{"id":148734,"date":"2019-05-31T06:53:50","date_gmt":"2019-05-31T10:53:50","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=148734"},"modified":"2019-05-31T06:53:50","modified_gmt":"2019-05-31T10:53:50","slug":"adaptive-price-modeling-suggests-big-rotation-in-us-dow-stocks","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/05\/adaptive-price-modeling-suggests-big-rotation-in-us-dow-stocks\/","title":{"rendered":"Adaptive Price Modeling Suggests Big Rotation In US Dow Stocks"},"content":{"rendered":"
May 31, 2019<\/div>
\r\n<\/div><\/div>

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

I have been pouring over the longer term charts as we\u2019ve started to see Oil and Gold move in directions that would indicate increased fear throughout the global markets while a contraction in economic activity\/oil prices appears to be setting up for another big move.\u00a0 The objective is to attempt to identify longer-term volatility expectations and price targets.\u00a0 To accomplish this task, we use our Adaptive Fibonacci predictive modeling utility on 3 Week charts because they provide a unique look at price activity and are a bit more reactive to shorter-term price activity than Monthly price bars.<\/p>\n

We found some very interesting components by reviewing these charts of the ES, NQ, YM, and CL.\u00a0 We believe we are setting up a 2~4+ week sideways price rotation in the US stock market as price attempts to consolidate within this range before a broader breakout\/breakdown move could happen.\u00a0 Just as we predicted many months ago, the July 2019 price peak we suggested could form appears to be setting up with a sideways pennant\/flag formation as investors digest the economic and global trade war news data.<\/p>\n

Eventually, the price will make a move in an attempt to break this sideways price channel and our predictive modeling solutions can help us to understand how these price setups will playing out.\u00a0 Let\u2019s get into the charts and research.<\/p>\n

As we start to pull apart the data from these charts, we urge you to pay attention to two things \u2013 the range of the current Bullish & Bearish Fibonacci Price Trigger levels and current price rotations of price peaks and troughs over the past 40 to 60 bars.\u00a0 It is very important to understand and attempt to use the \u201cnew price high\u201d and \u201cnew price low\u201d Fibonacci price theory that we keep talking about in our articles.<\/p>\n

This first chart is the ES 3-Week chart highlighting the range between the Fibonacci Bullish and Bearish Price Trigger Levels (highlighted in light-CYAN).\u00a0 It is important to understand why the current bearish price trigger level is so far below current price levels.\u00a0 The Adaptive Fibonacci modeling system adjusts trigger levels based on recent price activity and price volatility to attempt to identify when the price is congesting in a sideways price trend or trending upward or downward.\u00a0 When price congests in a sideways form, the Adaptive Fibonacci modeling tool identifies this and determines that price would need to move to new levels in order to qualify for a new bullish or bearish price trigger.\u00a0 In this case, it is suggesting that price would need to fall below $2014 before this 3-Week chart would qualify the move as a \u201cnew bearish trend\u201d.<\/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

That is a big move from current levels.\u00a0 It totals more than -750 points \u2013 a -27.5% price decline.<\/p>\n

Currently, as long as the ES price stays above the $2633 level, the Fibonacci predictive modeling system is still suggesting the Bullish trend is intact and should continue.<\/p>\n

\"\"<\/p>\n

 <\/p>\n

This NQ 3-Week chart is setup in a similar manner to the ES chart. Although the Fibonacci volatility range on the NQ chart is much more narrow than the ES chart, the Fibonacci modeling system is still suggesting that the current trend is still Bullish and the key levels for the triggers are $6792 for the Bearish Trigger level and $6556 for the Bullish Trigger level.<\/p>\n

Because of the narrow volatility range and because the Bearish trigger level is above the Bullish trigger level, we believe a price rotation where the price stays above $6800 is very likely over the next few weeks.\u00a0 Obviously, should price break below the Bearish Trigger level, then we would begin to become concerned that a broader downside trend is being established and start to look at the Fibonacci downside price targets (near $5815 & $3900).\u00a0 Until that happens, expect sideways price rotation with a 250 to 500 point range on average (about 2x the Fibonacci volatility range).<\/p>\n

