March 17, 2019
Technical Traders Ltd.
It’s been years since the gold and silver topped out in 2011. We have been waiting for a new bottom form and a new bull market to emerge for nearly 8 years. In this article, I’m going to compare palladium, gold, platinum, and silver and show you which of these precious metals I feel is the best long-term investment and also the best trade for 2019.
The analysis presented below is based on technical analysis using previous significant highs, and Fibonacci extensions. Both of these techniques work exceptionally well for predicting price targets both to the upside and also price corrections to the downside. If you have never used Fibonacci retracement or extensions in your trading I highly recommend learning more about them. I have no doubt it will improve your market price projection targets for your investments. I have found this technique to be the number one best trading tool for projecting future price movements in all asset classes.
The charts below will show to price forecasts for each metal. The first price target is based on the previous significant high that price made between 2000 and the current timeframe. Previous significant highs are typically the first target for the price to reach and that is also our first major upside target for these metals. The second price target I use is based on Fibonacci extensions using stand out lows formed anywhere between 2002 to the current price time and projecting that forward into the future beyond the previous highs shown on the charts.
So let’s get started with the worst precious metal to invest in and work your way down to the best precious metal.
Palladium, In my opinion, is the worst precious metal to own for 2019. While palladium is used in everything from dentistry to groundwater treatment, Palladium is by far the most versatile precious metal. Only a little while ago palladium was not nearly as popular as it is today due to the incredible economic growth in developing countries especially China. This multi-use metal is steadily growing its importance in the markets hence the strong performance to date.
There is no doubt that Palladium has staged a massive rally from the 2009 lows and also another mega-rally from the 2016 low. But, knowing the best performing investments eventually become the worst performing investments later, let’s take a look at the chart of Palladium and see why I feel as though Palladium is the worst investment metal for 2019.
The monthly chart of Palladium below shows the previous high in price in the year 2000. That high has been broken and now the price has gone parabolic blasting above that level to the 1550 mark. At this point, the previous high target has been breached and we no longer see that as a price target. There is zero upside potential based on the previous high.
The second price target is based off the lows in 2016 using the Fibonacci extension the pullback in 2018 followed by this recent rally. This gives us a price projection of nearly $1500 an ounce. As you can see this perfect bull flag (continuation pattern) has reached the hundred percent Fibonacci measured target of 1500. Therefore I see this upside move as being complete and it is more likely to pull back and correct in 2019 with 0% upside potential. Anything beyond this price level is a bubble which could burst at any time and carries a high level of downside risk.
Gold is the second worst investment for 2019 when it comes to precious metals in my opinion based on potential upside growth. Keep in mind I am very bullish on the price of gold looking forward but other metals definitely have a lot more profit potential than gold.
As you can see on the monthly chart of gold the previous high was about $1900 in 2011. That level is our first price target for gold upon a breakout of this multiyear basing formation it has been forming since 2013. This makes for a potential gain of 46% in price.
Now if we apply a Fibonacci extension to get our second target we take the low from 2002 to the high in 2011 and bring it back down to the low in 2015. This gives us an upside price target of $2681 an ounce. Based at the current price of gold we could see gold rally 106% over the next year or two.
Platinum is the second best metal for short-term and long-term gains from 2019 and beyond. Looking at the monthly chart you can see the previous high in 2008 was around $2300 based on the current price if we get a move to the previous high it provides a 176% potential gain. Also, notice how the price is testing the major support level forms in 2008 this could act as a very significant double bottom in price as well.
Using Fibonacci extensions we take 2001 low up to 2008 high and back down to the recent low in 2018 or 2009 both are the same price this projected price gives us an upside target of $2659 an ounce. Based on the current price of platinum that gives us the 221% potential gain over the next couple of years.
The number one precious metal to own in 2019 and beyond is silver. Based on the previous high in 2011 and looking at the current price of silver there is a potential upside gain of 226%. Also, notice how silver is putting in a potential double bottom from the 2015 lows it also goes all the way back on the chart to 2006 through 2010 as a key support zone. Much like platinum, silver is at support and could very easily start a new mega-rally at any time.
