{"id":131556,"date":"2018-08-07T14:37:39","date_gmt":"2018-08-07T18:37:39","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=131556"},"modified":"2018-08-07T07:39:25","modified_gmt":"2018-08-07T11:39:25","slug":"part-ii-us-markets-higher-until-november-2018","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/08\/part-ii-us-markets-higher-until-november-2018\/","title":{"rendered":"PART II \u2013 US Markets Higher Until November 2018"},"content":{"rendered":"
August 7, 2018<\/div>
\r\n<\/div><\/div>

By TheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

Now, we are ready to share some new research that will help all of us understand the current and future market conditions given the ratios of the capital markets to GDP as\u00a0represented in our previous article\u00a0Part I<\/a>. \u00a0The research team at www.TheTechnicalTraders.com believe we have identified a means of structurally understanding the US capital markets in relation to risks or reversal and crisis contagion.\u00a0 As the Buffet Indicator is now warning that the US capital market may be nearing a critical price top, we can now attempt to put this data into perspective in relation to capital flows and capabilities.\u00a0 Yes, in terms of historical price appreciation, we are now at or near levels that have historically been associated market tops and price collapses.\u00a0 Let\u2019s look at how the Buffet Indicator has reacted at times using our new Custom Market Cap Volatility Index.<\/p>\n

\"\"<\/p>\n

 <\/p>\n

This Daily Custom Market Cap Volatility Index shows data from 2016 until now.\u00a0 It clearly shows the deeper price rotation near the elections in 2016 and the deep price rotation in February 2018.\u00a0 Let\u2019s compare these levels to the Buffet Indicator reactions.\u00a0 In 2016, the Buffet Indicator fell nearly 15% as the US stock market indexes fell 13.5%.\u00a0 In February 2018, the Buffet Indicator fell nearly 8.5% as the US stock market fell 11.88%.\u00a0 Our Custom Market Cap Volatility index operates as a range of price rotation that assists us in determining if and when the price is outside normal price ranges.\u00a0 We are attempting to map price appreciation in relation to volatility in a historical form.\u00a0 When price retraces or contracts, volatility spikes higher.\u00a0 With this process of volatility increasing and price decreasing, the increased VIX levels will show up as very deep Custom Market Cap Volatility price corrections.\u00a0 The VIX will increase much faster than price will collapse, thus any price collapse will likely stay within these ranges, or fall outside these ranges if the price collapse is more extended.<\/p>\n

Extended price collapses will result in much higher VIX levels while prices continue to decrease.\u00a0 If the price collapse is very aggressive, the increase in VIX will shoot higher and our Custom Market Cap Volatility Index will crash to very low levels.\u00a0 If the price collapse is an orderly price decline, then the VIX levels will increase as price decreases more gradually and the Custom Market Cap Index will likely stay within moderate ranges.\u00a0 At least we hope this works as we are suggesting.\u00a0 Let\u2019s take a look a longer-term data.<\/p>\n

\"\"<\/p>\n

 <\/p>\n

This Weekly Custom Market Cap Volatility Index shows the same date range as the previous Daily chart.\u00a0 We should be able to see the Blue channel levels that originate much earlier as normal price channel ranges.\u00a0 We have added a Std. Deviation channel to this chart originating from the 2010 lows that show the range as associated by the deviation ranges.<\/p>\n

This data tells us that US stock market prices have recently rallied from near the middle of these historical channels and still has quite a bit of room to the upside.\u00a0 This would indicate to us that the US stock market is not overly priced and that capital is still working into the US stock market in ways that support further price appreciation.\u00a0 Once price reaches above the Std. Deviation channel and above our Blue price channel levels, then we would start to become concerned that prices may retrace as they did in February 2018.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Take a look at the rally from 2016 until now.\u00a0 Notice how the lows near 2016 represented a relatively depressed price channel range with our Custom Market Cap Volatility Index. In other words, prices were hovering near the lower channels with no real signs of risk as prices did not collapse below these levels.\u00a0 One correlation we can make with the Buffet Indicator that may become evident in our Custom Market Cap Volatility Index is that as US Bond rates increase, capital is usually moving away from the stock market and into Treasuries.\u00a0 When we consider the past actions of the US Fed and the correlations of the Buffet Indicator to these central bank actions \u2013 we might find a direct correlation.<\/p>\n

