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Chris Vermeulen
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Chris Vermeulen the founder of AlgoTrades.net Algorithmic Trading Systems. This automated investing system is designed for individual investors and traders. He is also the editor of the TheGoldAndOilGuy newsletter which is designed for gold market traders providing quality ETF Trade Alerts,... More
My company:
AlgoTrades Algorithmic Trading Systems
My blog:
TheGoldAndOilGuy - Gold Market Traders
My book:
Technical Trading Mastery - 7 Steps To Win With Logic
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  • Some Good News And Not So Good News…

    Since we started sharing the new and improved algorithmic trading systems (S10 and D30) a few weeks ago we have received a lot of great feedback and demand.

    We do have more good and some not so good news…

    The good news is that the system kick started the week once again with positive trading results within the first hour of the week. The index opened lower and it caused the market the flip and flop a little between and up and down trend. But once the intraday trend took hold the systems both reached their T1 (first target) less than an hour after the opening bell to lock in $400 profit. The systems are still long 1 contract and deep in the money as you can see below.

    Image

    Also, one of our improvements to the systems was our improved Risk Containment and Equity Protection features. This improvement will be explain in more detail in another email/video but in short this reduces the amount of potential gain we give back when the market rolls over and starts moving against our second contract. For example in the past we would see our positions up $800 - $1500 but when the trade was closed we only realized $150 - $400. The improved systems now lock in more profits $450 - $950 in these similar trade situations.

    Now for the Not So Good News. To be honest this news isn't all that bad but we want to be sure you know what is going on. In the past week the emails and phone calls have been rolling in faster than we can take them. The list of phone messages we need to listen to and call traders back is crazy long.

    The solution, I know many of you want to speak with us before subscribing and want to join before the 30 day pre-live trading special offer is gone forever so this is what you should do and expect:

    Emails are the best and quickest way for us to respond, but if you would like to speak with someone PLEASE leave a phone message and we will return your call within a day or two.

    These new and improved systems will be going live for users on Sept 1st (TEN DAYS). Fastest way to get setup is to subscribe now to reserve your seat and take advantage of the special offer, then visit our broker's page and click on a link to open a trading account and get it funded. We have direct broker support phone numbers to help you fast track the process: Open Account: http://www.algotrades.net/automated-trading-systems/

    Hope you had a great weekend!

    Talk soon

    Chris Vermeulen

    Tags: SPY, DIA, IWM, QQQ, futures, spx, sp500
    Aug 18 1:23 PM | Link | Comment!
  • Global Markets And Dow Jones Fire Warning Shot Across Investors Bow!

    Last week, the global equity markets were quite undecided. China's and Japan's equity prices have been moving higher. The Japanese Nikkei reached its highest level since 1996 on Tuesday, August 11th, but then pulled back at the end of the week. Hong Kong's Hang Seng made a new monthly low and the Australian Market fell to a new 6-month low.

    Europe was more decisive. Traders mostly sold stocks. The German DAX, London FTSE, and Zurich SMI all fell to monthly lows by mid-week and did not recover much by Friday August 14th's close. In Russia, it was much different. Moscow's MICEX index rallied to its highest mark in 3 months.

    In the US Markets, the selling was even more intense. On May 19th,2015, the DJIA topped out at 18,351. The DJIA has failed to make a new high since then and continues to sell off. The decline, so far, has been over 1,220 points which is its' greatest loss of the year. Last week, began very strong, with the DJIA up 245 points on Monday, August 10th; Tuesday was down 212 points, and by Wednesday, the DJIA had fallen all the way to 17,125, its' lowest level since February 2nd, 2015. We had a CONFIRMED BEARISH/SELL signal on August 4th, when the Dow Jones was at 17,596. Before I can take any BEARISH positions in the US Markets, this signal needs to be CONFIRMED by the SPX and the NDX-100 as BEARISH, which are currently NEUTRAL/TRENDLESS. (SPY, DIA, IWM, QQQ)

    The SPX landed at support levels and found its' footing, once again. We are getting closer to the cycle lows in September/October when the downward pressure will push it through its' support trend lines. We are still into a sideways direction. It is a little too early to tell if it will continue the sideways motion or decline in some downward momentum, next week. SPX is undergoing a consolidation in a downtrend trend using the 200- Day Moving Average as support. A daily close below 2076, which does not hold, should bring about the next challenge to the 2040 major support level. The current declining patterns are represented in those of the DJIA,, NYSE and the Dow Jones Transportation Indexes.

