Market Screams Warning: Chaos Approaches As Final Rally Dies | Chris Vermeulen
Summary
Gold Market Insight: Gold is experiencing a significant upward trend, signaling potential economic or geopolitical turmoil. It has reached nearly $3,800 an ounce, with expectations to hit $4,100, driven by strong demand for physical metals.
Stock Market Analysis: The stock market is described as "frothy," with many stocks hitting resistance levels. Jerome Powell's comments on high valuations have led to some market pullback, indicating a need for caution.
Investment Strategy: Chris Vermeulen emphasizes the importance of understanding market sentiment and using technical indicators, such as the FOMO indicator, to navigate short-term market movements and avoid emotional trading decisions.
Bitcoin and Cryptocurrency: Bitcoin has lost its appeal compared to gold and is not performing as a "digital gold." Institutional and retail interest in crypto remains, but gold is currently seen as a safer investment.
Market Sentiment and Indicators: The low VIX and high call option activity suggest a contrarian view, indicating potential short-term market weakness. Investors are advised to be cautious of a possible market correction.
Precious Metals Outlook: Gold and silver are expected to have more upside potential compared to equities, with gold being a less volatile choice. The current market environment favors precious metals over stocks.
Investment Approach: Chris Vermeulen advocates for a strategy of asset rotation, focusing on ETFs and moving between stocks, bonds, and cash based on market trends to maximize returns and minimize risk.
Market Dynamics: The discussion highlights the importance of monitoring market cycles, with the current phase characterized by innovation, particularly AI, driving tech stocks, but also signaling a potential market top.
Transcript
Gold is telling us something bad is likely to happen in in in in the world, the economy or something is going to happen. You don't want to fight this trend. It is clearly up. Bitcoin, it's really lost its its luster here. Majority of stocks are slamming into resistance. That's usually a warning sign. The VIX is trading very low. When the VIX is low, it's time to go. That's kind of where where gold is headed. I think we're going to see it potentially could actually blow past it. Christopher Mood is back. He's the uh chief market strategist at the technicaltraders.com and uh markets are frothy in his words. He told me uh even Jerome Powell, I'll show you what Powell said in just a minute. Um and uh said that this is not a very good valuation for stock markets. What's next? We'll talk about the stock markets. We'll talk about gold. We'll talk about gold miners. We'll talk about Bitcoin. Chris, welcome back. Hey, thanks for having me, David. Always a pleasure. Jerome Powell at a speech in Rhode Island said that stocks are uh fairly highly valued. Um I'm just going to leave it at that. Do you agree? Uh yeah, but I think they've been like that for a long time. I I mean I don't know how much people I don't think much weight really goes into what Jerome Powell says when it comes to probably trying to time the market or or something like that. But it definitely took the wind out of the sales a little bit. We saw yesterday a little bit of selling step in as the you know midday yesterday and it's carrying over so it has a little bit of waiting but overall the market was overdone yesterday uh in terms of kind of short-term bullishness in the market and if we look at the charts there's some interesting indicators and tools that give us insight as to short-term analysis of of the markets and and so if we were to look at my charts here real quick this is the spy um and what is interesting here yesterday is I have this red indicator. Now, this red indicator here is our FOMO indicator. This tells us when people feel like they're missing out in the stock market or in an in general, investors feel like they're missing out. The stock market has been running week after week. Uh precious metal space is screaming higher, leading the way. And of course, there's certain thresholds. Things finally hit yesterday. This is on a 30inut chart. This is a very powerful tool, though. When this indicator hits this above this blue line, this is telling us people have extreme FOMO. It means they they are jumping into the market. They can't take the pain anymore. They either want more of more stocks or precious metals or they're not in and they're getting left behind and they're just like, I have to get in. And I I did a little tweet there yesterday talking about how the market was about to go off a little bit of a cliff here and sell off just because we hit this threshold. This is a really critical threshold only short-term. This is only for a couple of days and and we've seen the market pull back. And this is what people need to understand too is pretty much all the markets are related in a way. And when the broad market, David, hits an extreme level of of sentiment, which is either panic selling or FOMO, fear of missing out, it really echoes through and moves a lot of different things. So, we can see the stock market sold off. This is the same with the Russell 2000, the NASDAQ, and all of those things. If we look at the uh price of gold, we can use the GLD ETF. We saw gold also move down. If we look at gold miners, they also have sold off from these levels. And so this is like one of the key things that I you and I always touch on or that I try to touch on is like if you can understand the sentiment, the money flows in and out of the US stock market, more so the S&P 500, and have these little tools to get a read on investors. It's almost like you're playing poker with players and you get to look at their hand. You know what they're thinking and what they're kind of doing and understanding the overall es and flows in and out of the stock market will move all these asset classes. So, uh these little tools are really handy and of course this coincided I think with the comment yesterday with Jerome Powell and it it leads into kind of this selling but the markets are moving very very nicely across the board. Doesn't matter if it's it's gold miners going from a little oversold dip and then hitting this FOMO kind of short-term top or if we, you know, we go to the S&P 500 or the NASDAQ for that matter, it's doing pretty much the same thing. When we zoom out, we can see the markets hitting oversold levels. They get bought up and then they go into a a short-term top. So, uh, in the grand scheme of things, uh, the market needs a little bit of a pause and pullback and that's what it started and that's all it is. The trend is still up. We need to let the market just take a breather before potentially it pushes uh for another leg higher. This is an interesting post that I saw on Reddit. Um and this was dated a couple months ago. The research was from last year. I'll just share this with you. So um I haven't verified the numbers myself. So I'm not saying this is absolute truth. I'm just pointing this out that someone has looked into this. Apparently the S&P has spent about 44% of trading days within 5% of all-time highs. Um so this is um a chart or a table showing what percentage of the time it's spent near all-time highs. So at all-time highs is 7% uh and then 12% between 0 to 1% 1 to 2% 3 to 4. So if you tally from at all-time highs to about 5% it supposedly adds up to nearly 40%. Yeah, something like that. So I mean that's a pretty incredible number when you think about it. um almost a fourth of the time since 1952, the S&P has been trading near its so-called all-time highs at the time. So, the the grander question is, again, I haven't verified the math. Could be lower, could be higher. The the bigger question is um does it really matter when something is trading near all-time highs? Should we should we actually be worried? Another another way to look at it is if something is at all-time highs, why would you want to sell it, right? Because yeah, if definitionally speaking, if something is an all-time high, you know, uh the previous day was the all-time high, so it's going up. Yeah. So, you make a really good point. So, I I was speaking to an investor yesterday and um well, to answer your question, you know, if something's at an all-time high, you really shouldn't be looking to sell it. Uh simply because it has no overhead resistance. everybody's winning on the trade and um really there's going to be minor pauses and pullbacks which is nothing more than little bouts of people saying you know what I'm going to lock in some profits here and when some people start to lock in profits and there's a little bit of weakness on the chart other people might say well I'm going to lock in some too so you should you know you know if the trend is up you should not really be looking to get out of it or to pick a top uh you really want to let that trend mature and all-time highs is really the best spot to be because there aren't any overhead resistance levels, you know, pockets of shares that people bought previously saying, "Hey, if it gets back up to this level, I'm going to sell it and get out at break even and move on." Um, all-time highs is is a great problem. So, um, yeah, I think I think, you know, you just need to stick with the underlying trend and and continue to ride this market until proven that it has changed direction. I want to come back to the S&P 500 in just a few minutes and get your ultimate uh outlook for I guess uh the rest of the year given the recent moves and then um levels to watch for. But let's switch over to gold for now before we come back to the S&P. So stay tuned for Chris's uh prediction for where stocks are headed from here. Uh gold is another asset that's also hitting all-time highs. In fact, it's been going up so dramatically that a lot of people in the gold space I've been talking to are quote unquote a little frightened at how fast it's moved. Almost everyone pretty much almost, no, not pretty much. Everybody who's been bullish on gold has had their expectations beaten this year with gold at almost $3,800 an ounce. We're looking at 3773 right now as of um just shortly afternoon Eastern time. It's um it's a pretty incredible price, especially considering how fast it's moved in such short an amount of time. The GDX, the gold miners index, which we can talk about in just a minute, is up 20% in just a month. So, I think it's up more than 90% year to date. Yeah. I'll let you comment on uh whether or not this is just FOMO buying at this point. And again, all-time highs, why should we be selling the top? I'll let you answer that. Sure. Yeah. Well, there there there's definitely been a very nice run. I mean, just looking at the gold chart of this this last consolidation and and then this this run up to the this bull flag pattern you using technical analysis, Fibonacci extension, gold has had a a perfect move so far. So, just based on the way the universe works using Fibonacci sequence, we have a move up, we have a move down, and based on Fibonacci sequence, we should expect price to run up to the 618. This is called the golden ratio. If you don't know much about Fibonacci, go look it up. It is extremely powerful. And my general rule is if p if price pauses at the 618 level, then we almost always go up to the 100% measured move afterwards. So I have about 4,100 as the next upside target for gold. Uh we've had this nice run. You and I actually talked about this level last time we were on. And uh and that's kind of where where gold is headed. I