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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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  • Investors And Traders Prepare, But Don't Execute Yet!

    The US stock market continues to grind higher but is doing so with eroding market internals. As the market indexes rise we see fewer stocks moving up to support the move. It's a matter of time before a large correction occurs.

    It seems everyone is calling for a market top, and many have done so for the past 3 years. But the key to success is to follow the market, not predict market tops or bottoms. We follow price trends and trade alongside. We do have a bearish tone looking forward the next 1-2 years for stocks, but we are not calling a market top, nor are we shorting the market in anticipation. Instead, we actively trade the markets smaller trends which occur on a regular basis (weekly and monthly) through active buying, and shorting these smaller trends.

    The month of July has been an incredible month for the new and improved automated trading system as you saw from the Results posted recently. The frustrating part is that it takes some time for us to move and integrate this improved system into our platform for our users. While the system is trading incredibly well during one of the toughest market conditions we have experienced in years, we are excited that our users will have these trades executed in their accounts starting September 1st.

    Adding to this excitement is the fact that stocks typically fall 3-7 times faster than they rise, which means we can make more money, and make it faster during a falling market then we do from a rising market. Once the major trend turns down (likely later this year) we will be off to the races with out-sized trading gains once again.

    Over the next couple months we should start to see the US equities market top, and start its first major correction. Once it start we trade the market in a way that should generate gains as the stock market falls in value.

    S&P 500 Monthly Chart - 7 Year Cycle

    The SP500 index (US Stock Market) continues to be in and Uptrend. SPY, SH, SDS, UPRO

    The major trend line on the chart below must be broken in a big way before a full blown bear market will be confirmed. This is still months away at best. The AlgoTrades INNER-Market Analysis will get us positioned when the time is right and enable us to profit as the stock market loses value.

    Your long term equity investments can continue to be held at this point. Speculative and momentum stocks (Russell 2K) continue to show weakness. Large cap stocks will likely be in favor as the safe haven "blue chip" stocks, but when the market is ready to roll over, all stocks will fall.

    I do fear a global economic collapse is possible which I talk about in our GoldAndOilGuy Trading Newsletter. But at this time, we do not need to change our trading approach and investment capital. But when certain events start to happen in the USA and abroad we will need re-allocate some of our investment capital, but again, we will keep you updated on this also when the time is right.

    (click to enlarge)

    S&P 500 Quarterly Chart - BIGGER PICTURE

    This chart I feel provides a great perspective on the overall market trend and price patterns. This is the 70 year prospective. I hope something like this unfolds. Fingers crossed to a nominal 12 month correction/bear market. This will build a new base for the next super cycle.

    US Dollar has now reached the upper resistance trend line… we could see weakness in the dollar going forward… Keep in mind this is a quarterly chart, lower prices may still be a few months away.

    (click to enlarge)

    Factory Orders Scream Recession/Correction

    This has never happened outside of recession… Year-over-year, factory orders dropped 6.3% (adjusted) but 8% non-adjusted, the most since the financial crisis. Against expectations of a 0.5% drop MoM, manufacturers saw new orders tumble 1.0% and previous months were revised dramatically lower. Factory orders has now missed 10 of the last 11 months. Factory Orders have fallen for 9 of the last 10 months…

    factory1

    factory2

    Source: ZeroHedge

    Also, the New York Stock Exchange and SP500 indexes are losing momentum.

    The SP500 index has been trading sideways the over the last 6 months. It has not provided many trades for our automated trading system (AlgoTrades).

    NYSE BIG BOARD STOCKS - Breaking Down

    (click to enlarge)

    Stock Market Rises with Fewer Stocks - RED FLAG

    Since mid 2014 the US stock market has become move volatile. Fewer stocks participating in the markets move up. This can be seen by comparing the percent of stocks trading above their 200 day moving average and the S&P 500 index.

    Once the stock market comes to a complete stall it will drop violently. While I am not calling a top yet, understand each month we are getting closer and I believe the stock market is in a stage 3 topping process.