Using a Fibonacci extension, we can get our second target for silver based on 2002 low and 2011 high along with the 2015 bottom. This gives us a $59 price target. With the current price of silver trading at $15 an ounce, there is an upside target of 296% potential gain over the next couple of years when silver starts its next bull market. In fact, I recently purchased a couple more silver bars from SDBullion to add to my silver stacks because I like the potential.
In short, I feel precious metals should be a part of everyone’s portfolio as a long-term hedge and investment. I see precious metals as an insurance policy in case all hell breaks loose in the financial system and we need to fall back to something with physical value for a short period of time.
With that said, I am a firm believer that you should never overload in one particular investment or asset class. But I do feel certain metals should have a heavier weighting based on their current potential. The more upside potential the more of that metal you should own shares or physical bullion.
How should you invest and trade precious metals? There are a few ways to own metals as a trader and investor. You can own physical bullion rounds or bars and I don’t recommend coins simply because you pay a premium for a design and if metals ever do become a true currency the added value you paid for a design stamped in the metal will be tossed out the window and you lose that value as price will be based purely on weight.
A really simple way to trade and invest in metals are trading the ETFs for each bullion like Gold (GLD), Silver (SLV), Platinum (PLTM), and Palladium (PALL). Another and even more simple way is to own the GLTR fund which owns a basket of Gold, Silver, Platinum, and Pallium. Obviously owning precious metals mining stocks is another (GDX, GDXJ, JNUG, NUGT etc..)
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Technical Traders Ltd.
COUNTDOWN TO THE PRECIOUS METALS BREAKOUT RALLY
March 14, 2019
If you have been following our research over the past few months, you already know that we’ve called just about every major move in Gold over the past 14+ months. Recently, we called for Gold to rally to $1300 area, establish a minor peak, stall and retrace back to setup a momentum base pattern. We predicted this move to take place back in January 2019 – nearly 30+ days before it happened.
Now, we are publishing this research post to alert you that we are about 15~30 days away from the momentum base setup in Gold which will likely mirror in Silver. Thus, we have about 20+ days to look for and target entry opportunities in both Gold and Silver before this momentum bottom/base sets up.
This Monthly Gold chart, below, shows you the historic peaks that make up a current resistance level near 1370. This level is critical in understanding how the momentum base and following breakout will occur. This resistance level must be broken before the upside rally can continue above $1400, then $1500. Ultimately, the momentum base we are expecting for form before April 21 is the “last base” to setup before a much bigger upside price move takes place. In other words, pay attention over the next 30 days before this move happens.
This next Monthly Silver chart is the real gem of the precious metals world. The upside potential for Silver is actually much bigger than Gold currently. Any breakout move will likely see Silver push well above $30 per ounce and we just need to watch the $18.90 level for signs the breakout is beginning. Silver will follow a similar basing patter as Gold. We expect only about 30 days of buying opportunity left before this basing pattern is completed. Again, watch the April 21 date as the key date for the breakout move to begin.
Palladium has reached our initial Fibonacci upside price targets. We expect price to consolidated and potentially rotate near the $1500 price level. Ideally, price could fall below the $1300 price level and target the $1100 area before finding any real support. As long as industrial demand continues for Palladium, we expect to see continued upside price activity over the long run. Right now, we are expecting a price contraction as global industrial demand may falter a bit.
Please consider the research we are presenting to you today. Our predictive modeling systems have been calling the metals markets quite accurately over the past 14+ months. If our prediction of a momentum base on or near April 21 is correct, then we should begin to see an incredible upside price swing in Gold and Silver shortly after this date. You won’t want to miss this one – trust us. There will be time to catch this move when it starts – it could be an extended upside move. Pay attention and put April 21 on your calendar now.
