Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
THE STOCK MARKET BIG PICTURE - Video - 19th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
ILLEGITIMATE PRESIDENT - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stocks are Strong but be Aware of this Continuing Pattern

Stock-Markets / Stock Markets 2020 Oct 29, 2020 - 12:39 PM GMT

By: Chris_Vermeulen

Stock-Markets

The last 6+ trading days before the US elections could result in a confirmation of last month’s SPY Dark Cloud Cover pattern or a potential Harami pattern setup. What does this mean for traders and investors?

The Dark Cloud Cover pattern is a very ominous potential Top/Sell trigger in Japanese Candlestick terms.  It is a fairly common pattern, like the Engulfing Bearish pattern, that manifests near major peaks in price. The one thing that really stuck out with the current Dark Cloud Cover pattern on the Monthly SPY chart was the size of the pattern.  The current Dark Cloud Cover pattern on the Monthly SPY chart spans 39.56 points (nearly an 11% price range).  Comparatively, this pattern is very large compared to the more recent price peak ranges.

Over the past 30+ days, we’ve published multiple research articles related to the core technical elements of the SPY chart and the Dark Cloud Cover pattern that set up in September.  Pay very close attention to the Fibonacci Price Amplitude Arcs that also show key resistance playing out near the recent peaks. Finally, don’t forget to read our Grey Swan Alert in October’s issue of TradersWorld.


At this point, the SPY needs to decline by 3.5% to 4.5% from current levels to confirm the Dark Cloud Cover pattern.  This represents a price decline of only about 11.00 to 15.00 overall over the next 5 days.  We believe this is a very important price trigger setup for technical traders.  If this setup does confirm, then we would be very concerned that deeper downside price trends may continue after the US elections.

MONTHLY SPY DARK CLOUD COVER SETUP

The Dark Cloud Cover pattern, in this instance, is excessively large compared to previous setups and strongly suggests a major price peak may have already set up in the US stock market.  This may translate into a new price trend/cycle that many traders are completely unprepared for. This SPY Monthly chart below highlights the Dark Cloud Cover pattern and what we believe is needed to confirm this pattern.  Any extended selloff over the next 5+ days could either confirm this pattern or setup a Harami pattern, which also warns of a price reversal.

DARK CLOUD COVER ON THE DAILY SPY CHART

Interestingly, the Dark Cloud Cover setup on the Daily chart represents a very clear change in price trend.  In order for the Dark Cloud Cover pattern to form, a strong bullish price trend must initially setup the rally to highs.  This trend suddenly changes and a deep price correction sets up the “close below the midpoint of the real Body” – creating the Dark Cloud Cover pattern.  Once this is set up, we are just waiting for “confirmation” – which is often identified as a lower high, lower low, and lower close on the following candle.

Our research team believes that any continued selling in the SPY over the next 5+ days could prompt confirmation of the Monthly SPY Dark Cloud Cover pattern – as shown on the Daily SPY chart below.  We believe the transitional shift of capital before the US elections and the lack of market liquidity may prompt a moderately strong downtrend over the next few days leading into the US elections.  If the Dark Cloud Cover pattern does confirm, skilled traders need to prepare for more potential market weakness after the elections.

All it takes at this point is a moderate 3.5% to 4.5% downside price move in the SPY to confirm this massive Dark Cloud Cover pattern.  The size of this pattern is 400% to 600% larger than the price range peaks in 2000 and 2008, and is nearly 30% larger than the entire trading range between 2015~2016 (the two years prior to the 2016 US elections).  That range comparison, alone, should shock skilled technical traders.  A two-month Japanese Candlestick pattern includes a price range which is warning of a potential massive top in the markets AND that pattern is larger than the incredibly volatile trading range spanning more than 24 months between 2015 to 2016.

If you are having any trouble comprehending this range comparison, think of it this way…  the current price range suggests that one month’s trading range is 100% to 300%+ larger than a full 12 months trading range prior to 2017.  It is massive in comparison to historical ranges. This suggests we may see a very volatile price rotation over the next 12 to 24+ months in the US and global markets.  One way or another, volatility is here and we better get used to it.

Visit www.TheTechnicalTraders.com to learn how we can help you find and execute better trades and avoid risk.  If you follow our research, you already know we have stayed well ahead of these trends and big price rotations in the US stock market.  What’s next is even more big trends and profits for those able to engage in the best trade setups.

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: 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 Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. 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.

Chris Vermeulen Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules