Chris Vermeulen: This Screams Market Crash, Market Annihilation!
Summary
Market Outlook: The guest expects a 5-15 percent or more pullback as market breadth deteriorates and momentum fades, warning of a potential major top forming within weeks to months.
AI: Overconcentration in AI leaders is a key risk; once money exits AI, it could sharply drag the S&P 500 and NASDAQ lower amid herd selling behavior.
Semiconductors: Nvidia (NVDA) is at a pivotal level and a sharp drop could hit the broader market; Micron (MU) shows weakening momentum with risk of rollover.
Mega-Cap Tech: Microsoft (MSFT) exhibits a double-top and potential 15-20 percent decline, with institutional selling and circular AI financing concerns amplifying downside risk.
Precious Metals: Bullish near term with expected rotation from equities; gold could rise 25-30 percent toward 5150-5200 and silver could surge roughly 50 percent toward the low 80s.
Gold Miners: Not favored immediately, but a major opportunity is anticipated after a gold blow-off and pullback, setting up a potential multi-year upcycle in miners.
Bitcoin: Short-term bounce is possible, but trend risk remains to the downside; MicroStrategy (MSTR) is vulnerable due to leveraged BTC exposure and could face significant pressure if crypto weakens.
US Treasuries: TLT appears to be basing, but the guest prefers to avoid bonds until a clear uptrend emerges, noting the recent return of the stocks down/bonds up relationship.
Transcript
All of this just screams market crash annihilation. All these poor retail investors just get lured in for big returns because they don't understand risk and they haven't maybe many haven't been through a bare market or a reset and then they just get blown up. I'm trying to save people from doing that. Don't forget to sign up for a free portfolio review with one of our endorsed investment partners at wealthon.comfree. With markets hitting all-time highs, now is a great time to stress test your strategy and be prepared for what comes next. >> Chris, thank you very much for joining us today. How are things in Toronto? >> Oh, I'm I'm great. James D, thanks for having me. And uh yeah, things are good. We keep having snow overnight, but it's gone by the end of the day. But the ski hills are a little bit white, so I'm getting excited for skiing, snowboarding with the kids. >> That makes two of us. So, let's jump into it. The markets have been under pressure the last few days, and it looks like it's going to continue today. I just watched an interview with Jeffrey Gunlac, the bond king, and he said that this market, the current market environment that we're living through right now, is the least healthy that he has seen in his career. He's suggesting to investors that they go 20% cash. So, I want to get your views on that and what you think. But the S&P is still up 12% on the year. The NASDAQ still up 15% on the year, give or take. And why don't we just start right here with the S&P and take a look at this chart and where you think it might be going during this period of pressure. >> Yeah, I mean, I I think I agree with a lot of that. But I think the markets have been unhealthy for a very long time. And of course, the higher they go, the more unhealthy they they become just because of um you know, earnings ratios and and the amount that you know certain stock sectors are are doing most of the heavy lifting like the AI, the big tech. But when we look at the S&P 500, uh you can see uh the market looks like it's starting to roll over here on the where we are. I mean, we we closed out some of a QQQ position and exited the QQQ pretty much right up near the high here on a temporary trade. We've closed out our SP500 position. This market looks like it could start to roll over and the trend is turning down. In fact, if we if we look at like the the NASDAQ here, you can see this is the this past year where the trend changed direction. We went into that February tariff sell-off. Well, we've already seen the market change direction here. And this time it looks like there's potential for another big precipitous fall. So this chart here, this red and green is based on on technical analysis. It's based on cycles. It's based on money flow of where money is moving in and out of this market and how aggressively. So you know when we look at the S&P 500 from the, you know, from this view, uh, you don't want to be holding stocks right here at this point. I mean, long term, we're still in a bull market long term, but the shortterm chart like this is saying, hey, we could be going into a five or six percent correction or we could be going into a 20 plus percent correction. So, you got to you got to protect yourself at this point. >> And Chris, so right now we're looking at the S&P. >> Yeah. >> That fif that blue line, is that the 50-day moving average? >> It is. Yeah. >> And could you put up the 200 day moving average? >> Uh, yeah. Let me see if I can pull that up here. And once again, I want to look at this just to see a possible level where we might find some support if in fact it does go there. >> Yeah. So there's there's the 200 day uh loaded up the pink line here. >> Okay. >> So I mean that's a pretty good >> So we're currently at 6600 on the S&P. What's the level on the 200? the the 200 is uh 6,300 and it's about a it's about a 5% pullback from from where the market is right now. So, it'll be a pretty good pretty good dip uh if we get down there. >> And so, do you envision this happening? Do you think we're going to test that in the next few days? >> Uh it it's possible. I mean, when we look at a lot of sectors, most sectors are I look at about 40 different sectors and when you look at them all and their money flow, most