The SP500 Breaks 2018 February Lows - What Next?

The ES (S&P e-mini contracts) broke the support level from the February 2018 lows immediately after the US Federal Reserve announced a 25 bp rate hike this week. This breakdown below the February 2018 lows is concerning because it indicates that previous support is not holding and we could be in for further downside price activity.

We are preparing a detailed research post for early next week regarding a broad range of US markets as well as how our proprietary price modeling systems are reflecting this recent price move. What we can suggest to all investors is play small positions at the moment and prepare for increased volatility. There is near term support that may come into play soon, but overall the markets are reacting to a deleveraging event that could see prices push below 2400 before finding true support.

Visit The Technical Traders to read all of our recent research posts and see what we believe will be the big movers in 2019.

Chris Vermeulen

Will Crude Oil Follow These Historical Patterns?

Our research team and partners at Technical Traders Ltd., has been very interested in crude oil recently as the current rally appears to have rotated lower near a top. Our predictive modeling systems, predictive cycle analysis and other tools suggest Oil/Energy may be setting up for a downward price trend. This may be an excellent opportunity for skilled traders to identify profitable trades as this trend matures.

This Daily Crude Oil Chart shows our Predictive Cycle Modeling system and shows the projected price cycles out into the future. One can see the downside projected price levels very clearly. This cycle analysis tool does not predict price levels, it just predicts price trends. We can’t look at this indicator and think that $72 ppb is a price target (near the right side). We can only assume that a downward price cycle is about to hit and use historical price as a guide to where price may attempt to fall to.

Using our adaptive Fibonacci price modeling tool, we can see from the chart below that downside price targets are currently near $72 ppb, $67 ppb and $65 ppb. Therefore, we believe the $72 price level will become the first level of support, where our price cycle tool suggests a small rotation may occur, and the $67 price level may become the ultimate downside target level.

We believe the current price rotation in Oil/Energy may be setting up for a decent downside price move with a lower price target at or below $67 ppb. Historical data shows that this type of price action, downward, at this time is historically accurate and predictable. If you want to know how you can profit from this move and learn how our research team continues to find and execute superior trades for our members, visit The Technical Traders to learn more.

Chris Vermeulen

Technical Analysis Confirms Support Level on the SPX

This week presented some interesting price rotation after an early upside breakout Sunday night. The Asian markets opened up Sunday night with the ES, NQ and YM nearly 1% higher this week. This upside breakout resulted in a clear upside trend channel breakout that our researchers believe will continue to prompt higher price legs overall. Our researchers, at Technical Traders Ltd., have issued a number of research posts over the past few weeks showing our analysis and the upside potential in the markets that should take place over the next few weeks.

We expected a broad market rally this week, yet it has not materialized as we expected this week. We consider this a stalled upside base for a new price leg higher. Take a look at this Daily SPY chart to illustrate what we believe the markets are likely to do over the next few weeks. There are two downside price channels that have recently been broken by price (RED & YELLOW lines). Additionally, there is clear price support just below $272.00 that was recently breached. These upside price channel breakouts present a very clear picture that price is attempting to push higher and breakout from these price channels.

Current price rotation has tested and retested the price support level near $272.00 and we believe this recent “stalled price base” will launch a new upside price rally driving price well above the $280.00 level.

With the holiday weekend setting up in the U.S. and the early Summer trading levels setting up, it is not uncommon for broader market moves to execute after basing/staging has executed. This current upside price action has clearly breached previous resistance channels, so we continue to believe our earlier research is correct and the US majors will mount a broad range price advance in the near future.

The VIX, on the other hand, appears poised to break lower – back to levels below $10 as the US major price advance executes. The VIX, as a measure of volatility that is quantified by historical price trend and volatility, should continue to fall if our price predictions are correct. If the US major markets continue to climb/rally, the VIX will likely fall to levels well below $10.00 and continue to establish a low volatility basing level – just as it did before the February 2018 price correction.

A holiday weekend, the start of lighter Summer trading and the recent upside breakout of these downward price channels leads us to believe the market will continue to push higher over time with the possibility of a massive upside “melt up” playing out over the next 2 - 6+ weeks. We believe this move will drive prices to new all time price highs for the US majors and will surprise many traders that believe the recent price rotation is a major market top formation.