think we're going to see it potentially hit 41. it could actually blow past it. But you make a really good point, David, that you know, we have seen this massive move in the precious metal space. And the monthly chart gives us a really good view of just how much this thing has screamed higher and how much gold is telling us something bad is likely to happen in in in the world, the economy, or something is going to happen. People are moving more so, you know, they're kind of moving away from the stock market even though the market's going to all-time highs. Um, we're definitely seeing the majority of money moving into physical gold. Uh, Ray Dio was on Diary of a CEO and he was talking about there's like five forces and this 80-year cycle that's at play and we're coming to this major turning point. We've got internal conflict. We got the left fighting the right in extreme ways. Um, we've got people not trusting the systems anymore that the government's protecting them. Uh, we've got currency problems. So gold is is a good representation that we're about to go through this huge life cycle and it's telling us, you know, physical metals is is the place to be. We're in that perfect storm for for for metals. But we do need to know that when things go parabolic, as you said, and they start to shoot higher, it can end very abruptly and it it it might have a big pullback. And a good view of this, we we can come back to this chart after if we want, but look at GDX. Look at the large cap gold miners. This is called a parabolic move. it is just going straight up. Uh if we look at if we look at silver miners, uh we have the monthly chart, they're shooting straight up. And if you notice what happens after every straight up move, usually it ends pretty abruptly. The question is when is it topping these things are at all-time highs. There's no need to get out yet, but you need to be mentally prepared that hey, if this does turn, it is kind of a crowded play now that people could unload and exit very quickly and create a very sharp drop. So, this is like the the bit of the, you know, the warning sign that when things go straight up and like I have this huge wave right now of people emailing us and and talking about they have FOMO. They want in. They're asking me what stocks and what precious metal ETFs can they buy to take advantage of this. And really, those are the people who aren't in and now they're they're willing to pay a premium. They're willing to pay nosebleleed pricing. And usually, that's a sign we're close to a top. And if I say anything negative on the precious metal space, like we might be coming into a little bit of a blowoff top here, I'm going to get my uh you know, my head ripped off in the comments, which is fine. But that's that's one of the indicators that everybody says gold is going to the moon. This is totally different than last time. And every time it is a bit different than last time, but uh the signs are here. When you look at price action, um you don't want to fight this trend. It is clearly up. But this type of move usually ends in a very abrupt reversal in a very long red candle and catches a lot of people offguard. So, you know, doesn't matter how you look at the precious metal space, uh, money is dumping in. And one other quick aspect here is platinum and platium have both exploded. We have platinum taking off and if we look at platium ETF, these are just the ETFs on them. Um, they have really popped and taken off in the last few days. um palladium not quite as much, but everybody's just moving into all things precious metal right now. They don't care and they're piling in and you know, you just have to be aware. It feels a bit little little crowded of a play. A pause or pullback depending on how it it does that could be a very bullish sign. It could be an opportunity to get in or add more before it goes higher in the precious metal space. But if it's a reversal type of candle or pattern, uh, you know, you might want to buckle up and and, you know, protect some profits because it might actually have a bit of a precipitous unwinding event as well. Crypto has been heating up all summer. Bitcoin has continuously surpassed new all-time highs while Ethereum gained more than 50% in just a few weeks since the beginning of the summer. Is it altcoin season? What's going on? 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Go to the link in the description or scan the QR code here to learn more today. Uh Chris, the notion that something that has gone parabolic uh usually goes straight down. Um is that always true? Can we think of cases in which it goes parabolic and just stays there consolidating for quite some time before any movement is realized? Yeah, it can. It it could go, you know, very parabolic and then kind of trade sideways for for a while and build a launch pad. And that that's a good thing. If it can do that, that's great. But typically a parabolic move usually represents whoever is going to get into that asset has got sucked in. They they got in because of um fear of missing out, greed. They want to get in. They want to catch it. Usually the parabolic moves lure everyone in. And so there aren't a lot of buyer. When it does start to reverse down, everybody who's going to get into it has already got in. So it's really just left with all those people now worried they're going to lose money if they hold on to it. It can hold its ground. It It can, but that generally ends in a pretty strong kind of reverse to the downside. Just on the GDX going parabolic. I was just attending a uh gold mining conference in Colorado uh two weeks ago and um I asked all the miners that I interview there, how's M&A activity? How's finance activity now that your stock has pretty much gone parabolic this year? Have things picked up on the financing front? And the answer is yes, just a little bit. And it's just interesting how there's a big disconnect between the valuations and stock prices of these companies versus actually what's going on uh on the ground. Their drilling activity is still resuming. I mean, it it's it's not we haven't we're not seeing explosion of discovery, new discoveries because of these valuations. We're not seeing an explosion of new M&A activity. There was a big um merger between Anglo and um Anglo-American and Tech Resources. Uh that was a major merger announcement uh two weeks ago. But um on the junior front uh projects are just being picked up. It's not you know activity isn't super high. So what does that tell you when uh institutional investors are just starting to look at the space now at these valuations? according to the people I've talked to, uh, that finance activity is just starting to pick up a little bit now. That M&A is just starting to pick up a little bit now. Um, and the the index has gone up nearly 100% year-to- date. Yeah, I think there's a couple things at play. Um, when you look at like private equity, you look at like um, venture capital money, man, that that's spigot shut off a few years ago. It just it just dried right up. investors are are worried to take on risk and there is this weird investment vibe that people are it's it's more difficult to raise money still right now and I think that's why a lot of these these potential mining stocks are are struggling they have been dormant for a long time um and we're not in an environment where money is just pouring into opportunities so there's still that the the investment v vibe is is still very conservative they don't really want to take much risk second I think the miners have exploded so fast and and have big gains that I think a lot of investors are like, "Well, I don't really want to invest right now because it feels like it's like fairly valued or high valued. They'd rather maybe get get into it after it's had like a pullback or something." So, they're like, "How much more upside is there?" If the prices have gone parabolic and they're all at resistance or just, you know, just poking into nominal new highs, it's, you know, savvy investors don't really want to invest after a massive rally. Like that's kind of when it comes to private equity company, they're not like individual investors who chase high prices. They generally are looking for opportunity and they don't really want to invest when they're like, well, I just doubled or tripled that into individual stock. I kind of don't feel like investing in it right now because I feel like I'm paying a premium, right? So, I think there's those two plays in the precious metal space kind of making it maybe difficult to raise some some capital. I know your uh strategy quite well after working with you for several years now, but for the people new to your work, uh you're not trying to chase a top or a bottom, right? That's not what you're trying to do. No, more more or less I I try to identify trends uh in the market, substantial trends. We're looking for I always use the analogy like I look at the stock market like the ocean. If we if we if we look at a long-term um this is a weekly chart of the S&P 500, you need to know a couple things from a long-term investor standpoint. You need to know are we in a bull market phase, the stock market is going up or are we in a bearish environment where the stock market is going down. So there's a time to own stocks and there's a time not to own stocks and to move somewhere else. And I use a strategy called asset revesting which is we reinvest our capital into whichever asset is favorable. And so you know we've had a series of these bull and bare market phases and we're back into a bullish environment. So you need to know if the tide is going up or down. That is number one. Number two is if you go and you look at the stock market from a a daily chart, this is the QQQ, you need a strategy that catches these waves through the markets. And I like to think like we kind of surf the markets. Every year there's about 5 to 12 waves that that roll through this bond market, stocks, and various assets. And we want to know when a wave is ending based on technicals and money flow. We want to know when a new wave is starting. And so we're able to just move in and out of the asset classes. We exit the QQQ. We move into a different asset to to grow our capital as the stock market falls. And then we can reinvest back into the stock market. And we can play these these waves in the market. And so that's what I do. I focus on ETFs. We have 5 to 12 trades a year. We're just rotating from stocks, bonds, currency, cash, uh, and back and forth just whichever one is kind of moving. And when you go back to 2022, the stock market fell over 20%. Uh, you know, the the US dollar ETF rallied 17%. And, you know, you want to move to an asset that's going up. Investors, you shouldn't be holding things going down. So, that's what I do. We rotate through the markets. Uh, we play these these unique market scenarios. And, you know, we're getting to this level in in the stock market right now that this is this is earlier this year, just before the tariff selloff in the NASDAQ. We have this unique market sentiment setup. And this color coding here is using a bunch of different technicals and and u uh cycles and money flows. We have a very similar chart pattern unfolding right here that is telling us that we're potentially getting close to a a bigger pullback. There's a big disconnect going on in the stock market. And so I'm very cautious here of what we're going to do. We did lock in some profits on our on our trade last week. Uh so it doesn't matter what happens now. uh we are long stocks and gold and those