Yet we believe our Custom Market Cap Volatility Index is valuable for a number of reasons; first, we can use this index as a measure of price rotation and standard deviation low price identification. This will allow us to determine when prices are poised to form\u00a0a bottom setup and when an opportunity exists for upside price acceleration.\u00a0 Second, we can identify when prices are nearing the upper channel as an early warning that prices may be attempting to hammer out a longer-term top formation \u2013 allowing us to reduce risk and scale back our positions.\u00a0 Lastly, we can look for cycles that may help us determine key dates for price rotation.<\/p>\n

\"\"<\/p>\n

This cycle chart highlights the deeper low price rotations in our Custom Market Cap Volatility Index.\u00a0 These low points are when the US stock market has seen increases in volatility and moderately deep or deep price corrections.\u00a0 Notice how the early 2018 price collapse is clearly shown as a very deep price rotation in our Custom Market Cap Volatility Index.\u00a0 Notice how the 2016 and 2017 deeper price rotation on the Custom Market Cap Volatility Index correlate with price rotation in the US major indexes.\u00a0 Also, pay attention to the price appreciation that took place after these deeper price corrections.<\/p>\n

These cycles suggest that the US stock market should continue to push higher for at least the next 90+ days till near November 2018.\u00a0 Near this date, there is a relatively strong likelihood that some type of deeper price correction will hit the US markets \u2013 possibly a bit sooner or after this date.\u00a0 The cycle frequency and accuracy of these bottoms suggest that the price of the US stock market will likely push higher over the next 30+ days \u2013 then possibly stall while attempting to form a potential top.\u00a0 It is likely that this top formation or horizontal price range will become extended consolidation before any deeper price correction begins.\u00a0 In the meantime, we believe the US stock market will continue to push higher as our Custom Market Cap Volatility Index shows.<\/p>\n

Our suggestion at this point is that the Buffet Indicator is failing to correlate the global capital pool that exists currently and is also failing to adequately reflect the capital migration that is currently taking place throughout the globe.\u00a0 We believe the US stock market could continue much higher at this point, depending on how the global markets react to this shift in capital and the longer term debt issues that are playing out.\u00a0 We certainly don\u2019t want to mislead anyone \u2013 so we are alerting you that November or December of 2018 appears to be a time where prices may rotate a bit more violently to the downside.\u00a0 This may be correlated to some type of global crisis event or it could be an extended capital shift away from the US stock market where capital flees to new opportunities in other global markets.\u00a0 All we know right now is that the US stock market is still on a path to move higher and we still have quite a bit of room for market cap growth over the next 3+ months.<\/p>\n

If you want to know how our other proprietary price modeling systems and indicators help us keep our valued members and subscribers informed of future market moves, then visit www.TheTechnicalTraders.com<\/u> to learn how we can help you find and execute better trading decisions with our specialized research, daily video updates, detailed trading signals and more.\u00a0 Don\u2019t let the other news fool you with generic content and comments \u2013 true researchers pull from resources or create new resources to give them a much clearer understanding of the market dynamics ahead.\u00a0 Get ready for further upside prices and watch for an end of year price rotation that could be dramatic.<\/p>\n

53 years experience in researching and trading makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and 3 Hour Trading Video Course are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.<\/p>\n

By TheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

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

By TheTechnicalTraders.com Now, we are ready to share some new research that will help all of us understand the current and future market conditions given the ratios of the capital markets to GDP as\u00a0represented in our previous article\u00a0Part I. \u00a0The research team at www.TheTechnicalTraders.com believe we have identified a means of structurally understanding the US […]<\/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-131556","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/131556","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=131556"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/131556\/revisions"}],"predecessor-version":[{"id":131557,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/131556\/revisions\/131557"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=131556"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=131556"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=131556"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}