If you like our research and our level of insight into the markets, then take a minute to visit our site to learn how we help our clients find and execute for success. We’ve been calling these market moves almost perfectly over the past 18+ months. Learn how our research team can help you stay ahead of these swings in price and find new opportunities for skilled traders. Take a minute to see how we can help you find and execute better trades by visiting www.TheTechnicalTraders.com today.
Technical Traders Ltd.
In Part I of this report we talked about and showed you what commodities and transports where doing in relation to each other. Here in Part II, we show you in detail what we expect to take place.
This final chart highlights our Custom Smart Cash Index (in BLUE) as well as the CBOE Commodity Index pricing levels (in RED). This data goes all the way back to 2012 and highlights a number of key pricing rotations. First, we can see that Commodities have been decreasing in total value from 2012 till mid-2017. We can also identify a key support level that was established in the Commodities Index near the beginning of 2016 – coinciding just a month or so before the bottom in the Smart Cash Index.
We believe this Key Bottom in both the Commodities Index and the Smart Cash Index reflect a dramatic pricing shift that took place at that point in time. Although Commodities have yet to rally beyond upper high ranges, we can see the Smart Cash Index rallied to incredible new all-time highs. The rally that started near the end of 2016 in the Smart Cash Index was likely the result of a “Capital Shift” that we have discussed extensively in the past. With commodity prices staying historically low and an increase in economic optimism, capital shifted away from “commodity-based sectors” and into “technology and biotech sectors”. Now, it appears this rally has run its course and a new capital shift is taking place.
Until Commodities begin to break out of the downward price channels we’ve highlighted on this last chart, global capital will be searching for two primary objectives; safety and hedged returns. By this, we mean to say that global capital and investment will be seeking out strong Blue Chip and Mid-Cap performers that can produce safety in growth, dividends and hedge against currency swings or further eroding commodity price levels. Think of this as a move to “key elements supporting the global economies”.
Heavy equipment, support services, and retailers, tool suppliers, and mid-level equipment suppliers, transportation services for these items and the repair parts and services to keep these tools running efficiently. Human services, labor, labor services, medical services, and entertainment services are likely to do well over the next 12~24 months. In an economy where commodity prices are relatively low and Transportation and Capital is flowing quite well, one could easily identify that Capital will seek out and identify the strongest opportunity for safety and growth as sectors continue to shift. After a massive rally in Technology and Bio-Tech, we believe a continued shift towards Blue Chips and Mid-Caps is taking place right now. Technology and Bio-Tech will likely find some support in the near future and become “opportunistic investments” eventually. But right now, we believe global investors are focusing on different targets to hedge the risks that are associated with certain technology stocks.
In closing, our research highlights that Commodities are not increasing as one would expect in an expanding global market/economy. We believe this is one core factor that will continue to drive a “capital shift” toward opportunity and performance in the Blue Chips and Mid-Caps. Global investors will re-enter the Technology and Biotech sectors when pricing levels become more opportunistic – at some point in the future. This means we have a very strong likelihood of the US and global Blue Chips, Banks, Industrial Supply, Basic Materials and Human Services (Entertainment, basic human essentials, regional human services, and utilities) will continue to perform well.
The US and the global economy is growing, just not as one would expect in a “total growth” environment. We believe the global economy has shifted to support “fundamental growth elements” that are related more closely to the types of industry and market sectors that support the fundamental growth components. We’ve discussed our theory that the global economies operate in a “growth or protection mode” many times before. We believe the current global economic stance is more in tune with “moderate growth while still being overly protective”. Watch Commodities and the Transportation Index for signs of when the global economy enters a larger growth phase and when more opportunity for a broader capital shift will take place.
This concludes this two-part series and how we identify market opportunities for us to trade. Analysis like this has allowed us to generate substantial profits in the past 30 days with UGAZ 30%, NIO 21.6%, ROKU 18%, GDXJ 10.5%.
If you want to learn how we can help you find success throughout this shifting market and throughout 2019 and beyond, then visit www.TheTechnicalTraders.com
Technical Traders Ltd.