of them have money flowing out. People aren't willing to put risk on into those sectors. The long-term trends are actually turning down. In fact, we have a um my hot list here gives us a good gauge. So, if we look at this sentiment column down the right hand side, if it's red, that means money is flowing away from those sectors and people don't want to be involved in them. And so that's not a good sign. Most of the sectors money is flowing out of the trend in the middle there, the up or down. This is short-term analys sectors are now in a downtrend. And from a long-term stage analysis um point of view from a bull or bare market point of view, most stocks, twothirds of sectors are actually in a topping or a downtrend, in a bearish phase. So, you definitely don't want to be holding stocks in this particular market environment just because the momentum is turning around and uh I I think we could see a I think we could see like a 5 to 15% uh pullback from where we are right now. So, down to the 20 200 day potentially even go a lot further very similar to what we saw in 2007. And during this window, if stocks do sell off, I think we could go and actually see precious metals really come to life and start to rally. Now, that's a big range, five to 15%. Why >> such a wide gap? >> Well, I mean, nobody knows the range. I mean, the market is is very overbought, right? Like, it's it's it's had this massive move up without any real significant correction. The last time we saw something like this, uh, you know, the market had a 20 plus percent correction before. Obviously that was juiced up with the the tariff talk, but I I think we could easily see this, you know, down to the 200 day, another 5% from where we are. Uh but if things get really ugly and say the momentum changes from like right now the AI and the technology space has been holding the markets up, but once that that tide turns, once money starts really daily and weekly exiting the AI space, it's going to pull the S&P 500 and the NASDAQ down dramatically. Everybody was emotional piling into AI stocks. They've driven the whole stocking market higher. But it's going to be the same when it turns around and people get scared. They're all going to do the same thing. It's a it's a herd mentality. And when, you know, everybody starts dumping Nvidia and starts dumping all these other companies because they're scared, then, you know, it's going to pull this market down sharply. And it's when everybody exits the same sector at the same time, especially when it's the heaviest weighted in the indices like technology, it's going to do a lot of damage. So, I mean, there's you have to give a range. I think we could be five to 15% down from here. And um we just have to let the markets kind of do what it's going to do. >> Okay. I want to take a look at Nvidia, but before we do that, why don't we just take a look at the NASDAQ? >> Sure. Yeah. When we look at the NASDAQ daily chart, it looks pretty similar to the S&P 500. We're getting into, you know, we're in a very similar market environment as right here. And it's the same with the S&P 500. I think I think we're we're very close to, you know, fairly significant pullback. And it's going to come potentially back down into these highs into this area. And that's going to be that, you know, five 10% pullback. And the NASDAQ is usually more volatile. It's more more focused. It's definitely more tech heavy. Uh but again, it's it's the same thing. I always look at the stock market as the tides going up or down and all the indices are the same. And most sectors are the same. They all move with the stock market. If there's a huge sell-off, every sector pretty much goes down. There might be one that bucks the trend, but so whatever happens in the S&P 500 is going to be the same as what happens more so in the NASDAQ and the Russell and the Dow. They're all the same trade. Stocks are stocks. you either want to own equities or you don't want to own equities. Uh that's that's how I like to look at things. >> So, why don't we move on now and take a look at some of these chip stocks starting with Nvidia. They're going to report this week uh I believe tomorrow, Wednesday the 19th after the close. So, that's going to be quite interesting. And as you mentioned, this uh AI has been driving this entire market and the economy. And I just read a report that said 90% of the GDP growth we've seen this year is capback spending. Okay. From AI and um all these data centers. So when you look at Nvidia, it's still up 35% on the year. But what do you make of this chart? Where do you see the risk on the downside? >> Yeah, it it definitely it's at a a critical pivot point. You can see how the price was stuck below this blue line and then suddenly it got above it. And if if the market's not happy with what's going on, I think we could see a very quick flip to the downside, I think we'd be back down to this 200 day very quickly. just the volatility of this of this move. If you were to just take the height of that move and carry that to the downside, you could see where this could flip very quickly. And um percentage- wise, I mean, that'll be a pretty decent haircut from from where it is. That's about a 17% haircut, which will pull the stock market down dramatically. If Nvidia crashes, a whole bunch of AI stocks are going to crash a whole lot more and and go with it. So, I mean, you talk about the data centers. I was just reading an article on it. The amount of money going into like infrastructure and data centers is just it's mindboggling and um you know compared to that to like money going into like um uh commercial like office space which is the complete opposite right everybody wants to go into the AI and data center space. Nobody wants to get into like commercial or or office space. So we definitely have this huge change going on in the economy and how we work. Most people now work from home it seems and everything is is data and and digital. So we're definitely in a huge um turning point. But the AI space, the amount of money going into it versus the profits these companies are making, I mean the profits I don't think are there yet and I think there's a long ways away. So, I think we could see some of this air get let out of this balloon, this bubble here um over the next I think the stock market is very very close within potentially weeks or or a couple months from a major market top if it hasn't already started to top. Like I feel like that's how close we are. And I think if the stock market is topping here, this will be like one big last push I think higher in the precious metals space which we saw in 2007 where gold shoots up dramatically about 25 27%, silver maybe 50% higher. So there's some we're I think we're at a very critical juncture in this market. >> So let's just continue on with the chip theme. Uh another one that's done very well this year is Micron. It's up 180% this year. What do you make of this chart? >> Yeah, when we take a look at Micron once it loads here, it's had a hu huge move to the upside. I mean, I don't follow this company individually. I remember I used to day trade it a decade or two ago, but um it's it looks like it's obviously get getting some volatility, meaning it's had a very nice trend to the upside, but now it it's rallied up and then it got sold off and then it rallied up and hit a nominal high. So, a minor new high. Now, it's getting hammered again. That's generally not a good sign. That's a sign that there's people are starting to sell. It's It looks like it's losing its momentum, meaning it could easily uh roll over and sell off. So, I'm not a big fan of this type of chart price action. It's a it's a sign of weakness. And there's one more I want to look at, and that is SanDisk, SNDK. This one just blows my mind. It's up over 600% on the year. I wish you told me to buy this one. But but >> no kidding. >> This reminds me so much of what we saw back in the early 2000 or the late 1990s with these dot stocks. Like look at that thing. >> Yeah, it's it's huge. I don't know what the news is. I mean, I don't follow individual uh stocks anymore. I I really focus on the overall tide of stocks, bonds, currencies, and precious metals and things like that. But there's obviously something's happened. I don't know what the deal was or what they've done, but everybody is, you know, has definitely been piling in. We have the same scenario here. Lots of volatility. So, a huge pop, sharp sell-off, another huge bounce, another big sell-off. Volume is the highest it's been ever been. Um, so this is this is a sign that it's a crowded trade. It's obviously there's bulls and bears are now fighting. And um when something is in this type of move, kind of like this bubble phase, you've got to be very very cautious because what goes straight up can come straight back down. And the monthly chart generally gives us a good view of everything. So here's here's the monthly chart. I mean, uh that's not a healthy type of price action. That's what investors want to see. But holding this type of value, especially if the stock market and the AI bubble is about to let air out of the bag, uh this could come tumbling down very quickly. It's a crowded trade. Everybody piling in. They don't care what price they they buy it at. Well, they're going to be this same mass exodus on the way down when people are like, "Oh my god, I can't take this anymore. I'm losing so much." Uh it feels kind of like one of those a very big crowded like meme type of play. Um, so anyways, that's I'm not a fan of that either. >> One more name. Why don't we take a look at Microsoft? It's up 20% on the year. It owns 20% or sorry, 27% of Open AI, which owns ChatGpt. So, it's a good proxy for Open AI. What do you make of this chart? >> Yeah, I'm I'm not a fan of the chart. I think I think Microsoft's a great company. I think they've they've got solid solid revenues, solid business model, but I'm not a fan of, you know, this double top. Both of them happened with a massive gap up and then just got hit with big selling. Another couple big gaps right up into resistance again. It's been hammered with big selling. I feel like I feel like this stock I feel like that is a double top. Like that is a sign of exhaustion of big sellers unloading shares and it looks like it's already kind of more so breaking down. You just draw a line across here. It does not look good. And generally the depth of whatever this this is, I mean, this is the most basic technical analysis you can do, but the the height of a topping pattern, you can usually flip that to the downside, and that brings us down to 440, which brings us into this little cluster and these previous highs. Uh, so that'll be a pretty big unwinding in Microsoft. And um this this is this is these big companies. Some of these big companies when they sell off, you know, 15 or 20%. And a whole bunch of them do it at the same time. They're kind of all the same trade. It that this is what causes that 15 to 20% pullback in the stock market. Um so that's that's what people need to be aware of. You need to have an exit strategy. If you're not out already, you need to protect your capital because eventually one of these pullbacks in the stock market isn't going to be just a buy the dip and hold on and you'll be fine a couple months later or a couple weeks later. It's going to be uh you're going to buy the dip, it's going to keep falling. You're going to lose half of your portfolio. You've just wasted three to five years, maybe even longer. Uh and so that's what I focus on. like how how can somebody protect their capital from dev, you know, having it devastated and changing your lifestyle and we got a lot of big signs in these big tech and AI companies that are not looking good and they are going to crush the equities market when they when they fall. >> Yeah, just one comment on this Microsoft chart. It does look like it's a lot more advanced to the downside than those other charts we looked at, Nvidia, Micron, and SanDisk. And it looks like maybe because of all the circular financing that's been going on with OpenAI and so many other names that that's why uh large institutional investors have been selling this name. Do you see the possibility there's a gap down there that we saw back in April May. Do you see the possibility of the stock going down there and filling in that gap on the downside? Yeah, I I think I think if we go into a bare market and and finally we have like a financial reset, I think I mean we can zoom way out. I think stocks are going to go way beyond that. I think I think we could see I think it will the market will probably want to pierce this low. It means it's going to want to come all the way down into this level, break this low, which will create another big wa massive wave of panic selling this this level here. I mean, the market loves to apply maximum pain. So this is a very critical turning point where it became major resistance was major resistance now became massive support. If we go to a huge recession I think we'll see Microsoft want to break this low and anybody who bought through this whole phase through here are going to be looking at that low saying if it breaks that low it's like oh my god this is going to be brutal. So that's what will create a probably another wave of selling which will potentially want to pierce this next low down here. The markets are always trying to make higher highs or lower lows. It's trying to break standout highs and lows. So, I think we could see a huge haircut across the board. I don't care how good the companies are, and I I've done this many times in detail about dividend stocks and the dividend sector ETFs where you focus on, you know, most people focus on big dividend companies. They get hit the hardest. And even though they're the some of the strongest companies, pay the most money or rock solid, the share prices still get absolutely annihilated. And it's because the mo most of the money in the US equities market are baby boomers or they're 50 plus people with money and they they're all invested in the same stuff, right, Jim? They're all invested in dividend stocks and they're diversified across a bunch of stuff, but they all are also in the same boat. So when they all start to panic, when things sell off enough then and they feel like their lifestyle and their life savings are threatened, they all start to call their brokers and start to sell positions. and they all own the blue chips and the dividend stocks which are the Microsofts and all of these right so those stocks get hit really really hard right when you think you've got the best company you realize you're holding one of the most volatile ones and we saw this during COVID stock market pulled back 35% well if you own own dividend stocks they pulled back on average over 40%. So, these so-called safe companies to get a yield carry a lot more volatility than most people expect. And I mean, that's that's, you know, I just I'm not a big fan of diversification. I'm not a fan of buy and hold. I'm not a fan of holding dividend stocks if you've been buying them in the last, you know, 5 10 years. I think you they're great to buy after a recession because then you're making 8 to 15 plus% return in your dividends plus lots of upside. But holding dividend stocks right now are a ticking time bomb for a retiree. >> If you're looking for a simple, secure way to invest and own physical gold and silver, visit our sister company, Hardass Assets Alliance, at hardassallalliance.com. That's hardassallalliance.com. >> All right. So, let's just make the assumption the markets are going to come under pressure here in the next few days or the next few weeks. We got to put our money somewhere. if we take it out of the S&P and the NASDAQ. You mentioned gold. It's up 50% on the year. What are your thoughts on gold now? Do you think there's more room on the upside or do you think it's going to be it's going to come under pressure like so many other asset classes right now? >> Yeah, I do think I think gold is going to um I think gold's going to go a lot higher. I think, you know, in 2007, we saw very similar price action in terms of what the S&P 500 did, what gold has done, what the US dollar is doing. Plus, the sentiment is very similar. People um have been very bullish on equities. They're really super bullish on the precious metal space. Uh the dollar is super hated. I think what, you know, I think you just kind of nailed it there, Jim. I think we're going to see, for example, the the blue line I'm about to draw would be the stock market starts to sell off 5 10 15 20%. And the money is going to come out of equities and money is always looking for a return on investment. So, it's going to go in out and search where can I put my money and precious metals have been the one of the top performers. So, all that money coming out of equities is going to send gold sharply higher along with silver, platinum, platium and miners. And I think we could see gold round to about 51 or 5200. So we're looking at about 27 30% to the upside for gold. And this this could all happen really within a two or three