are the the plays but we just need to be aware that these markets will rotate. We have these waves and you can take full advantage of this market if you understand how to identify these and it's the same with gold. You can move in and out of gold or the dollar and um I think gold has got some pretty good potential to the upside still. So let's talk about that. How do we know that this is still a bull market? I think that's a common question. So let's take gold for example to illustrate this point. Gold's already up 100% since 2023. So in less than 2 years it's doubled. How do we know at this point that it's in still a bull market like you said more room to climb or we've reached sort of a pivotal inflection point? Do you look at momentum indicators? Do you look at the pace at which it's growing? Do you look at um other, you know, other other asset classes that may or may not move alongside gold as an indicator? What what do you do to make that assessment? Yeah. Well, there's a there's a few layers in there. The the the number one thing is price action. Is it still trending higher? Uh more or less, you know, I don't have the the the 150day moving average, but I can actually convert this one over to one. So, if you were to take a look at like a 150day moving average, generally if price is above the 150day, which is the blue line, and the blue line is sloping up, you're generally in a bull market environment. So, you know, you need a lot of damage in gold. It needs to trade sideways for a while. Just on that note, I thought that maybe I'm reading this wrong, but I thought that whenever something is trading above the 150day moving average um or even the 200 day moving average, it's usually a sign that you should be selling it because it's um it's it's just overbought. Is that not the right way to look at it? No, I don't I don't think so. Um, generally the 150day moving average is telling us the long-term cycle, the long-term money flows. You want price above it. Um, when price is above it, it means you're in a strong long-term uptrend. There's a big tailwind, and along the way, there'll be a series of of rallies and pauses where it rallies up, it gets a little too far above the 150day. It'll take a bit of a breather, it'll rally back up, it'll take a breather, it'll rally. So, you want price above the 150day moving average. In fact, you want it really above the 50-day as well um in the short term. But as an investor, the key is to identify on on how long of a picture you you want to focus on is when do you decide it is in a new downtrend and and to get out. Now, I think gold will have to would have to have a lot of damage uh to to kind of signal we're in a bare market is probably going to have to like you break below this level or break even below this level. before I'd say, hey, gold is put in a massive top uh if it sells off and puts in a a head and shoulders or a bearish pattern and then starts to break down. So, you you don't know a bull and bare market require a lot of time and a lot of price movement to really shift that trend. And I mean, I don't trade so much on the bull and bare market side because there's a lot of volatility in there. I focus on the shorter term daily chart and the 20-day moving average. Um, so the key though is just identify the price action. Is price making a series of on average higher highs and higher lows? And if it is, then it's in an uptrend. If it starts to make lower highs and lower lows, you know, lower highs and lower lows, then you're in a downtrend. Um, so price is the number one indicator to figure out which way it's going. And then you need position management. If it drops to a certain percentage, you should get out, protect your capital. Um, but really it comes down to price action. And you just have to decide like are you like a short-term swing trading strategy? Are you like a position trading strategy which could last a few months? Are you a long-term investor really going for that bull or bare market type of trends only? Right? I think the reason I asked that is because um so many people have told me that uh markets tend to revert to the mean. So the mean reversing theory and so when something's trading at above um the moving average the 100 day or 250 day or 200 day whatever the case may be for an extended period of time usually we're looking at some sort of mean reversion thereafter. Do you have any um thoughts on this? Does this theory have any credence in actual practice? Well I mean if something gets overextended too far away from a moving average usually it wants to pull back and revert back to the moving average. You can see like a good example is well the S&P 500 doing this right now, but the 20-day moving average, gold likes to move up the the 20-day moving average. Uh, a lot most assets do. There's a 20-day kind of cycle that goes in there. Look at the S&P 500 since the lows in April. It just bounces up the 20-day. So, this is kind of like the reversion to the mean. It it wants to just take a bit of a pause or breather, find some support near a moving average, and start to bounce higher. And gold has been doing that. When we look at the long-term picture chart of gold here, you can see that, you know, when it does get a little far away from the 150day moving average, it trades sideways for a while. So, the 150day can somewhat catch up and then it gets stretched a little too far away and then it takes a breather, lets the moving average, you know, it kind of it needs time to consolidate. Uh, and so it just kind of happens over and over again. This is very bullish price action. You want to see price rally, pause. These are a series of what are called bull flag patterns. They point to higher pricing. They give us upside targets. Um so just because it's above a moving average doesn't matter. It's maybe if it's too far. If you go back in time and say every time gold rallies, you know, roughly 15% from the that moving average, maybe it needs to revert to the mean. It needs to like let the moving average catch up. We could go back over here. Here's another, you know, 15 12%. um you know it has a multiple series as they move up the the values change but you kind of need these same these same levels right that's how I would look at it um this is another interesting chart that I saw floating around on Twitter um and we can verify this with uh our own charts here I'm just show my screen real quick this is just S&P 500 versus gold so it's we're talking about stocks and gold now so far since 2023 gold has been outperforming but in particular it started really outperforming this year. Now the question is what does it mean when you've got a bull market in stocks but at the same time gold traditionally seen as a less volatile safe haven asset is outperforming? It's not like the stock market is crashing and then gold's just flat and outperforming. That would kind of intuitively make sense, but gold is beating risks uh risk on right now. And if you take a look at um well, you can do this on your own screen as well, but if you take a look at um I'll just show you mine real quick cuz I have it up just comparing these two. Uh the last time gold spiked up was in 2020 2021. Um and if you just zoom in in that period, everything was going up at the same time. Stocks were going up, cryptos were exploding as you know. Um and the and between 2020 to um late 2021, you've got a period in which the S&P was up 40% and gold was up 20%. and not bad for gold, but still not outperforming um the equities index. But now the reverse is happening. And like I said, stocks aren't crashing. So what does this signal to you? What is the market trying to tell us? Yeah. So there's you and I have touched on this. Hopefully people can wrap their head around this chart. It's a little noisy. So the the this is a good example of kind of what you're talking about. 2007 the stock market topped. We saw the candlestick chart in the background. That's the S&P 500. Um, and I've I've drawn lines to where the stock market put in the top. Gold was screaming higher. And we have the stock market at all-time highs right now. Gold is screaming higher on our current chart where we are. Eventually, if the music does come to an end here and we see some type of reversal, some event hits and and we see it roll over, we could see the stock market sell off fairly abruptly, but gold can keep shooting higher. And that's why I really like gold is because for the first wave of massive selling of bad news, whatever is going to hit the market, gold is seen as that that safe haven place. So I think we still can see a big push up in gold, 4,100, maybe even 4,500 um uh for for gold. Um but I do think eventually we could see a very big market correction. And the green line on here is is the dollar. Of course, the dollar is trading, you know, at very big lows. It's it's very much hated. Uh it's the same where we are right now. We've got the dollar trading down. Nobody likes it. Everybody thinks it's going to be worthless. But I I I think we Somebody told me the other yesterday or this morning actually about uh you know I think the administration was talking about they gave like the green light for World War II which I'm I'm not caught up on that but they were saying how it could spark the dollar to do to become very strong and the dollar has put in a very strong bounce and rally especially if you're a Canadian investor. It's looking pretty pretty good for a Canadian investor that the dollar is going to strengthen, the Canadian dollar is going to weaken. So, you want to hold US dollars. But anyway, we could see in chaos in difficult times, the US dollar does tend to rally. The US is still a powerhouse and the dollar seems to shine when there is massive uncertainty. Um so I mean when you look at it in a nutshell when gold is outperforming just like you mentioned in fact our infographic shows here precious metals tend to perform the best right near a major stock market top and that's what we're seeing and even if we look at the business cycle which this is where I think we're coming into a big uh some type of weak economic cycle something I think is going to hit that that that causes a problem. We're in this innovation and adaptation phase. The innovation right now is AI and AI just happens to be the largest tech companies dragging the indices higher uh and and making it look like this market's really strong. And this usually happens just, you know, right near a major stock market top. And a good example of this, David, is if we take a look at um the IWM. If we take a look at the IWM, this is the small caps. They are testing and trading right up near all-time highs. We're putting in potentially a triple top for the majority of stocks. And this is why everybody's really bullish right now. They're piling into small and micro cap stocks, uh, trying to make as much money as they can. And people don't realize like every time we've gotten here, we've seen a huge sell-off. The other one is IWC, which are the micro caps, even more aggressive traders. uh it is coming right up into a significant resistance area from 2021 when everybody else was piling into all these to to make as much as they can. Like aggressive traders are moving into these. It's not a bad thing. I mean people want to move to where the money is, but we also need to know it is running into resistance. And if we look at the equal weighted S&P 500, which is the um that is the R RSP ETF. So, this is the S&P 500 without the big tech heavyweights. Uh, we're, you know, we're we're kind of pushing in. Let me just zoom out