\"\"<\/p>\n

 <\/p>\n

The YM is really the key to understanding just how the markets are going to play out over the next few weeks and months.\u00a0 The extremely large Fibonacci volatility range on the YM chart highlights the potential for the wild sideways price rotation that we are expecting over the next few weeks and months.\u00a0 Remember, our analysis from many months ago suggests a price peak will likely form in July\/August 2019 and prompt a broader downside price move after this peak completes.\u00a0 Our expectation that a current sideways price channel is setting up leads us to believe the apex of this sideways price channel may result in a very brief price rally (pushing prices back towards recent highs) before rolling over and starting a new downside price move to coincide with our July\/Aug 2019 predictions.<\/p>\n

One way or another, it appears the DOW\/YM will be leading the way in terms of price volatility and rotation.\u00a0 The wide range between the Bullish and Bearish Fibonacci Price Trigger Levels is suggesting that price volatility is increasing and that the YM would have to move to levels above $29,750 or to levels below $18,875 before establishing any new price trends.\u00a0 The past Fibonacci trigger levels help us to understand key price levels as this future move takes place.<\/p>\n

Past Fibonacci Trigger Price levels are $26,025 for a Bearish Price Trigger level and $24,770 for a Bullish Price Trigger Level.\u00a0 This means if the price is below $26,025 \u2013 we should expect a bearish price trend to continue and if the price is above $24,770 \u2013 we should expect a bullish price trend to continue.\u00a0 Yet, price is current BETWEEN both of these levels, so what should we expect right now?\u00a0 When the price is in between these levels, like now, we typically look for the last price rotation (peak or valley) and for the last level that was crossed (in this case the $26,025 Bearish level) and would conclude:<\/p>\n

The trend is currently Bearish and the $26,025 level is key to maintaining this bearish price direction.\u00a0 Should price move back above this level and close above this Bearish Price Trigger Level, then we would consider the trend \u201cmoderately bullish\u201d while we wait for a new Price Trigger Level Breach to setup.<\/p>\n

\"\"<\/p>\n

 <\/p>\n

Lastly, Crude Oil.\u00a0 We\u2019ve been writing to all of our followers that we felt Oil was setting up for a price rotation many weeks ago.\u00a0 We warned that the $65 price level may be the end of the move and that the $55 to $50 levels are the likely downside targets.\u00a0 The volatility range is somewhat narrow and the last Trigger Level that was breached was the Bearish Trigger Level near $68.75. Therefore, we believe the recent downside price move, below the $60 Bullish Trigger level, results in a new Bearish price trend with immediate targets near or below $50.\u00a0 Ultimately, the $42.40 level may be the longer term downside price target \u2013 which would coincide with a broader commodities slowdown and global economic activity contraction.<\/p>\n

\"\"<\/p>\n

 <\/p>\n

So here is what you need to know to go into this weekend and for the next 4+ weeks.<\/p>\n

Expect the US stock market to trade in a moderately volatile sideways price channel for the next 4+ weeks.<\/p>\n

Expect the end of this price channel to result in a \u201cfalse rally\u201d move that may push prices towards recent highs before faltering and rotating back to the downside.<\/p>\n

Expect this END of the sideways price channel to happen sometime near mid-July or early August 2019.<\/p>\n

Expect Gold and Oil to continue to react as \u201cfear measures\u201d over the next few weeks\/months as global traders reposition their assets throughout this rotation.<\/p>\n

Expect a bigger price move near late July through September~October 2019 as this volatility move really begins to take root with equities.<\/p>\n

Follow our research and learn how we can help you stay well ahead of these price moves.\u00a0 We\u2019ve just highlighted what is likely to happen over the next 30 to 60 days in this research post.\u00a0 Want to know how we are going to trade these moves?\u00a0 Join our other members to see how we create success and keep our members ahead of these big moves. Also, if you wanted me to ship you free silver rounds with a subscription<\/strong><\/em> to this Wealth Trading Newsletter<\/a><\/strong> you better join today as this offer expires June 1st<\/strong><\/em>.<\/p>\n

Chris Vermeulen
\nTheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

 <\/p>\n

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

By TheTechnicalTraders.com I have been pouring over the longer term charts as we\u2019ve started to see Oil and Gold move in directions that would indicate increased fear throughout the global markets while a contraction in economic activity\/oil prices appears to be setting up for another big move.\u00a0 The objective is to attempt to identify longer-term […]<\/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-148734","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/148734","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=148734"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/148734\/revisions"}],"predecessor-version":[{"id":148735,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/148734\/revisions\/148735"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=148734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=148734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=148734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}