Chris Vermeulen, Founder of The Technical Traders shares his thoughts on the recent pullback in gold. There is a debate over sentiment (which remains strong) vs momentum (which is negative) and which one will carry the market in the short term. We also look at the USD and the tech sector in terms of just how much more they can run.
Our ongoing efforts to dissect these markets and to help educated and inform traders has led us on an exploration path into the general market activities of two leading market indicators; Commodity prices and Transportation Prices. These two core elements of any regional or global economy are usually about 3~6 months ahead of the general markets. When viewing the Transportation Index, remember that transportation is key to any growing economy and a healthy economy. When an economy is doing well, the transportation sector will be busy shipping and delivering consumer product and staples as well as manufacturing equipment and supplies. When viewing the Commodity Index, remember the Supply and Demand equation where greater demand for commodities needed to manufacture, create, deliver or sell a product will drive prices higher as supply remains relatively constant, prices will increase.
Therefore, the theory of today’s research post is “are Transportation and Commodity prices telling us anything important about the future stock market valuations?”. Let’s get into the research.
First, the NASDAQ Transportation Index is painting a very clear picture that the upside price move starting near the end of 2016 drove prices well above historical normal ranges. Even today, we are well above historical ranges originating from the lows in 1998 and including the range expansion from the highs of 2007 to the lows of 2009. Given the premise that the Transportation Index would be highlighting increased economic activities across the planet and particularly those of more mature economies, one should expect that global trade/economic activity should be near all-time highs.
We would like to point out a defined upward price slope, highlighted by the RED LINE on this chart. We believe any potential downside price swing will find clear support near the $5025 level (the first upper range level from historic deviation ranges) or near $4690 (the RED LINE support channel).
In order to further our research, we’ll take a look at our “Custom Smart Cash Index” which highlights a broad range of global market indexes and weights them in a US Dollar basis. Obviously, the results of this Smart Cash Index is designed to highlight the total global valuation levels of a variety of mature economies/markets. We can easily see the volatility range established by the concerns prior to the 2016 US Presidential Elections created a very deep volatility range. We believe this is important because it establishes a “relative high point” and a “relative low point” that reflects human psychology and expectations. In other words, we believe the high point in early 2015 reflects an optimistic investor sentiment and the low point in early 2016 reflects a pessimistic investor sentiment.
This range can help us determine if current Smart Cash valuations are reflecting optimistic or pessimistic expectations by determining if the current price is near the lower areas of this range or the upper areas of this range.
Currently, the Smart Cash Index is moving higher after reaching an ultimate low point near December 24, 2018. This would indicate that optimism is increasing in the global markets. Additionally, The Smart Cash Index has breached a downward sloping price channel, drawn in BLACK. We believe continued optimism will drive global market valuations higher over time. Yet, we believe numerous 4~7%+ price rotations will occur in the US Stock Market as the total valuations continue to rise over the next 12~24 months.
What we would expect to find to help confirm our analysis is the price levels of general commodities would be increased to match the renewed optimism we believe is growing in the global markets. Obviously, if the global economies are doing well and trade/sales are increasing, then we would expect core commodity levels to increase as demand stays strong which we have seen this happen time and time again during economic cycles.
This concludes PART I and how we identify market opportunities for us to trade. Analysis like this has allowed us to generate substantial profits in the past 30 days with UGAZ 30%, NIO 21.6%, ROKU 18%, GDXJ 10.5%. IF you want to know our conclusion on what commodities and transports are telling us then visit our website to read PART II in the next 24 hours.
If you want to learn how we can help you find success throughout this shifting market and throughout 2019 and beyond, then visit www.TheTechnicalTraders.com to learn how we help our members create success.
Technical Traders Ltd.
Posted Mar 3, 2019
The continued rally in Palladium has prompted speculation that Platinum, Gold, and Silver will follow this trend upwards with renewed buying pressure. The one thing that many people are not considering is that Palladium is an industrial use component for many manufacturing sectors – specifically the automotive sector. As traders, we must understand that a rise in global demand for autos will increase the global demand for Palladium goes beyond traditional safe-haven demands for other metals like Platinum, Gold, and Silver.
