
same thing simultaneously, and it’s obvious and predictable.
The Reality And What It Means For You
In reality, it is often better for traders tofocus on developing a solid trading strategy and planand
then implementing it with self-discipline and patience rather than
trying to trade frequently in the hopes of making quick profits.
This
way of trading involves taking the time to thoroughly analyze the
market, identifying good entry and exit points, and setting clear risk
management guidelines to help protect against potential losses. To the
active emotional trader without a written detailed strategy, this will
naturally feel slow and boring to implement. It may even feel a little
more like work vs. the gambling rush you may be secretly addicted to.
But, by taking a more measured and disciplined approach to trading, you
can increase your chances of success and profitability over the long
term.
As I always tell traders, if
something feels slow or boring, it means you have a system in place,
things figured out, and that you are in control.
If You Manage Losses, The Profits Will Come
Sorry You Are Screwed
It
does not matter if you are a trader or an investor. If you are not a
long-term thinker and planner, willing to sacrifice your short-term
emotional trades with no regard for position sizing or risk management,
and you lack the self-discipline to wait for high probability trades,
take profits, and exit trades not working out – sorry, but you are
screwed, and no one can help you but yourself.
Until
you decide to treat trading and investing as a business vs. a lottery
ticket, you will continue to suffer massive multi-year drawdowns and
take 30-75% losses because you love a stock or asset, which by the way,
does not love you back. That stock or asset does not care if it ruins
your retirement plans.I show you why only price pays here, not our emotions, news, or opinions of others.
A
great example is Tesla. It’s down over 70% and is the worst-performing
stock this year in the S&P 500. Is it a great company? I think so.
Is it going to continue to grow and expand? I think so. Do I want to
own shares? I do, but why would we hold onto an asset went it’s
falling? We know we can always buy it back later at a better price, or
worse case, we buy it back at a higher price. But it’s not like it’s a
one-time opportunity to buy the stock. The good news is that we can use
technical analysis to know when an asset trend has reversed and exit
positions early to lock in gains.Technical analysis is how we generate above-average returns. Just in case you are wondering, my analysis has it falling to $65-69 per share in 2023.
FromNow – 2023 Is Going To Be Life Changing
Every
week I remind the investors I work with that now is not the time to
expect to make huge money. Instead, it is about capital preservation.
Focus on not losing; growth will naturally come in due time.
My
team and I created a proprietary ETF portfolio for investors who want
to avoid substantial market swings and reliably grow their accounts
with less stress and more enjoyment. And believe it or not, this CGS
strategy can also beAutoTraded,
meaning that once your AutoTrading account is set up and funded, your
money will be invested without you having to do anything else.
If you have any questions, my team and I are here to help you safely navigate both bull markets and bear markets with our Consistent Growth Strategy.
If you enjoyed this article, please share it with others, and be sure to join my free newsletter and have more articles like this delivered to your inbox.
Possible support around 1609, if we keep dropping in to 2023. 1769, may be the high and of a possible OEX range.
OEXTrader.com
WHAT TYPE OF TRADER OR INVESTOR ARE YOU?
Reading Time:4minutes
Trading
and investing are much more complex and challenging than most people
think. While countless books have been written about how to trade and
invest, most skip over what I consider to be the foundation and most
important area – You!
The Brutal Truth
The
financial markets are driven by fear and greed. Most individuals find
this costly as they get sucked into large news-driven moves in the
market that often quickly reverse direction. Or they fall in love with
a stock or commodity and decide they can’t sell even when it’s pulling
their entire account balance down, causing serious financial harm.
The brutal truth is that if you don’t understand what type of personality you have and how to control your emotions, then you are doomed before you even get started.
Also,
if you don’t understand where you stand within your trading skill set,
and your available time to learn and focus on the markets is limited,
your results are also doomed.
It does
not matter how well you can read the charts using technical analysis if
you don’t fully understand who you are at an emotional level, and then
use strategies that fit within your capabilities and available time.
Still, technical analysis is critical for your success.