a bit here. We're we're pushing right back into these these highs that we saw just earlier this year this year. Let me just zoom in. And it's starting to look like it's stalling out. So, the majority of stocks are slamming into resistance and everyone is really bullish. They feel like the market's going to scream higher. Um, that's usually a warning sign. And and when we look at the VIX, the VIX is trading very low. I'll go back to uh the daily chart here. If we look at the VIX, when the VIX is low, it's time to go. There's not a lot of fear in the market. And the biggest thing right now is a short-term indicator is the put call ratio. Now, the put call ratio, this looks like a noisy, messy chart. People are like, how do you how do you even look at that? The key for this really is just to look at um the 5-day moving average. Whenever the 5day moving average gets down to this lower level and it's actually much lower than it typically typically gets, that's telling us a lot of people are buying call options. They are betting and using leverage for higher pricing. And that's what everybody's positioned for right now. It's a contrarian indicator. When everybody's long all the aggressive stuff now they're buying options on it, usually we're going to see some type of bit of a pullback. And that's what I think we started to see yesterday. I think we hit that FOMO extreme. Everybody just who couldn't handle missing out on the rally for metals and the stock market got in yesterday. And I think the big institutional players, they started to sell into it. They're like, "Okay, we just hit that threshold. Let's let's start to sell into these people who feel like they have to get in." And um these indicators tell us we should expect some short-term weakness uh in the market. So looking at uh the future for gold and stocks, you said that uh they both have some upside for now. which has more upside and we'll get your levels from here. Um, I think gold has more upside. Uh, believe it or not, the charts of silver and gold have roughly the same upside potential. So, I would naturally go say we'll trade gold because it has a higher probability of hitting it and it has less volatility, meaning you don't have to ride quite the roller coaster. Uh, which means you can put more money to work. Um, and um, you just you can make the same amount of money as silver, more or less. People don't want to hear that. They naturally think silver outperforms dramatically. But really this year, gold is only or silver's only outperformed gold really just like eight or nine%. And it has been a hell of a roller coaster ride if you hold silver. So gold to me has got the most. I think it's got 15 to maybe even 30% upside from where we are right now. The stock market, I think it might continue to grind a little higher if the big techs can keep dragging it up, but small caps, midcaps, uh more or less equal weighted stocks have all hit resistance. So, it needs to be the large tech that drag the markets higher. And, you know, they're not showing the the strongest kind of um sign right now. When we look at the MAGS ETF, um let me see here. MAG ETF is is clearly in an uptrend, but it is actually showing a little bit of of of weakness, short-term weakness that it might want to pull back a little bit. So, I think gold, physical gold or a physical gold ETF is the play. And um yeah, that's that's where the opportunity I think lies right now. Uh what are the uh just just on gold itself, what are the um critical levels we should be watching for? So below this level, uh if it breaks a certain floor, we're looking at maybe uh more downside action. And then um do we have a ceiling here? Yeah, the the the ceiling for gold, the next level is about 4,100 40 4,80 4,100. So that's kind of where we should be looking for that next upside target. If we if we look, it's about 910%. That's that's a Fibonacci measured move where it should run into a little bit of resistance. But what happens in this market environment which when we look at 200 um7 the comparison this is where gold could not only hit that target but blast past it another 15 20% or so. So I do think uh you know that I that is the gold target 4100 but we could have a parabolic move where more people pile in and it and it shoots higher and that'll be money probably flowing out of the stock market. will probably see stocks falling and that fuels gold even more because first of all gold's on fire. If the stock market starts to fall, people now don't have to split their money between stocks and gold. They're like, "Get me out of stocks and just I'll put it all in gold." So that first initial big bout of selling in the stock market, that fear generally shifts all that money and dumps it into gold. And that's what gives that final blowoff phase for gold that that's when you need to be aware we might see like a sharp reversal. But I still think there's quite a bit of upside in the precious metal space for gold, silver, and miners. I I don't think like I'm not saying it's topping right now. I'm just saying we're getting into this stage where it's very favorable. It could keep moving fast. Um but you just need to have a game plan for when we hit these capitulation levels. Um locking in some partial profits isn't a bad idea. I I'm just smiling because time flies. When I first started in this business a few years ago in 2020, I first started doing interviews. um 4,000 5,000 gold headlines were like seen as like clickbait, you know? I put that there to make people think, "Wow, that's a crazy title. I I should click on that." Now it's a 9% move from where we are today. Yeah. Time flies. And I remember people telling me, "Well, if gold goes to 5,000, it means we're all living in bunkers and we're all living on canned food and ammo and stuff. You stock up on guns." Um yes, there are wars going on in the world. Yes, people are suffering. But here in the west where we're broadcasting from, I'm not seeing any of that. It's just a natural progression of where financial markets have taken us. Yeah, I think there's enough chaos and instability around the world in countries right now. People are people are moving to a, you know, big solid investments, physical, get them, you know, reduce their exposure to the financial markets and um yeah. Okay. Uh let's move on to finally um well before we close off I want to touch on your S&P 500 targets. So let's do that. Sure. Okay. Same question that I asked you um about gold. I'll extend to stocks. So key levels to watch for. Yeah. When when we look at the equities market. So the S&P 500 for an upside target. I mean, if we were to look at big picture analysis, similar to um gold, if we were to look at the really big pictures, there's still quite a bit of potential upside on the S&P 500. Now, this is showing we could see this is the SPY ETF, which I probably should have used the uh the futures, but overall, if we were to just zoom in on the price action here, you can see there's an upside target around 680 SPY. So, this this target is showing us we've got about 3% upside. And this is based off the let me just get this back down here. This is based off a very significant low back in the 2022 kind of market bottom 2023 um little little pullback here. Based on this, there's about 3% upside, not a whole lot, which is why I like gold. If we take a look at um the QQQ, this one's kind of interesting, too. If we look at the QQQ for the same type of thing, we have the QQQ hitting resistance like a day ago, two days ago, hitting that 100% measured move. And as you know, uh, if you hit the 618 level and you have a pause and a hiccup for a while, you generally always go up and hit the 100% measured move. So, we've now just slammed into that. We had the FOMO indicator hit an extreme yesterday. The market literally pivoted within the hour and now we have some selling pressure going on. So this this is why I was saying the Magnificent 7 need to do some serious heavy more heavy lifting to drag these markets higher because everything is pretty much running out of steam into resistance. Small caps are at resistance already as I showed you in the micro caps. So, uh, you know, the S&P 500 has the upside, a little bit of upside, but the precious metal space is definitely, um, kind of the the play at this point. I think you still need to be long equities. We're long equities. We can still go higher, but you're asking for where the next upside targets are. Now, we need to see a little bit of a pause or pullback to kind of get a gauge of of where the next short-term move will be going forward. And, you know, you know, we wanted you wanted to touch on Bitcoin. We could touch on that real quick. It's really lost its its luster here. You know, is always talked about as being the digital gold and it is, you know, far from that at this point. It's really been going down as gold and the stock market has been going up. And I think Ethereum has taken over has taken a lot of the uh a lot of the money flow. And I think a lot of people who were in Bitcoin are reverting back to getting into gold, silver, and miners. They want to get into that space. Uh so overall, you know, I would just steer clear of Bitcoin temporarily. It's got a kind of an ugly chart at this point. I think the precious metal space is is still the, you know, is kind of the one shining right now. Okay, great. Uh I'll put the link down below so people can follow your work there and um just give us a synopsis of what we can find when we do go to that link. Sure. Yeah, if you uh go to my website, my whole focus is helping investors avoid big bare markets and to take advantage of of bull markets. And really, I just I just manage my own portfolio. I share my ETF trades. Again, there's 5 to 12 portfolio adjustments each year. We move in of stocks, bonds, currencies, or cash. We just rotate as I showed with the red and green chart um with our our signals on like on the stock market where we know when to get in, when to get out, and what asset to shuffle over to. And of course, you just copy my my trade signals. They're end of day. So when you get a signal, you get it at the end of the day. You have all night and all morning to get in. We we enter positions the next day at the opening bell. And I provide portfolio allocations, our stops, our targets. We walk through it every morning. I give a video update on what's going on so you you can navigate through these markets. And um we just consistently watch our our account move up and to the right. Doesn't matter if we have a, you know, 2008 bare market or financial crashes or COVID or the 2022. We're constantly only holding an asset going up or we're sitting in cash collecting interest until there is something worth holding. And it allows us to really get a a high annualized return, very little max draw down. We don't have to carry the risk of worrying about blowing up our retirement accounts or anything like that. And uh really, you're just copying the trades that I do. So I don't dish out trades to satisfy people. I literally just share the exact portfolio allocations and trades that I do and we trade together. So that's that's it in a nutshell. Excellent. Thank you very much, Chris. We'll put the links down below. Follow Chris there and uh we'll get you on in a couple weeks to give us another update soon. Plenty more volatility to talk about. Let's see where golden stocks and uh Bitcoin end up. We haven't talked about Bitcoin today. We'll do so next time. Thanks, Chris. Thanks, David. Take care. Thank you for watching. Don't forget to like and subscribe.