    (click to enlarge)

    INNER-Investor Monthly Conclusion:

    The New York Stock Exchange, S&P 500, and Dow Jones forming a bearish rising wedge which they appear to have broken down from. This could be the start of a bear market but until the price action truly confirms this the major trend remains up. The last quarter of 2015 will likely provide great opportunities for the active trader. BECOME AN ALGOTRADES USER TODAY - CLICK HERE

    Jul 31 2:47 PM | Link | Comment!
  • A Possible Takeover Target In The Making!

    Headquartered in Canada, Morro Bay Resources Ltd. (TSXV-MRB) has just acquired a 51% interest in an advanced stage silver and gold project called Peñoles in the Durango Silver Belt, Mexico. The project offers up significantly more than one sees in junior mining plays these days. As discussed further below, the project already has an initial Resource Report for two separate deposits (open in several directions), and overall the project looks like it has significant growth potential. Perhaps even more striking is the fact that the Morro Bay Property is located in one of the most active (and lowest cost) mining district in North America. Several mid-tier and larger mining companies have built low capex operations in this district and are actively growing their production profile by acquiring projects similar to Morro Bay's Project.

    From an investor's point of view, the fact of significant previous transactions in the area points us to believe the Morro Bay property could very likely be another take-out target. If such occurs, it should result in a significant gain in share value. Two transactions recently occurred and were based on properties very near to Morro Bay's property and resulted in significant payments to the shareholders.

    First in December 2013, Argonaut Gold Inc. acquired the San Agustin Project from Silver Standard Inc. for total consideration of $75 million. Similar to the Morro Bay Property, at the time of purchase a mine had yet to be built and the resource estimate estimated Indicated Resource of 121,000 ktonnes with grades of 0.41 g/t gold and 12.3 g/t silver (see the Argonaut news release dated November 5, 2013).

    Similarly, in 2013, Coeur Mining Inc. purchased the La Preciosa project from Orko Silver (at the time a TSX:V company) by acquiring all of the shares of Orko for consideration totaling $384 million. This represented a value of CAD$2.70 per Orko share, a premium of approximately 71% to the Orko share price. The La Preciosa Property was the only material asset of Orko at the time. No producing mine was present at the time. The mineral resource and mineral reserves estimate provided by the Orko NI 43-101 Report dated October 25, 2012 reported an Indicated resource of 29,700 ktonnes with grades of 0.20 g/t gold and 104 g/t silver.

    As announced by Morro Bay in compliance with securities laws, (and as further discussed below) Morro Bay reported an initial resource estimate for one deposit (El Capitan - primarily gold) 20,722 ktonnes with a grade of 0.46 g/t and for the second deposit (Jesus Maria - primarily silver) 7,573 ktonnes with a grade 62.3 g/t of silver (the full NI 43-101 Resource Report can be found at morrobayresources.com). These grades are very similar with those of the above two referenced sales. As a result, it is possible that Morro Bay and its partner (owning 49%) could see themselves being offered $75 million, more or less for control of the Project. That works to about $0.375 per Morro Bay share (using an estimated outstanding share float of 100 million shares after completion of Morro Bay's financing). Currently the stock is trading around a nickel. Note that this is just speculation and assumptions that are loosely based on previous transactions.

    Regardless, it appears that with the transactional history in the Durango Mining District, Morro Bay could be the next one to be purchased. So far the Company has consistently reported good drill results and they are planning a 20 hole drill program that will delineate the extent (near surface) of the known deposits. If results meet expectations, the Company will have the information required to advance the project to a PEA level assessment (Preliminary Economic Assessment) and things should get exciting.

    Morro Bay is initiating a private placement financing opportunity for investors. Seeking to raise up to $1,500,000. The company is offering units consisting of 1 common share and 1 share purchase warrant at a unit subscription price of $0.05. The warrant terms of the financing indicate an exercisable option for one common share at $0.05 during the first year and for $0.10 during the second year. $1 million of the funds raised will be dedicated toward exploration at the Project, while $500,000 will be allocated for corporate purposes.

    A recently listed junior mining company, Morro Bay presents a strong position in the industry, as it maintains an experienced leadership team. The company's Board of Directors and Executive Management team, presided by CEO, John C. Zang, presents experience and expertise in public junior companies along with strong exploration and asset management skills and prior success in generating shareholder value. During the last 15 years Zang has been a director and/or officer of many junior companies provided substantial value returns to shareholders (almost always over 5 times their initial investment over a less than 3 year span per company). It appears as though Mr. Zang is prepared to do it again in Morro Bay. Mr. Zang states that "I look for valuable assets that larger companies will want to acquire on a timely basis. With the Morro Bay Mexican gold and silver property we have something which I believe places Morro Bay as a significant available seller to the majors around us." As shown in the map below there does appear to be significant players in the area:

    (click to enlarge)

    As indicated above, this is not just a blind prospector looking for gold and silver. Morro Bay has found the gold and silver-it is creating value and has significant potential. It seems like this represents a solid opportunity to take a stake in silver and gold play that MAY be sold for many times the current trading price. Currently, you can get an even greater exposure by participating in the company's private placement. If you are interested please email me at chris@thetechnicaltraders.com and I will direct you to the proper company representative.

    Chris Vermeulen

    Disclosure of Interest and Advisory Cautions: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn't well known. Technical Traders Ltd. and the author of this report has been paid by Morro Bay Resources Ltd. In addition, the author owns shares of Morro Bay Resources Ltd. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author's views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

    Jul 07 1:06 PM | Link | Comment!
  • Core Traits Of Successful Junior Exploration Stocks – Hidden Gems

    The Time Has come again to own a few very special situation resource stocks that I believe will sky rocket in value over the next few months.

    I have not owned any junior exploration companies since 2011 when the top was formed in the sector, and in fact I shorted miners early this year for some decent gains.

    But I believe now is time to add a few small positions to my portfolio which should provide big rewards during a time when the overall equities market and financial system are about to struggle.

    From being involved in the precious metal market since 2001 I have seen numerous exploration companies succeed and even more fail. But what is important to understand is that each of these winning companies had the same core things working for them.

    Characteristics among Successful Exploration Companies:
    1. Properties located in a proven resource rich zone
    2. Properties explored and have proven value in the ground
    3. Low-cost operation and logistics for transportation ore and supplies
    4. Management team which proven track record of success
    5. Market timing - completes exploration for being acquired or starts producing just before a resource bull market.

    These core characteristics are what allow companies to emerge as buyout targets and get acquired or become low cost producers. Both of these outcomes can generate a substantial increase in share value.

    While junior producers can generate more share value growth than that of a company being acquired, they typically take more time to mature and become known.

    But, junior exploration companies who have fully explored their properties and know the value being stored in the ground through the use of drilling and a PEA, provide a much different type of potential reward to its shareholders.

    When these tiny, unknown hidden gems are acquired, investors tend to see the share price gap higher to the purchaser's value and stay there, to generate gains of 6x or more return on investment in many cases.

    Recently I shared my junior oil exploration stock I own with my followers. It is becoming a producer as we speak and the next couple weeks are going to be exciting. Its share price has surged from 6 cents to 24 cents and the crazy part is no one knows about it yet. (OTCPK:CRRDF)

    Also a few weeks ago I shared two junior gold and silver exploration companies which will become producers. One should start producing within a couple weeks, another is still a few months out, but when they do I expect share value to rise substantially. (OTC:CMCXF, OTCQX:DTVMF)

    In a couple days I will share with you another stock I personally own. This is a silver stock and provides a different type of investment opportunity than normal. This type of play should be in your portfolio for the coming resource bull market I expect to start later this year.

    Get My Hidden Gem Stock Picks Free: www.GoldTradingNewsletter.com

    Chris Vermeulen

    Tags: CMCXF, CRRDF
    Jul 05 11:01 AM | Link | Comment!
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