Trade In A Way That Makes It Simple and Fun
I
prefer swing and position trading to get the most out of my time and
the market and live the lifestyle I want. Keep in mind am not a
full-time trader; I am a dad and adventurer who semi-retired at the age
of 27, so I could pursue all kinds of fun things. I do not want to
watch the charts all day, as it’s a huge waste of time for my
personality, trading/investing style, and ultimate goals.
Being
married to the charts all day is only for day traders and those who
want to become full-time traders aiming to trade a lot. But as most of
these people figure out eventually, full-time trading is a JOB, is less
fun than they initially thought, is more stressful than anticipated,
and is super time-consuming.
My main
focus is on slow trading styles, with the bulk of my trading and
investing accounts using a risk-controlled growth strategy. There are
times when the market simply does not generate any low-risk
opportunities, and I have gone a few months without placing any trades,
and I’m fine with that. Generally, those are times when stocks and/or
bonds are falling, and cash is the best investment for that market
condition.
The Good News
The
good news is that I have mastered these shorter time frame investing
strategies (Swing/Position trading). These opportunities pop up on the
chart every few weeks, giving me two huge benefits. The main one is
that it satisfies my urge to trade. And why is this important?
Simple.
Traders are naturally addicted to being active and feel they need to
place trades often. If your primary trading strategy is not giving you
any trades, you can become stir-crazy. You eventually search for
something…anything…to trade just to satisfy this urge. This leads to
bad trades and can actually create a bad habit of straying from what
you know works to a more random discretionary trading path that you do
not/should not go down.
The other major
benefit of trading within your personality type, skills, and available
time is that you enjoy the process and feel you are in control of your
future.
It takes time, skill, and
self-discipline to refine a strategy, so it’s repeatable and not rooted
in emotion. No matter what type of strategy you choose to trade, one of
the most critical skills that separate highly successful traders from
the rest of the pack is the ability to watch the action in the market
and execute trades based on what the market dictates vs. what you want
or feel like trading. That’s a very different perspective than simply
executing trades based on what your internal emotion dictates.
When
you understand market dynamics, you can translate knowledge into
profits. A well-thought-out, rule-based system prevents you from making
impulsive decisions. When you are prepared for every scenario, you
won’t be tempted to react emotionally. You’ll take action based on
proven technical analysis and your rules instead.
Technical Analysis Makes You Better
Technical
analysis isn’t just a method to analyze market action; it is a
foundation from which to work. It’s about seeing cyclical patterns and
understanding that there is an order to them amidst what might
otherwise seem confusing and chaotic. Once you can understand the motivations of market patterns and anticipate what might occur next,
you’ll see that even though market conditions can change, there’s still
a cyclical movement of capital through the markets.
The market is not random.
There are consistent psychological motivations of humans at play, and
there are consistent patterns in the market structure which I show and
teach weekly to fellow traders and investors who want to improve their
trading and protect their wealth. And to take things one step further,
the exact strategy I trade with my retirement capital can be
automatically traded for followers in their own accounts. This keeps
things simple for those who are busy and don’t have the time or desire
to learn how to trade the markets themselves.
Technical
analysis will help you analyze the past and allow you to revest your
capital into new assets rising in value so that your account
consistently reaches a new high-water mark every couple of months –
just like our Consistent Growth Strategy does for our followers.
WHY GOLD AND OIL FALLING IN VALUE ARE A BAD SIGN FOR 2023
Reading Time:6minutes
In
the past two weeks, stocks have struggled to break through resistance
and extend the holiday rally. I wrote about it in the post Stock Indexes Rejected At Resistance Signal Another Correction. But
what is a more bearish sign is seeing commodity prices starting to
fall. There are a couple of reasons this is a warning signal for
traders and investors, and I will show you exactly what they are.
Reason #1: Equity and Economic Cycles Signal Market Top and Recession
In
the diagram below, you will see two cycles. The blue/green cycle is the
stock market. Stocks typically lead the economy as savvy investors can
see when businesses, in general, are expanding or contracting, thus
telling them when they should buy more shares or start selling.
As
you can see, energy and precious metals are the last assets to do well
before the stock market tops. Both topped many months ago. Having said
that, precious metals have had a decent rally in the past couple of
months, but that rally should not to be trusted.
In
this post, I will talk about energy and precious metals. In a future
post, I will cover the next two sectors, which have been doing
exceptionally well this year and are holding up the best – Health Care
and Utilities.
Assets Peak In A Predictable Order
While
falling commodity prices signal potential easing in inflation, it’s not
necessarily a good sign. That’s because assets peak in a predictable
order: bonds, stocks, and then commodities.
Without
turning this post into a rant, I should mention that what I share here
is investing 101. It’s been my mission with my trading and investing
newsletters since 2001 to help as many individual investors as possible
avoid market corrections and bear markets and also profit from volatile
times when most others are losing money.
So,
when I speak to an investor on the phone who is 40+, suffering from the
old buy-and-hope investing strategy with big drawdowns, it makes me
worry. If you have money with an advisor who has just plopped your
money into stocks and bonds using the buy-and-hold strategy, please
know that 2022 – 2025 could be VERY difficult times. I believe that
what is about to happen next will delay or destroy your retirement if
you don’t have a plan to preserve capital.
While
almost everyone suffers from the passive, no-brainer buy-and-hold
strategy, which a 10-year-old could do for you, it is not the way you
should have your money managed. You are being tortured but don’t
realize it because you think it’s the norm, and that’s because you
likely haveInvestment Stockholm Syndrome.
Crude Oil Prices Continue To Plunge
Crude
Oil has fallen to the lowest level in over a year, suffering a weekly
loss of -10%. Oil has given back all of its gains for the year and is
taking a toll on energy sector stocks.
As
investors see businesses slowing and a recession in the near future,
the price of oil begins to fall. A recession often means less
traveling, slower sales, a decline in shipping, and less product
demand. Oil falling means savvy investors see tough times ahead.
Gold Miners Weekly Chart
Gold
stocks have been out of favor for a long time despite the recent rally,
which has sparked a lot of interest recently. Subscribers and I owned
GDX with our Best Asset Now Strategy and
sold it for a quick 7% gain this week. We sold just before the price
topped, as the technical analysis charts and indicators told us to get
out.
The most important thing to
understand about investing is that the only way we make money is when
the price of an asset moves in our favor. No news or fundamental data
will protect you from falling prices. Moving to cash and revesting
capital into assets that are rising in value is the best way to secure
consistent growth. I talk about this in more detail in the post Only Price Pays.
Reason #2: Commodity Index ETF – Weekly Chart
Commodities
tend to rally in the late stages of a stock bull market. This is
because stock evaluations become high and are no longer a fair value.
Thus, investors turn to alternative assets, and physical commodities
happen to be the asset of choice.
As you
can see in the chart below, commodities topped in June 2022, five
months after the stock market topped in January 2022. The DBC commodity
index is clearly in a Stage 3 market phase and on the verge of breaking
down into a Stage 4 decline (bear market).
Concluding Thoughts:
In
short, investors no longer want to own stocks, and they don’t want
commodities. Going forward, investors will start liquidating positions,
possibly for many months, in all asset classes until a new level of
equilibrium has been found. This is a perilous time to own stocks and
commodities if your capital is being invested with the buy-and-hope
strategy. Should this be the case, I feel for you because if you are
50+, your retirement is about to be threatened at the worst possible
time in your life.
2022 has been an excellent year for those investing with the Consistent Growth Strategy alongside me as we actively use my ETF asset hierarchy allocation.
This super-conservative strategy, with a max drawdown of 5.96% since
2007, packs a powerful punch with an average compounded return of
15.62% yearly. This year we keep hitting new high-water marks
consistently: May, Aug, Sept, and again this week.
If
you are concerned about your investment account and your retirement,
then you should know there is a DIFFERENT way to invest. It goes
against everything you likely have been taught/brainwashed to think
when it comes to how your money should be invested and protected. My
ETF strategy is simple to follow with 4-12 trades per year, and if
that’s still too much for you, then you can have it autotraded in your
brokerage account at no additional cost, as it’s part of my investment
newsletter service.
As always, I believe
in baby steps, so if you have your money invested with an advisor, you
can simply have some of your capital autotraded outside of your advisor
account. What you will save in advisor fees will cover the cost of the
newsletter, making it a NO-COST investment upgrade. Imagine – you can
actually test the waters before wanting to have more of your money
actively protected for you.