Market Screams Warning: Chaos Approaches As Final Rally Dies | Chris Vermeulen
Summary
Transcript
Gold is telling us something bad is likely to happen in in in in the world, the economy or something is going to happen. You don't want to fight this trend. It is clearly up. Bitcoin, it's really lost its its luster here. Majority of stocks are slamming into resistance. That's usually a warning sign. The VIX is trading very low. When the VIX is low, it's time to go. That's kind of where where gold is headed. I think we're going to see it potentially could actually blow past it. Christopher Mood is back. He's the uh chief market strategist at the technicaltraders.com and uh markets are frothy in his words. He told me uh even Jerome Powell, I'll show you what Powell said in just a minute. Um and uh said that this is not a very good valuation for stock markets. What's next? We'll talk about the stock markets. We'll talk about gold. We'll talk about gold miners. We'll talk about Bitcoin. Chris, welcome back. Hey, thanks for having me, David. Always a pleasure. Jerome Powell at a speech in Rhode Island said that stocks are uh fairly highly valued. Um I'm just going to leave it at that. Do you agree? Uh yeah, but I think they've been like that for a long time. I I mean I don't know how much people I don't think much weight really goes into what Jerome Powell says when it comes to probably trying to time the market or or something like that. But it definitely took the wind out of the sales a little bit. We saw yesterday a little bit of selling step in as the you know midday yesterday and it's carrying over so it has a little bit of waiting but overall the market was overdone yesterday uh in terms of kind of short-term bullishness in the market and if we look at the charts there's some interesting indicators and tools that give us insight as to short-term analysis of of the markets and and so if we were to look at my charts here real quick this is the spy um and what is interesting here yesterday is I have this red indicator. Now, this red indicator here is our FOMO indicator. This tells us when people feel like they're missing out in the stock market or in an in general, investors feel like they're missing out. The stock market has been running week after week. Uh precious metal space is screaming higher, leading the way. And of course, there's certain thresholds. Things finally hit yesterday. This is on a 30inut chart. This is a very powerful tool, though. When this indicator hits this above this blue line, this is telling us people have extreme FOMO. It means they they are jumping into the market. They can't take the pain anymore. They either want more of more stocks or precious metals or they're not in and they're getting left behind and they're just like, I have to get in. And I I did a little tweet there yesterday talking about how the market was about to go off a little bit of a cliff here and sell off just because we hit this threshold. This is a really critical threshold only short-term. This is only for a couple of days and and we've seen the market pull back. And this is what people need to understand too is pretty much all the markets are related in a way. And when the broad market, David, hits an extreme level of of sentiment, which is either panic selling or FOMO, fear of missing out, it really echoes through and moves a lot of different things. So, we can see the stock market sold off. This is the same with the Russell 2000, the NASDAQ, and all of those things. If we look at the uh price of gold, we can use the GLD ETF. We saw gold also move down. If we look at gold miners, they also have sold off from these levels. And so this is like one of the key things that I you and I always touch on or that I try to touch on is like if you can understand the sentiment, the money flows in and out of the US stock market, more so the S&P 500, and have these little tools to get a read on investors. It's almost like you're playing poker with players and you get to look at their hand. You know what they're thinking and what they're kind of doing and understanding the overall es and flows in and out of the stock market will move all these asset classes. So, uh these little tools are really handy and of course this coincided I think with the comment yesterday with Jerome Powell and it it leads into kind of this selling but the markets are moving very very nicely across the board. Doesn't matter if it's it's gold miners going from a little oversold dip and then hitting this FOMO kind of short-term top or if we, you know, we go to the S&P 500 or the NASDAQ for that matter, it's doing pretty much the same thing. When we zoom out, we can see the markets hitting oversold levels. They get bought up and then they go into a a short-term top. So, uh, in the grand scheme of things, uh, the market needs a little bit of a pause and pullback and that's what it started and that's all it is. The trend is still up. We need to let the market just take a breather before potentially it pushes uh for another leg higher. This is an interesting post that I saw on Reddit. Um and this was dated a couple months ago. The research was from last year. I'll just share this with you. So um I haven't verified the numbers myself. So I'm not saying this is absolute truth. I'm just pointing this out that someone has looked into this. Apparently the S&P has spent about 44% of trading days within 5% of all-time highs. Um so this is um a chart or a table showing what percentage of the time it's spent near all-time highs. So at all-time highs is 7% uh and then 12% between 0 to 1% 1 to 2% 3 to 4. So if you tally from at all-time highs to about 5% it supposedly adds up to nearly 40%. Yeah, something like that. So I mean that's a pretty incredible number when you think about it. um almost a fourth of the time since 1952, the S&P has been trading near its so-called all-time highs at the time. So, the the grander question is, again, I haven't verified the math. Could be lower, could be higher. The the bigger question is um does it really matter when something is trading near all-time highs? Should we should we actually be worried? Another another way to look at it is if something is at all-time highs, why would you want to sell it, right? Because yeah, if definitionally speaking, if something is an all-time high, you know, uh the previous day was the all-time high, so it's going up. Yeah. So, you make a really good point. So, I I was speaking to an investor yesterday and um well, to answer your question, you know, if something's at an all-time high, you really shouldn't be looking to sell it. Uh simply because it has no overhead resistance. everybody's winning on the trade and um really there's going to be minor pauses and pullbacks which is nothing more than little bouts of people saying you know what I'm going to lock in some profits here and when some people start to lock in profits and there's a little bit of weakness on the chart other people might say well I'm going to lock in some too so you should you know you know if the trend is up you should not really be looking to get out of it or to pick a top uh you really want to let that trend mature and all-time highs is really the best spot to be because there aren't any overhead resistance levels, you know, pockets of shares that people bought previously saying, "Hey, if it gets back up to this level, I'm going to sell it and get out at break even and move on." Um, all-time highs is is a great problem. So, um, yeah, I think I think, you know, you just need to stick with the underlying trend and and continue to ride this market until proven that it has changed direction. I want to come back to the S&P 500 in just a few minutes and get your ultimate uh outlook for I guess uh the rest of the year given the recent moves and then um levels to watch for. But let's switch over to gold for now before we come back to the S&P. So stay tuned for Chris's uh prediction for where stocks are headed from here. Uh gold is another asset that's also hitting all-time highs. In fact, it's been going up so dramatically that a lot of people in the gold space I've been talking to are quote unquote a little frightened at how fast it's moved. Almost everyone pretty much almost, no, not pretty much. Everybody who's been bullish on gold has had their expectations beaten this year with gold at almost $3,800 an ounce. We're looking at 3773 right now as of um just shortly afternoon Eastern time. It's um it's a pretty incredible price, especially considering how fast it's moved in such short an amount of time. The GDX, the gold miners index, which we can talk about in just a minute, is up 20% in just a month. So, I think it's up more than 90% year to date. Yeah. I'll let you comment on uh whether or not this is just FOMO buying at this point. And again, all-time highs, why should we be selling the top? I'll let you answer that. Sure. Yeah. Well, there there there's definitely been a very nice run. I mean, just looking at the gold chart of this this last consolidation and and then this this run up to the this bull flag pattern you using technical analysis, Fibonacci extension, gold has had a a perfect move so far. So, just based on the way the universe works using Fibonacci sequence, we have a move up, we have a move down, and based on Fibonacci sequence, we should expect price to run up to the 618. This is called the golden ratio. If you don't know much about Fibonacci, go look it up. It is extremely powerful. And my general rule is if p if price pauses at the 618 level, then we almost always go up to the 100% measured move afterwards. So I have about 4,100 as the next upside target for gold. Uh we've had this nice run. You and I actually talked about this level last time we were on. And uh and that's kind of where where gold is headed. I think we're going to see it potentially hit 41. it could actually blow past it. But you make a really good point, David, that you know, we have seen this massive move in the precious metal space. And the monthly chart gives us a really good view of just how much this thing has screamed higher and how much gold is telling us something bad is likely to happen in in in the world, the economy, or something is going to happen. People are moving more so, you know, they're kind of moving away from the stock market even though the market's going to all-time highs. Um, we're definitely seeing the majority of money moving into physical gold. Uh, Ray Dio was on Diary of a CEO and he was talking about there's like five forces and this 80-year cycle that's at play and we're coming to this major turning point. We've got internal conflict. We got the left fighting the right in extreme ways. Um, we've got people not trusting the systems anymore that the government's protecting them. Uh, we've got currency problems. So gold is is a good representation that we're about to go through this huge life cycle and it's telling us, you know, physical metals is is the place to be. We're in that perfect storm for for for metals. But we do need to know that when things go parabolic, as you said, and they start to shoot higher, it can