The one key aspect of the Palladium demand cycle that we feel is critical is the increase in global demand for new cars and trucks as well as the continued global push to reduce carbon emissions and pollution.
The graph, below, illustrates the dramatically increased demand throughout much of the developed nations of the world. From 2003 to 2015, US demand for autos rose by more than 330% - from about 2.3 million units to over 6.5 million units. Over that same period, demand for autos in Asia more than doubled from 10 million units to nearly 26 million units annually. Within this data, we can see that US and Asian demand has continued to increase from the low 2008~09 levels. We believe this is the real reason Palladium rocketed higher over the past ten years.
(Click on images to enlarge)
The reality is that Palladium is used in many common and essential every-day components of our lives. We already know that Palladium is used heavily within the Automotive and transportation sectors, but did you know it is also extensively used in these following sectors?
_ Catalytic Converters For Automobiles
_ Synthetic Biology Catalyst
_ Hydrogen Storage
_ Long Lasting Photograph
_ Blood Sugar Test Strips
_ Surgical Instruments
_ Carbon Monoxide Detectors
When we stop to consider how many every-day components of our lives include some type of, demand for and use of a product that is likely to include Palladium and with world population growing it makes logical sense to see this growth. Pretty much every key aspect of our lives involves something that includes Palladium as a core element.
Therefore, we must understand that Palladium is a component of manufacturing that is included in much of the automobile, technology, medical services/components, jewelry, and daily use products of nearly all the developed nations.
Steady Technology Growth = Palladium Demand
One of the biggest drivers of increased demand for Palladium has been the increased demand for technology of all types throughout the US, Asia/China and Europe. Over the past 10+ years, the demand for tablets, touch-screen devices, advanced technology and much more has driven a huge demand for Palladium vs. other metals.
The Technical Analysis Price Outlook
As a technical analyst, I focus mainly on the price charts to know where price is most likely to move next. But, knowing and understanding the fundamentals can significantly help in determining the type of price movement I should expect when price reverses.
Both Palladium and Platinum have VERY different looking chart patterns and this comparison between the two I think paints a clear image of what is likely to happen next based on my analysis.
The monthly Palladium chart below shows repeated blow off topping formations which also match Fibonacci price targets and pullback levels. The price pattern and Fibonacci targets are two of my most used analysis types for trading.
There is no doubt money had been flowing into Palladium, and it has all the attention with traders/investors in what I feel is a silent bull market. But, the price is now reaching a Fibonacci price target and near vertical move up, and that to me screams PULLBACK.
Now take a look the monthly chart for Platinum in the same time frame. There had been a lack of interest in this safe-haven metal and price had faded back down to a long term support zone.
This to me could be the next shining metal and could take the spotlight or have a silent bull market most never notice. It just may outperform gold, silver, and palladium in 2019.
In short, what is hot now will eventually be replaced with the next best opportunity for investors to place their money for continued growth like in Platinum.
Based on the growing demand/need for palladium I only see a somewhat minor pullback/correction in price this year before it possibly continues higher. But, keep in mind, if/when a bear market comes in stocks and we have an economic downturn expect all metals to correct in a big way.
To quickly touch on gold, silver, and miners, I have a different outlook on how to trade those. I also specialize trading momentum stocks and leveraged ETS which I recently closed out winners with 30%, 17.7%, 13%, and 10.5% so be sure to visit my trade alert website for more details.
Disclaimer: This material should not be considered investment advice. Technical Traders Ltd. and its staff are not registered investment advisors. Under no circumstances should any content from this website, articles, videos, seminars or emails from Technical Traders Ltd. or its affiliates be used or interpreted as a recommendation to buy or sell any type of security or commodity contract. Our advice is not tailored to the needs of any subscriber we advise that you talk with your investment advisor before making trading decisions. This information is for educational purposes only.