Our exclusive Wealth Building Newsletter provides detailed market research, daily market video analysis, detailed trading signals and much more to assist you in developing better skills and greater success in your trading. One of our recent trade in natural gas using UGAZ, [check it out here] is already up over 26% and we believe it will run another 25-50% higher from here! We provide incredible opportunities for our member’s success. We urge you to visit The Technical Traders to learn how we can assist you in finding new success.

Our 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.

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The Colder War and the End of the Petrodollar

By Marin Katusa, Chief Energy Investment Strategist

The mainstream media are falling over themselves talking about Russia’s just-signed “Holy Grail” gas deal with China, which is expected to be worth more than $400 billion. But here’s what I think the real news is… and nobody’s talking about it—until now, that is. China’s President Xi Jinping has publicly stated that it’s time for a new model of security, not just for China, but for all of Asia. This new model of security, otherwise known as “the new UN,” will include Russia and Iran, but not the United States or the EU-28.

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This monumental gas deal with China does so much more for Russia than the Western media are reporting. First off, it opens up Russian oil and gas supplies to all of Asia. It’s no coincidence that Russian President Putin announced the gas deal with China at a time when the tensions with the West over Ukraine were growing. Putin has U.S. President Obama exactly where he wants him, and it’s only going to get worse for Europe and America. But before I explain why that is, let’s put this deal in terms we can understand. The specific details have not been announced, but my sources tell me that the contract will bring in over U.S. $10 billion a year of revenue to start with.

The 30 year deal states that every year, the Russians will deliver 1.3 trillion cubic feet (TCF) of gas to China. The total capital expenditure to build the pipeline and all other infrastructure for the project will be more than $22 billion—this will be one of the largest projects in the world. You can bet the Russians won’t take payment in US dollars for their gas. This is the beginning of the end for the petrodollar.

The Chinese and Russians are working together against the Americans, and there are many countries that would be happy to join them in dethroning the U.S. dollar as the world’s reserve currency. This historic gas deal between Russia and China is very bad news for the petrodollar. Through this one deal, the Russians will provide about 25% of China’s current natural gas demand. In a word, this is huge. It’s also not a coincidence that Putin sealed the deal with China before the Australian, US, and Canadian liquefied natural gas (LNG) terminals are completed. If you read our recent Casey Energy Report issue on LNG, you know to be wary of the hype about LNG’s “bright future.” Take note: this deal is a serious negative for the global LNG projects.

I also stated in our April 2012 newsletter:

Putin has positioned Russia to play an increasingly dominant role in the global gas scene with two general strategies: first, by building new pipelines to avoid transiting troublesome countries and to develop Russia’s ability to sell gas to Asia, and second, by jumping into the liquefied natural gas (LNG) scene with new facilities in the Far East.

Pretty bang on for a comment that was made over two years ago in print, don’t you think?

So, what’s next? Lots. Putin will continue to outsmart Obama. (Note to all Americans: the Russians make fun of you—not just for your poor choice of presidents, but also for your failed foreign policy that has led to most of the world hating America. But I digress.) You will see Russia announce a major nuclear deal with Iran, where the Russians will build, finance, and supply the uranium for many nuclear reactors. The Russians will do the same for China, and then Syria. With China signing the natural gas deal with Russia and the president of China publicly stating that it’s time to create a new security model for the Asian nations that includes Russia and Iran, it’s clear China has chosen Russia over the U.S.

We are now in the early stages of the Colder War.

The European Union will be the first victim. The EU is completely dependent on Russia for its oil and natural gas imports—over one-third of the EU-28’s supply of oil and natural gas comes from Russia. I’ve been writing for years about this, and I’m watching it come true right now: the only way out for the EU countries is to use modern North American technology to revitalize their old proven oil and gas deposits.

I call it the European Energy Renaissance, and there’s a fortune to be made from it. Our Casey Energy Report portfolio has already been doing quite well from investing in the European Energy Renaissance, but this is only the beginning. If Europe is to survive the Colder War, it has no choice but to develop its own natural resources. There are naysayers who claim that Europe cannot and will not do that, for many reasons. I say rubbish.