end very abruptly and it it it might have a big pullback. And a good view of this, we we can come back to this chart after if we want, but look at GDX. Look at the large cap gold miners. This is called a parabolic move. it is just going straight up. Uh if we look at if we look at silver miners, uh we have the monthly chart, they're shooting straight up. And if you notice what happens after every straight up move, usually it ends pretty abruptly. The question is when is it topping these things are at all-time highs. There's no need to get out yet, but you need to be mentally prepared that hey, if this does turn, it is kind of a crowded play now that people could unload and exit very quickly and create a very sharp drop. So, this is like the the bit of the, you know, the warning sign that when things go straight up and like I have this huge wave right now of people emailing us and and talking about they have FOMO. They want in. They're asking me what stocks and what precious metal ETFs can they buy to take advantage of this. And really, those are the people who aren't in and now they're they're willing to pay a premium. They're willing to pay nosebleleed pricing. And usually, that's a sign we're close to a top. And if I say anything negative on the precious metal space, like we might be coming into a little bit of a blowoff top here, I'm going to get my uh you know, my head ripped off in the comments, which is fine. But that's that's one of the indicators that everybody says gold is going to the moon. This is totally different than last time. And every time it is a bit different than last time, but uh the signs are here. When you look at price action, um you don't want to fight this trend. It is clearly up. But this type of move usually ends in a very abrupt reversal in a very long red candle and catches a lot of people offguard. So, you know, doesn't matter how you look at the precious metal space, uh, money is dumping in. And one other quick aspect here is platinum and platium have both exploded. We have platinum taking off and if we look at platium ETF, these are just the ETFs on them. Um, they have really popped and taken off in the last few days. um palladium not quite as much, but everybody's just moving into all things precious metal right now. They don't care and they're piling in and you know, you just have to be aware. It feels a bit little little crowded of a play. A pause or pullback depending on how it it does that could be a very bullish sign. It could be an opportunity to get in or add more before it goes higher in the precious metal space. But if it's a reversal type of candle or pattern, uh, you know, you might want to buckle up and and, you know, protect some profits because it might actually have a bit of a precipitous unwinding event as well. Crypto has been heating up all summer. Bitcoin has continuously surpassed new all-time highs while Ethereum gained more than 50% in just a few weeks since the beginning of the summer. Is it altcoin season? What's going on? 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Go to the link in the description or scan the QR code here to learn more today. Uh Chris, the notion that something that has gone parabolic uh usually goes straight down. Um is that always true? Can we think of cases in which it goes parabolic and just stays there consolidating for quite some time before any movement is realized? Yeah, it can. It it could go, you know, very parabolic and then kind of trade sideways for for a while and build a launch pad. And that that's a good thing. If it can do that, that's great. But typically a parabolic move usually represents whoever is going to get into that asset has got sucked in. They they got in because of um fear of missing out, greed. They want to get in. They want to catch it. Usually the parabolic moves lure everyone in. And so there aren't a lot of buyer. When it does start to reverse down, everybody who's going to get into it has already got in. So it's really just left with all those people now worried they're going to lose money if they hold on to it. It can hold its ground. It It can, but that generally ends in a pretty strong kind of reverse to the downside. Just on the GDX going parabolic. I was just attending a uh gold mining conference in Colorado uh two weeks ago and um I asked all the miners that I interview there, how's M&A activity? How's finance activity now that your stock has pretty much gone parabolic this year? Have things picked up on the financing front? And the answer is yes, just a little bit. And it's just interesting how there's a big disconnect between the valuations and stock prices of these companies versus actually what's going on uh on the ground. Their drilling activity is still resuming. I mean, it it's it's not we haven't we're not seeing explosion of discovery, new discoveries because of these valuations. We're not seeing an explosion of new M&A activity. There was a big um merger between Anglo and um Anglo-American and Tech Resources. Uh that was a major merger announcement uh two weeks ago. But um on the junior front uh projects are just being picked up. It's not you know activity isn't super high. So what does that tell you when uh institutional investors are just starting to look at the space now at these valuations? according to the people I've talked to, uh, that finance activity is just starting to pick up a little bit now. That M&A is just starting to pick up a little bit now. Um, and the the index has gone up nearly 100% year-to- date. Yeah, I think there's a couple things at play. Um, when you look at like private equity, you look at like um, venture capital money, man, that that's spigot shut off a few years ago. It just it just dried right up. investors are are worried to take on risk and there is this weird investment vibe that people are it's it's more difficult to raise money still right now and I think that's why a lot of these these potential mining stocks are are struggling they have been dormant for a long time um and we're not in an environment where money is just pouring into opportunities so there's still that the the investment v vibe is is still very conservative they don't really want to take much risk second I think the miners have exploded so fast and and have big gains that I think a lot of investors are like, "Well, I don't really want to invest right now because it feels like it's like fairly valued or high valued. They'd rather maybe get get into it after it's had like a pullback or something." So, they're like, "How much more upside is there?" If the prices have gone parabolic and they're all at resistance or just, you know, just poking into nominal new highs, it's, you know, savvy investors don't really want to invest after a massive rally. Like that's kind of when it comes to private equity company, they're not like individual investors who chase high prices. They generally are looking for opportunity and they don't really want to invest when they're like, well, I just doubled or tripled that into individual stock. I kind of don't feel like investing in it right now because I feel like I'm paying a premium, right? So, I think there's those two plays in the precious metal space kind of making it maybe difficult to raise some some capital. I know your uh strategy quite well after working with you for several years now, but for the people new to your work, uh you're not trying to chase a top or a bottom, right? That's not what you're trying to do. No, more more or less I I try to identify trends uh in the market, substantial trends. We're looking for I always use the analogy like I look at the stock market like the ocean. If we if we if we look at a long-term um this is a weekly chart of the S&P 500, you need to know a couple things from a long-term investor standpoint. You need to know are we in a bull market phase, the stock market is going up or are we in a bearish environment where the stock market is going down. So there's a time to own stocks and there's a time not to own stocks and to move somewhere else. And I use a strategy called asset revesting which is we reinvest our capital into whichever asset is favorable. And so you know we've had a series of these bull and bare market phases and we're back into a bullish environment. So you need to know if the tide is going up or down. That is number one. Number two is if you go and you look at the stock market from a a daily chart, this is the QQQ, you need a strategy that catches these waves through the markets. And I like to think like we kind of surf the markets. Every year there's about 5 to 12 waves that that roll through this bond market, stocks, and various assets. And we want to know when a wave is ending based on technicals and money flow. We want to know when a new wave is starting. And so we're able to just move in and out of the asset classes. We exit the QQQ. We move into a different asset to to grow our capital as the stock market falls. And then we can reinvest back into the stock market. And we can play these these waves in the market. And so that's what I do. I focus on ETFs. We have 5 to 12 trades a year. We're just rotating from stocks, bonds, currency, cash, uh, and back and forth just whichever one is kind of moving. And when you go back to 2022, the stock market fell over 20%. Uh, you know, the the US dollar ETF rallied 17%. And, you know, you want to move to an asset that's going up. Investors, you shouldn't be holding things going down. So, that's what I do. We rotate through the markets. Uh, we play these these unique market scenarios. And, you know, we're getting to this level in in the stock market right now that this is this is earlier this year, just before the tariff selloff in the NASDAQ. We have this unique market sentiment setup. And this color coding here is using a bunch of different technicals and and u uh cycles and money flows. We have a very similar chart pattern unfolding right here that is telling us that we're potentially getting close to a a bigger pullback. There's a big disconnect going on in the stock market. And so I'm very cautious here of what we're going to do. We did lock in some profits on our on our trade last week. Uh so it doesn't matter what happens now. uh we are long stocks and gold and those are the the plays but we just need to be aware that these markets will rotate. We have these waves and you can take full advantage of this market if you understand how to identify these and it's the same with gold. You can move in and out of gold or the dollar and um I think gold has got some pretty good potential to the upside still. So let's talk about that. How do we know that this is still a bull market? I think that's a common question. So let's take gold for example to illustrate this point. Gold's already up 100% since 2023. So in less than 2 years it's doubled. How do we know at this point that it's in still a bull market like you said more room to climb or we've reached sort of a pivotal inflection point? Do you look at momentum indicators? Do you look at the pace at which it's growing? Do you look at um other, you know, other other asset classes that may or may not