{"id":119632,"date":"2018-01-15T10:01:32","date_gmt":"2018-01-15T15:01:32","guid":{"rendered":"http:\/\/countingpips.com\/?p=119632"},"modified":"2018-06-01T15:46:43","modified_gmt":"2018-06-01T15:46:43","slug":"how-to-know-if-this-rally-will-continue-to-two-more-months","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/01\/how-to-know-if-this-rally-will-continue-to-two-more-months\/","title":{"rendered":"How to Know if this Rally will continue to two more months?"},"content":{"rendered":"
January 15, 2018<\/div>
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By\u00a0Chris Vermeulen –\u00a0www.TheTechnicalTraders.com<\/a><\/strong><\/p>\n

Our research has been \u201cspot on\u201d with regards to the markets for the first few weeks of 2018.\u00a0 We issued our\u00a0first trade on Jan 2nd<\/sup><\/a>, plus two very detailed research reports near the end of\u00a02017<\/a>\u00a0and early\u00a02018<\/a>.\u00a0 We urge you to review these research posts as they tell you exactly what to expect for the first Quarter in 2018.<\/p>\n

Continuing this research, we have focused our current effort on the Transportation Index, the US Majors, and the Metals Markets.\u00a0 The Transportation Index has seen an extensive rally (+19.85%) originating near November 2017.\u00a0 This incredible upside move correlates with renewed US Tax policies and Economic increases that are sure to drive the US Equity market higher throughout 2018.<\/p>\n

In theory, the Transportation Index is a measure of economic activity as related to the transportation of goods from port to distribution centers and from distribution centers to retail centers.\u00a0 The recent jump in the Transportation Index foretells of strong economic activity within the US for at least the next 3 months.<\/p>\n

One could, and likely should watch the Transportation Index for any signs of weakness or contraction which would indicate an economic slowdown about to unfold.\u00a0 In order to better understand how the Transportation Index precedes the US Equity markets by 2~5 months, let\u2019s compare the current price activity to that of 2007~08.<\/p>\n

This first chart is the current Transportation Index and shows how strong the US economic recovery is in relation to the previous year (2017).\u00a0 As the US economy has continued to strengthen and open up new opportunities, the Transportation Index has related this strength by increasing by near +20% in only a few short months.\u00a0 This shows us that we should continue to expect a moderate to strong bullish bias for at least the first quarter of 2018 \u2013 unless something dramatic changes in relation to economic opportunities.<\/p>

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CURRENT TRANSPORTATION INDEX CHART<\/strong><\/h2>\n

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In comparison, this chart (below) is the Transportation Index in 2007~08 which reacted quite differently.\u00a0 The economic environment was vastly different at this time.\u00a0 The US Fed had raised rates consecutively over a two year period leading up to a massive debt\/credit crisis.\u00a0 At the same time, the US had a Presidential Election cycle that saw massive uncertainty with regards to regulation, policies and economic opportunities.\u00a0 Delinquencies as related to debt had already started to climb and the markets reacted to the economic alarms ringing from all corners of the globe.\u00a0 The Transportation Index formed a classic \u201crollover top\u201d formation in late 2007 and early 2008 well before the global markets really began to tank.<\/p>\n

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2007~08 TRANSPORTATION INDEX CHART<\/strong><\/h2>\n

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Our analysis points to a very strong first quarter of 2018 within the US and for US Equities.\u00a0 We believe the economic indicators will continue to perform well and, at least for the next 3 months, will continue to drive strong equity growth.\u00a0 We do expect some volatility near the end of the first Quarter as well as continued 2~5% price volatility\/rotation at times.\u00a0 There will be levels of contraction in the markets that are natural and healthy for this rally.\u00a0 So, be prepared for some rotation that could be deeper than what we have seen over the last 6 months.<\/p>\n

In conclusion, equities are this point are overpriced, and overbought based on the short-term analysis. We should be entering slightly weaker time for large-cap stocks over the next couple weeks before it goes much higher. Because we are still in a full out bull market, Dips Should Be Bought and we will notify members of a new trade once we get another\u00a0one of these setups<\/a>.<\/p>\n

In our next post, we are going to talk about two opportunities in precious metals forming for next week!<\/p>\n

Read the analysis we presented before the end of 2017 regarding our predictive modeling systems and how we target our research to helping our members.\u00a0 If you believe our analysis is accurate and timely, then we urge you to subscribe to\u00a0www.TheTechnicalTraders.com<\/a>\u00a0to support our work and to benefit from our signals.\u00a0 We believe 2018 \u2013 2020 will be the years that strategic trades will outperform all other markets.\u00a0 Join us in our efforts to find and execute the best trading opportunities and profit from these fantastic setups.<\/p>\n

Chris Vermeulen –\u00a0www.TheTechnicalTraders.com<\/a>
\nTechnical Traders Ltd.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By\u00a0Chris Vermeulen –\u00a0www.TheTechnicalTraders.com Our research has been \u201cspot on\u201d with regards to the markets for the first few weeks of 2018.\u00a0 We issued our\u00a0first trade on Jan 2nd, plus two very detailed research reports near the end of\u00a02017\u00a0and early\u00a02018.\u00a0 We urge you to review these research posts as they tell you exactly what to expect […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-119632","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/119632","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=119632"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/119632\/revisions"}],"predecessor-version":[{"id":119633,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/119632\/revisions\/119633"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=119632"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=119632"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=119632"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}