Of course, to make money from this European dilemma, it’s imperative to only invest in the best management teams, operating in those countries with the political will to do what it takes to survive… but if you do, you could make a fortune. Doug Casey and I plan on doing so, and so should you.

For example, two weeks ago in this missive, I discussed “The Most Anticipated Oil Well of 2014,” where if you invested, in just two weeks you could be up over 40%. Not only did I write in great detail about the company, I even interviewed the CEO because of the serious potential this high-risk junior holds. I said in that Dispatch that the quality of the recorded interview wasn’t first class, but the quality of information was. The company just put together a very high-quality, professional video showing its potential, and I include it here for all to watch.

Since my write-up, the company has announced incredible news. It’s only months away now from knowing whether or not it has made a world-class discovery. Subscribers to the Casey Energy Report are already sitting on some good, short-term profits with this story, but it keeps getting better.

The more the tension is building in Ukraine (and it’s going to get worse), the more money we’re going to make from the Colder War. There’s nothing you can do about the current geopolitical situation, but you can position yourself and your family to benefit financially from the European Energy Renaissance.

Now You Can Take the Lead… We Make It Simple

We expect great things from this company and other companies that are exposed to the European Energy Renaissance. You can read our ongoing guidance on this and our other top energy stocks every month in the Casey Energy Report. In the current issue, for example, you’ll find an in-depth report on the coal sector, uranium, and updates on all of our portfolio companies that are poised to benefit most from the European Energy Renaissance.

There’s no risk in trying it: If you don’t like the Casey Energy Report or don’t make any money within your first three months, just cancel within that time for a full, prompt refund. Even if you miss the cutoff, you can cancel anytime for a prorated refund on the unused part of your subscription.

You don’t have to travel 300+ days a year to discover the best energy investments in the world—we do it for you. Click Here to Get Started.

The article The Colder War and the End of the Petrodollar was originally published at Casey Research

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Obama’s Secret Pipeline

By Marin Katusa, Chief Energy Investment Strategist

Isn’t it odd that an 800 mile pipeline that runs across environmentally sensitive land has been permitted without any mention in the media? Not a word about it from President Obama either.

Obama’s Secret Pipeline will be built over land that’s much more sensitive than that of the Keystone XL pipeline, which gets nothing but front page coverage. It will actually be 17% (six inches) larger in diameter than Keystone XL (36 inches) and it will transport natural gas, not oil.

Bill 138

The Senate of Alaska, the state in which the pipeline will be built, has just passed Bill 138, which makes the state a partner of three of the world’s largest oil companies, including one that has a horrible environmental track record on U.S. soil. In a nutshell, Alaska’s government is now partners with BP, ExxonMobil, and ConocoPhillips.

Only one more signature is required—Governor Sean Parnell’s—and it’s expected that he will sign the deal.

Not Even the US Government Wants US Dollars

For more than 100 years, the U.S. government has been receiving a royalty and tax revenue paid on the amount of oil or natural gas produced on American soil—a fee that is paid in U.S. dollars. Bill 138 has changed this forever.

Instead of Alaska receiving its dues in U.S. dollars, the state legislature has decreed through Bill 138 that the state will be paid “in kind.” In other words, the state will be getting its share of royalty and tax revenue in natural gas instead of U.S. dollars.

For the record, this is the first time ever that a US state has entered into a partnership like this. Essentially, Alaska is now a 25% equity partner with BP, ExxonMobil, and ConocoPhillips—which also requires the state to cough up cold, hard cash to build the entire project, including the 800 mile long, 42 inch wide pipeline.

Overall, the project is currently estimated to cost north of U.S. $50 billion, and we expect that when all the capital expense overruns and government inefficiencies are accounted for, the whole project will come in at more than U.S. $75 billion, using the total costs of similar projects for comparison.

But it will be 2015 before the final negotiations and the specific details of the partnership are agreed on, and remember, the devil is in the details. Who do you think will get the better end of the deal—a bunch of government bureaucrats with zero oil and gas experience, or the world’s top oil and gas producing companies? I know whom I’m betting on.

Which leads us to the point of this weekly missive.