move alongside gold as an indicator? What what do you do to make that assessment? Yeah. Well, there's a there's a few layers in there. The the the number one thing is price action. Is it still trending higher? Uh more or less, you know, I don't have the the the 150day moving average, but I can actually convert this one over to one. So, if you were to take a look at like a 150day moving average, generally if price is above the 150day, which is the blue line, and the blue line is sloping up, you're generally in a bull market environment. So, you know, you need a lot of damage in gold. It needs to trade sideways for a while. Just on that note, I thought that maybe I'm reading this wrong, but I thought that whenever something is trading above the 150day moving average um or even the 200 day moving average, it's usually a sign that you should be selling it because it's um it's it's just overbought. Is that not the right way to look at it? No, I don't I don't think so. Um, generally the 150day moving average is telling us the long-term cycle, the long-term money flows. You want price above it. Um, when price is above it, it means you're in a strong long-term uptrend. There's a big tailwind, and along the way, there'll be a series of of rallies and pauses where it rallies up, it gets a little too far above the 150day. It'll take a bit of a breather, it'll rally back up, it'll take a breather, it'll rally. So, you want price above the 150day moving average. In fact, you want it really above the 50-day as well um in the short term. But as an investor, the key is to identify on on how long of a picture you you want to focus on is when do you decide it is in a new downtrend and and to get out. Now, I think gold will have to would have to have a lot of damage uh to to kind of signal we're in a bare market is probably going to have to like you break below this level or break even below this level. before I'd say, hey, gold is put in a massive top uh if it sells off and puts in a a head and shoulders or a bearish pattern and then starts to break down. So, you you don't know a bull and bare market require a lot of time and a lot of price movement to really shift that trend. And I mean, I don't trade so much on the bull and bare market side because there's a lot of volatility in there. I focus on the shorter term daily chart and the 20-day moving average. Um, so the key though is just identify the price action. Is price making a series of on average higher highs and higher lows? And if it is, then it's in an uptrend. If it starts to make lower highs and lower lows, you know, lower highs and lower lows, then you're in a downtrend. Um, so price is the number one indicator to figure out which way it's going. And then you need position management. If it drops to a certain percentage, you should get out, protect your capital. Um, but really it comes down to price action. And you just have to decide like are you like a short-term swing trading strategy? Are you like a position trading strategy which could last a few months? Are you a long-term investor really going for that bull or bare market type of trends only? Right? I think the reason I asked that is because um so many people have told me that uh markets tend to revert to the mean. So the mean reversing theory and so when something's trading at above um the moving average the 100 day or 250 day or 200 day whatever the case may be for an extended period of time usually we're looking at some sort of mean reversion thereafter. Do you have any um thoughts on this? Does this theory have any credence in actual practice? Well I mean if something gets overextended too far away from a moving average usually it wants to pull back and revert back to the moving average. You can see like a good example is well the S&P 500 doing this right now, but the 20-day moving average, gold likes to move up the the 20-day moving average. Uh, a lot most assets do. There's a 20-day kind of cycle that goes in there. Look at the S&P 500 since the lows in April. It just bounces up the 20-day. So, this is kind of like the reversion to the mean. It it wants to just take a bit of a pause or breather, find some support near a moving average, and start to bounce higher. And gold has been doing that. When we look at the long-term picture chart of gold here, you can see that, you know, when it does get a little far away from the 150day moving average, it trades sideways for a while. So, the 150day can somewhat catch up and then it gets stretched a little too far away and then it takes a breather, lets the moving average, you know, it kind of it needs time to consolidate. Uh, and so it just kind of happens over and over again. This is very bullish price action. You want to see price rally, pause. These are a series of what are called bull flag patterns. They point to higher pricing. They give us upside targets. Um so just because it's above a moving average doesn't matter. It's maybe if it's too far. If you go back in time and say every time gold rallies, you know, roughly 15% from the that moving average, maybe it needs to revert to the mean. It needs to like let the moving average catch up. We could go back over here. Here's another, you know, 15 12%. um you know it has a multiple series as they move up the the values change but you kind of need these same these same levels right that's how I would look at it um this is another interesting chart that I saw floating around on Twitter um and we can verify this with uh our own charts here I'm just show my screen real quick this is just S&P 500 versus gold so it's we're talking about stocks and gold now so far since 2023 gold has been outperforming but in particular it started really outperforming this year. Now the question is what does it mean when you've got a bull market in stocks but at the same time gold traditionally seen as a less volatile safe haven asset is outperforming? It's not like the stock market is crashing and then gold's just flat and outperforming. That would kind of intuitively make sense, but gold is beating risks uh risk on right now. And if you take a look at um well, you can do this on your own screen as well, but if you take a look at um I'll just show you mine real quick cuz I have it up just comparing these two. Uh the last time gold spiked up was in 2020 2021. Um and if you just zoom in in that period, everything was going up at the same time. Stocks were going up, cryptos were exploding as you know. Um and the and between 2020 to um late 2021, you've got a period in which the S&P was up 40% and gold was up 20%. and not bad for gold, but still not outperforming um the equities index. But now the reverse is happening. And like I said, stocks aren't crashing. So what does this signal to you? What is the market trying to tell us? Yeah. So there's you and I have touched on this. Hopefully people can wrap their head around this chart. It's a little noisy. So the the this is a good example of kind of what you're talking about. 2007 the stock market topped. We saw the candlestick chart in the background. That's the S&P 500. Um, and I've I've drawn lines to where the stock market put in the top. Gold was screaming higher. And we have the stock market at all-time highs right now. Gold is screaming higher on our current chart where we are. Eventually, if the music does come to an end here and we see some type of reversal, some event hits and and we see it roll over, we could see the stock market sell off fairly abruptly, but gold can keep shooting higher. And that's why I really like gold is because for the first wave of massive selling of bad news, whatever is going to hit the market, gold is seen as that that safe haven place. So I think we still can see a big push up in gold, 4,100, maybe even 4,500 um uh for for gold. Um but I do think eventually we could see a very big market correction. And the green line on here is is the dollar. Of course, the dollar is trading, you know, at very big lows. It's it's very much hated. Uh it's the same where we are right now. We've got the dollar trading down. Nobody likes it. Everybody thinks it's going to be worthless. But I I I think we Somebody told me the other yesterday or this morning actually about uh you know I think the administration was talking about they gave like the green light for World War II which I'm I'm not caught up on that but they were saying how it could spark the dollar to do to become very strong and the dollar has put in a very strong bounce and rally especially if you're a Canadian investor. It's looking pretty pretty good for a Canadian investor that the dollar is going to strengthen, the Canadian dollar is going to weaken. So, you want to hold US dollars. But anyway, we could see in chaos in difficult times, the US dollar does tend to rally. The US is still a powerhouse and the dollar seems to shine when there is massive uncertainty. Um so I mean when you look at it in a nutshell when gold is outperforming just like you mentioned in fact our infographic shows here precious metals tend to perform the best right near a major stock market top and that's what we're seeing and even if we look at the business cycle which this is where I think we're coming into a big uh some type of weak economic cycle something I think is going to hit that that that causes a problem. We're in this innovation and adaptation phase. The innovation right now is AI and AI just happens to be the largest tech companies dragging the indices higher uh and and making it look like this market's really strong. And this usually happens just, you know, right near a major stock market top. And a good example of this, David, is if we take a look at um the IWM. If we take a look at the IWM, this is the small caps. They are testing and trading right up near all-time highs. We're putting in potentially a triple top for the majority of stocks. And this is why everybody's really bullish right now. They're piling into small and micro cap stocks, uh, trying to make as much money as they can. And people don't realize like every time we've gotten here, we've seen a huge sell-off. The other one is IWC, which are the micro caps, even more aggressive traders. uh it is coming right up into a significant resistance area from 2021 when everybody else was piling into all these to to make as much as they can. Like aggressive traders are moving into these. It's not a bad thing. I mean people want to move to where the money is, but we also need to know it is running into resistance. And if we look at the equal weighted S&P 500, which is the um that is the R RSP ETF. So, this is the S&P 500 without the big tech heavyweights. Uh, we're, you know, we're we're kind of pushing in. Let me just zoom out a bit here. We're we're pushing right back into these these highs that we saw just earlier this year this year. Let me just zoom in. And it's starting to look like it's stalling out. So, the majority of stocks are slamming into resistance and everyone is really bullish. They feel like the market's going to scream higher. Um, that's usually a warning sign. And and when we look at the VIX, the VIX is trading very low. I'll go back to uh the