    (click to enlarge)

    The Dow Jones Transportation Index and the Dow Jones Industrial Average are leading the US Markets down during this topping process They are declining further than the other indexes, and the other indexes should be establishing their downtrends, in the near future. With the exception of a monumental one-day market crash, that happens once in a blue moon, bull markets that are topping undergo a drawn-out process that usually takes, at least, many months before bearish momentum finally takes over and a new downtrend emerges.

    (click to enlarge)

    Considering that US stocks have been in a 7-year bull market, it would be unreasonable to expect such bullish momentum to change overnight.

    Therefore, even though price momentum has been favoring the bulls lately, it is still my belief, that it is dangerous to be invested on the long side of these markets, as of November 25th, 2014.

    The stock market is undergoing a big trend change and most of the analysts are missing it, which is normal. They lack the access to "The Predictive Trend System Analytic's" of a Financial Forecasting Model. My clients have the access to this knowledge from our subscription service that we provide. This knowledge provides you, the client, with THE EDGE that other professional investment firm's lack.

    U.S. equity markets have been fueled by cheap dollars and cheaper interest rates. The combination of the stock market crash from 2008 - 2009, along with a declining U.S. Dollar, has been destroyed by the Federal Reserve Bank (NYSE:FRB), which has helped US Equities to become a bargain on the global market. This allowed foreign buyers to come in and purchase US Equities, at both a nominal value, based on the markets' decline, as well as, a relative value based on their home currency. Foreign investors have capitalized on the rise in the US equity market

    On November 25th, 2014 my **Global Sentiment Model signaled the "EXCESSIVE EXTREME OPTIMISM", which provided an exit point on all long US Market positions . Those traders and investors, that remained in long positions, who were not subscribers to our service, at that time, have just been channeling, without any new break outs into new highs.

    There is a huge disconnect between the popular sentiment, among the "talking heads" on the news, regarding how these events will affect the September 2015 meeting of the Federal Reserve Bank. The general consensus, that I feel currently exists, is that this could very well push any increase in interest rates, out into the year, 2016. The Federal Reserve Board of Governors has been decidedly dovish, regarding this aspect, and has continued its' quantitative financial engineering.

    INVESTOR SENTIMENT READINGS

    High bullish readings in the sentiment stock index usually are signs of Market tops; low ones, market bottoms.

     

    Last Week

    2 Weeks Ago3 Weeks Ago
    AAII Index
     Bullish30.5%24.3%21.1%
     Bearish36.131.740.7
     Neutral33.444.038.2
    Source: American Association of Individual Investors,
     

    Our current sentiment and technical features are consistent with a major stock market top. This model uses the market sentiment composite which is a measure of investor sentiment. This metric tracks the mood of investors, which is then translated into a probability whether the markets will advance or decline, within the near term, as well as, an undisclosed period of time. It is a contrarian indicator that produces a bullish signal, when market sentiment is overwhelmingly negative, and a bearish signal when markets are overwhelmingly bullish.

    We have not disclosed these models' methodology, and its statistical data, as it is proprietary. We have also not disclosed the correlation coefficient that is used to measure the strength of the linear dependence and its' algorithms between the market sentiment composite and the 12-month forward return. A trading friend of mine developed this model thirty years ago. For the period of time that it has been implemented, which is now 25 years, it has been predicatively accurate, 100% of the time, prior to any major changes within the US Markets. The last signal that was generated was on November 25th, 2014, which registered "EXCESSIVE EXTREME OPTIMISM" and the broad market had been trading sideways since.

    Learn how to read the market and make the same trades we do: www.TheGoldAndOilGuy.com

    Chris Vermeulen

    Tags: SPY, DIA, IWM, QQQ
    Aug 17 2:53 PM | Link | Comment!
  • Ugly Outlook – Global Economics, Quantitative Easing And Equities

    A take on the global economy and equities markets that paints a simple and clear pictures I think.

    The DJIA index has recorded seven consecutive down days in a row! These 7 distribution days are a sign that many institutions are taking profits or establishing losses.

    As we are entering the second half of 2015, financial panic is occurring globally. Currently, this tremendous financial devastation is happening throughout the world. Stock prices are crashing in China, Europe and soon I feel the United States. Puerto Rico has now defaulted on their debts. Quantitative Easing has been masking the symptom of this endemic disease. The Greek Banks are still frozen and will continue to stay this way; however, the mainstream media is not reporting on this current situation in Greece. There is a limit on weekly withdrawals of 420 Euro per (around US $455).