And the Winner of Obama’s Secret Pipeline Is…

We already know which company will be building and operating Obama’s Secret Pipeline. The company I’m talking about has a lower price to earnings (P/E) ratio and a better yield than all of its peers. That’s good, because shareholders get paid a monthly yield for owning the stock while sitting back and watching the share price rise as well.

The Ultimate Oil Toll Booth

Think of it this way: this company charges the world’s most powerful oil and gas producers for every barrel of oil that passes through its “road network,” and now it can also charge the state of Alaska. Regardless of the price of oil or natural gas, this company gets its fee.

It’s a low-risk way to benefit from a high risk enterprise. This company is a current Buy in our Casey Energy Dividends portfolio. The Energy team is currently working hard on the upcoming issue, which will in detail cover the company that’s bound to gain big from Obama’s Secret Pipeline.

I know you haven’t heard about this pipeline yet, but you will soon enough.

That’s what we do here at the Energy Division of Casey Research: We’re the first to uncover breakthrough stories, and the first to uncover the best energy investment opportunities in the world. Doug Casey and I just got back from a whirlwind European tour, where we visited many of Europe’s most promising energy projects.

Here’s a picture of Doug Casey and me at Europe’s largest onshore drill site. This drill rig is 15 stories high and uses about 16,000 liters of diesel a day to turn the drills—which Doug and I are holding in this picture. As a side note, just the crank shaft that we’re holding costs U.S. $2 million—this rig is expensive and gigantic.

For you to get a better perspective on the true size of Europe’s largest onshore drill rig, here is a picture of Doug Casey and me with our friends Frank Holmes, Frank Giustra, and Matt Smith.

(From far left to right: Frank Holmes, Doug Casey, Marin Katusa, Frank Giustra, Matt Smith)

 

Do Your Portfolio a Favor and Try Out the Casey Energy Report

Doug Casey and I have done all the hard work for you. The current issue of the Casey Energy Report is a compilation of our Europe trip, including in-depth descriptions of our site visits and a new recommendation with a hugely promising project in an out-of-the-way European country that we personally checked out. The company is backed by mining giant Frank Giustra, and you bet he knows what he’s doing.

The Casey Energy Report comes with a free one year subscription to Casey Energy Dividends (a $79 value), including, of course, the upcoming May issue with our “Obama’s Secret Pipeline” pick.

There’s no risk in trying it: You have 90 days to find out if it’s right for you—love it or cancel for a full refund. You don’t have to travel 300+ days a year (as we do) to discover the best energy investments in the world—we do it for you.

If you don’t like the Casey Energy Report or don’t make any money within your first three months, just cancel within that time for a full, prompt refund. Even if you miss the cutoff, you can cancel anytime for a prorated refund on the unused part of your subscription. Click here to get started.

The article Obama’s Secret Pipeline was originally published at Casey Research

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What High Frequency Trading Firms Don't Want You to Know

If you haven't heard about High Frequency Trading (HFT), now's the time to learn. HFT almost guarantees you'll lose as a day/short term trading individual, but John Carter shows you how you can beat the high frequency traders at their own game.

Mark your calendars for this Tuesday. It's in your best interest (if you're serious about your trading) to attend the webinar John's putting on THIS TUESDAY…

What HFT Firms Don't Want You to Know

You have two times to attend, and it's only happening TUESDAY. You'll learn....

   *   How to protect against High Frequency Traders
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   *   What is HFT's agenda?!
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And of course a lot more.....Just click here to get you seat NOW

John Carter and The staff at the Hedge Fund University


John's new video > HFT vs. John Carter: The Rise of the Machines

Is it Too Late to Get into this Monster UNG Trade?

Natural gas looks to be breaking out and it has John's attention. With monthly and weekly charts breaking out he is looking at futures contracts having the possibility of easily moving up to the 4.48 level which means there is a lot of options open for us options traders. And if you have been following us this week you know John is on a roll.

John has put together a detailed free video to show us just exactly how to play UNG and natural gas while limiting our risk just click here to watch "Is it Too Late to Get into this Monster UNG Trade?"


And if you haven't had a chance to see it yet take a few minutes to watch John's wildly popular webinar replay....."Nine Reasons Why You Should Trade Options on ETFs"

We'll see you in the markets, the natural gas markets!

Why has it been hard to make money as a trader?

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