daily chart here. If we look at the VIX, when the VIX is low, it's time to go. There's not a lot of fear in the market. And the biggest thing right now is a short-term indicator is the put call ratio. Now, the put call ratio, this looks like a noisy, messy chart. People are like, how do you how do you even look at that? The key for this really is just to look at um the 5-day moving average. Whenever the 5day moving average gets down to this lower level and it's actually much lower than it typically typically gets, that's telling us a lot of people are buying call options. They are betting and using leverage for higher pricing. And that's what everybody's positioned for right now. It's a contrarian indicator. When everybody's long all the aggressive stuff now they're buying options on it, usually we're going to see some type of bit of a pullback. And that's what I think we started to see yesterday. I think we hit that FOMO extreme. Everybody just who couldn't handle missing out on the rally for metals and the stock market got in yesterday. And I think the big institutional players, they started to sell into it. They're like, "Okay, we just hit that threshold. Let's let's start to sell into these people who feel like they have to get in." And um these indicators tell us we should expect some short-term weakness uh in the market. So looking at uh the future for gold and stocks, you said that uh they both have some upside for now. which has more upside and we'll get your levels from here. Um, I think gold has more upside. Uh, believe it or not, the charts of silver and gold have roughly the same upside potential. So, I would naturally go say we'll trade gold because it has a higher probability of hitting it and it has less volatility, meaning you don't have to ride quite the roller coaster. Uh, which means you can put more money to work. Um, and um, you just you can make the same amount of money as silver, more or less. People don't want to hear that. They naturally think silver outperforms dramatically. But really this year, gold is only or silver's only outperformed gold really just like eight or nine%. And it has been a hell of a roller coaster ride if you hold silver. So gold to me has got the most. I think it's got 15 to maybe even 30% upside from where we are right now. The stock market, I think it might continue to grind a little higher if the big techs can keep dragging it up, but small caps, midcaps, uh more or less equal weighted stocks have all hit resistance. So, it needs to be the large tech that drag the markets higher. And, you know, they're not showing the the strongest kind of um sign right now. When we look at the MAGS ETF, um let me see here. MAG ETF is is clearly in an uptrend, but it is actually showing a little bit of of of weakness, short-term weakness that it might want to pull back a little bit. So, I think gold, physical gold or a physical gold ETF is the play. And um yeah, that's that's where the opportunity I think lies right now. Uh what are the uh just just on gold itself, what are the um critical levels we should be watching for? So below this level, uh if it breaks a certain floor, we're looking at maybe uh more downside action. And then um do we have a ceiling here? Yeah, the the the ceiling for gold, the next level is about 4,100 40 4,80 4,100. So that's kind of where we should be looking for that next upside target. If we if we look, it's about 910%. That's that's a Fibonacci measured move where it should run into a little bit of resistance. But what happens in this market environment which when we look at 200 um7 the comparison this is where gold could not only hit that target but blast past it another 15 20% or so. So I do think uh you know that I that is the gold target 4100 but we could have a parabolic move where more people pile in and it and it shoots higher and that'll be money probably flowing out of the stock market. will probably see stocks falling and that fuels gold even more because first of all gold's on fire. If the stock market starts to fall, people now don't have to split their money between stocks and gold. They're like, "Get me out of stocks and just I'll put it all in gold." So that first initial big bout of selling in the stock market, that fear generally shifts all that money and dumps it into gold. And that's what gives that final blowoff phase for gold that that's when you need to be aware we might see like a sharp reversal. But I still think there's quite a bit of upside in the precious metal space for gold, silver, and miners. I I don't think like I'm not saying it's topping right now. I'm just saying we're getting into this stage where it's very favorable. It could keep moving fast. Um but you just need to have a game plan for when we hit these capitulation levels. Um locking in some partial profits isn't a bad idea. I I'm just smiling because time flies. When I first started in this business a few years ago in 2020, I first started doing interviews. um 4,000 5,000 gold headlines were like seen as like clickbait, you know? I put that there to make people think, "Wow, that's a crazy title. I I should click on that." Now it's a 9% move from where we are today. Yeah. Time flies. And I remember people telling me, "Well, if gold goes to 5,000, it means we're all living in bunkers and we're all living on canned food and ammo and stuff. You stock up on guns." Um yes, there are wars going on in the world. Yes, people are suffering. But here in the west where we're broadcasting from, I'm not seeing any of that. It's just a natural progression of where financial markets have taken us. Yeah, I think there's enough chaos and instability around the world in countries right now. People are people are moving to a, you know, big solid investments, physical, get them, you know, reduce their exposure to the financial markets and um yeah. Okay. Uh let's move on to finally um well before we close off I want to touch on your S&P 500 targets. So let's do that. Sure. Okay. Same question that I asked you um about gold. I'll extend to stocks. So key levels to watch for. Yeah. When when we look at the equities market. So the S&P 500 for an upside target. I mean, if we were to look at big picture analysis, similar to um gold, if we were to look at the really big pictures, there's still quite a bit of potential upside on the S&P 500. Now, this is showing we could see this is the SPY ETF, which I probably should have used the uh the futures, but overall, if we were to just zoom in on the price action here, you can see there's an upside target around 680 SPY. So, this this target is showing us we've got about 3% upside. And this is based off the let me just get this back down here. This is based off a very significant low back in the 2022 kind of market bottom 2023 um little little pullback here. Based on this, there's about 3% upside, not a whole lot, which is why I like gold. If we take a look at um the QQQ, this one's kind of interesting, too. If we look at the QQQ for the same type of thing, we have the QQQ hitting resistance like a day ago, two days ago, hitting that 100% measured move. And as you know, uh, if you hit the 618 level and you have a pause and a hiccup for a while, you generally always go up and hit the 100% measured move. So, we've now just slammed into that. We had the FOMO indicator hit an extreme yesterday. The market literally pivoted within the hour and now we have some selling pressure going on. So this this is why I was saying the Magnificent 7 need to do some serious heavy more heavy lifting to drag these markets higher because everything is pretty much running out of steam into resistance. Small caps are at resistance already as I showed you in the micro caps. So, uh, you know, the S&P 500 has the upside, a little bit of upside, but the precious metal space is definitely, um, kind of the the play at this point. I think you still need to be long equities. We're long equities. We can still go higher, but you're asking for where the next upside targets are. Now, we need to see a little bit of a pause or pullback to kind of get a gauge of of where the next short-term move will be going forward. And, you know, you know, we wanted you wanted to touch on Bitcoin. We could touch on that real quick. It's really lost its its luster here. You know, is always talked about as being the digital gold and it is, you know, far from that at this point. It's really been going down as gold and the stock market has been going up. And I think Ethereum has taken over has taken a lot of the uh a lot of the money flow. And I think a lot of people who were in Bitcoin are reverting back to getting into gold, silver, and miners. They want to get into that space. Uh so overall, you know, I would just steer clear of Bitcoin temporarily. It's got a kind of an ugly chart at this point. I think the precious metal space is is still the, you know, is kind of the one shining right now. Okay, great. Uh I'll put the link down below so people can follow your work there and um just give us a synopsis of what we can find when we do go to that link. Sure. Yeah, if you uh go to my website, my whole focus is helping investors avoid big bare markets and to take advantage of of bull markets. And really, I just I just manage my own portfolio. I share my ETF trades. Again, there's 5 to 12 portfolio adjustments each year. We move in of stocks, bonds, currencies, or cash. We just rotate as I showed with the red and green chart um with our our signals on like on the stock market where we know when to get in, when to get out, and what asset to shuffle over to. And of course, you just copy my my trade signals. They're end of day. So when you get a signal, you get it at the end of the day. You have all night and all morning to get in. We we enter positions the next day at the opening bell. And I provide portfolio allocations, our stops, our targets. We walk through it every morning. I give a video update on what's going on so you you can navigate through these markets. And um we just consistently watch our our account move up and to the right. Doesn't matter if we have a, you know, 2008 bare market or financial crashes or COVID or the 2022. We're constantly only holding an asset going up or we're sitting in cash collecting interest until there is something worth holding. And it allows us to really get a a high annualized return, very little max draw down. We don't have to carry the risk of worrying about blowing up our retirement accounts or anything like that. And uh really, you're just copying the trades that I do. So I don't dish out trades to satisfy people. I literally just share the exact portfolio allocations and trades that I do and we trade together. So that's that's it in a nutshell. Excellent. Thank you very much, Chris. We'll put the links down below. Follow Chris there and uh we'll get you on in a couple weeks to give us another update soon. Plenty more volatility to talk about. Let's see where golden stocks and uh Bitcoin end up. We haven't talked about Bitcoin today. We'll do so next time. Thanks, Chris. Thanks, David. Take care. Thank you for watching. Don't forget to like and subscribe.