    The corporate leaders of the major banks were left in place back in 2008/2009 and were allowed to continue receiving their huge bonuses. Their banks only existed because of the unprecedented taxpayer subsidy. The system is still essentially the same as it was before, due to any lack of meaningful reforms that have been required. It is this lack of change in all the required global fiscal policies that I am warning you of the coming collapse of this new "Asset Bubble". This is where "profits" are Privatized and "losses" are Socialized.

    The printing of limitless sums of virtually free money under various "Quantitative Easing" programs and simultaneously slashing interest rates to their lowest levels in history has created stock markets that have been artificially "levitated" for many years now. This growth is based on virtually "free money". I am warning you that the current business valuations and calculations are NOT accurate and even NON-sustainable. Our previous "Credit Bubble" has now been leveraged and replaced by an even larger and more dangerous "Asset Bubble".

    The Federal Reserves easy money policies have left stocks and bonds on the verge of a massive collapse. Their "Financial Engineering" has created such a "horrendous bubble" that it will lead to the largest historical economic deflationary depression that we have ever experienced. This bubble, when it finally implodes, is going to be absolutely devastating to the global economies. All irrational bubbles eventually burst.

    (click to enlarge)

    What is actually required today is a universally respected reserve asset capable of filling our current void with a reliable presence that serves as a "store of value". We do not require a complex international committee to solve this new future problem. This "store of value" asset is already in existence and currently held by some central bankers and prudent individuals around the world. It is known as gold. From the ruins of our chaotic financial crisis, a degree of sanity will prevail. Gold, as a freely floating asset, will arise in stature as the only element of global monetary reserves. The floating aspect is the vital evolutionary improvement over all previous structural monetary failures which tried to use a gold standard at a fixed price (i.e: unit of account).

    When the global financial crisis hit in 2008, U.S.Dollar liquidity dried up and international financial markets experienced widespread paralysis. First to the scene was the U.S. Federal Reserve Board, pumping liquidity into the system and establishing a series of large-scale bilateral swap agreements with major central banks. This included several countries in the major emerging markets. The International Monetary Fund (NYSE:IMF) followed with a number of programs for countries hit by the crisis and it adapted its financing toolkit to meet the demands of the crisis. For the first time, policy makers looked to the Special Drawing Rights (NYSE:SDR) to provide much-needed liquidity throughout the international monetary system.

    SDR is an artificial "basket" of currency used by the International Monetary Fund (IMF) for internal accounting purposes. The SDR is also used by some countries as a peg for their own currency and is used as an international reserve asset. The SDR was created by the countries participating in this system who needed official reserves (government or central bank holdings of widely accepted foreign currencies) that could be used to purchase the domestic currency in foreign exchange markets where it is required to maintain its exchange rate. It is a potential claim on the freely usable currencies of IMF members. The Special Drawing Rights was created by the IMF in 1969 to support a fixed exchange rate system.

    The SDR is neither a currency nor a claim on the IMF. It is a potential claim on the freely usable currencies of IMF members. Holders of SDR can obtain these currencies in exchange for their SDR. The SDR is primarily a unit of account for the purpose of accounting.

    It is my view point that the SDR, which is a "Virtual Reserve Currency", will never come close to achieving a status anywhere near that of "the principal reserve asset in the international monetary system" as envisioned by The International Monetary Fund for a future global reserve currency!

    Gold has been declining sharply since its all-time high of $1,920/ounce on September 2011. It is experiencing a historical correction that we forecasted years ago. I am expecting much lower prices over the next few months. My predictive trend and cycle strategy will inform us when we have roughly hit the bottom of these two markets (gold & silver).

    Today, the majority of investors now believe gold is dead and no longer relevant and that cash and the U.S. dollar is King. With this type of "herd mentality", investors will mostly likely miss the next historical buying opportunity for metals, and miss the ultimate short-sell trade on US equities.

    Chris Vermeulen
    TheGoldAndOilGuy.com - ETF Trade Alerts

    Algorithmic Trading Strategies Developer & Trader

    Tags: DIA, SPY, IWM, QQQ, SDS
    Aug 10 2:03 PM | Link | Comment!
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