month window potentially. So we're very close to another explosive move in this space. Silver's very similar. I think silver could run 50 plus percent up into like $82, you know, an ounce fairly dramatically if this unfolds like I think it's going to unfold. So, if we do get a pull back in gold, uh I'm sorry, where's the 200 day line? Let's just assume that's where we're going to find support. >> Yeah. Uh well, I don't know. Yeah. I mean, that that would be a very good support level at this point. That's way down here at 3500, which is also the breakout zone. I don't I don't see gold pulling back down there. This this blue line I just drew here, that's me just drawing what the if the if this was the S&P 500 selling down, all that money would be going into gold. So don't don't look at don't look at that. That's not what I'm expecting of gold. I'm expecting gold to go higher as the stock market goes down. >> And I'm sorry you mentioned in 2007 when we saw the finan great financial crisis. Uh what happened to gold then in 0708? >> Yeah. I mean if we if we look what happened back then we can I'll just pull the chart up so you can get a visual here. So for for example, if we just go back to 2007, 2006, 2007, stocks rallied up to all-time highs. Gold rallied to all-time highs. The right-hand chart is exactly where we are right now. That yellow line is gold. The candlestick chart is uh the S&P 500. So we started to see some weakness right here in the stock market. We're just starting to see some weakness right now in current day price action. And as the stock market in 2007 sold off 20%, all of that money went into gold and sent gold higher. So I believe we could see something very similar. The stock market starts to sell off. That money then suddenly says, "Hey, I'm going into gold." They buy gold, silver, platinum, platium, and they start to to rocket higher. And if we look at these charts, like just take take a look at um what what has happened here in terms of these other asset classes. So if we look down here, we got GDX which is gold miners. We got silver, platinum and platium. And in this very similar scenario in 2007, we saw a lot of money move into gold miners. It got the attention of investors and then it had a pullback. We saw the same with silver and we saw with platinum and we saw with platium. And if we go and we look at where we are right now and we just look at that chart, everybody has piled into miners silver uh platinum and platium. And what happens after this is the stock market, if we look 2007, the stock market starts to sell off and we end up seeing the precious metal space, all of them rallied 30, 40, 50, 60% from where we are right now. So I I really like precious metals at this this kind of junction in terms of over the next one to three months we could see a very strong parabolic move in gold and silver that I I think should eventually be sold into because I do think it'll get sold off because what'll happen is eventually we'll see the stock market sell off which it you know last time it did this it sold off about 50 plus percent and gold and silver sold off as well. they'll eventually get pulled down with the fear and with the mass selling in margin calls and gold pulled back 34% which isn't massive compared to you know 20 55% in the stock market but silver pulled back 60%. And platinum and platium pulled back like 60% as well. So this is the sweet spot I think for metals an upside trade in metals. Um, it's a trade. I think once we have this blowoff phase, I I'll be looking to liquidate, close out a lot of a lot of my gold position, more or all of it, and then look to reinvest later once I think it's, you know, the airs come out of the precious metals bubble at some point. >> And I know you trade ETFs, so you're long GLD or the Fizz. >> We we've we've I mean, for when it comes to precious metals, I only I have physical uh gold and silver only, but um we do trade GLD. We did a we did a GLD trade just recently which we've we've closed out. We we did a very quick trade right here. We we played the breakout. We got out right here on this peak. We hit our 15% target. And so that was a quick quick trade using an ETF, but uh I only hold physical metals in terms of uh precious uh precious metals going forward. >> So you don't own any miners? >> No. No. There'll be a time like I I believe that when when we see gold have this correction, this this eventually once gold tops out and then we see a big sell-off, that's when I'm going to be excited more so for miners. I think it'll be something similar to this. If we go back in time to um 2008, which uh have to zoom way back here, I think we're going to come into So, in 2008, we saw gold pull back 34%. And that's what I'd be waiting for is for for gold on the current price chart to top out at 51 52 somewhere and then sell back down. And then I'll be looking to get into gold miners somewhere down here because then I believe we're gonna have a multi-year like that's when we can see gold and silver really take off. I mean I think we could extend to like that 8 10 12 something thousand dollars that could go out for many years. And so this is this is the phase you know the last time I traded miners really was in this phase. I want to get into this new super cycle uh where gold and silver go up into the right forever. And that's when you can get into the miners and catch, you know, a lot of them will move hundreds and some of them will move thousands of percent in that phase. So I don't think we're minor have had a great run. They're they're still moving higher. But um before I I get into minors and trading individual stocks, I kind of wait for specific major setups uh to take place because I'm not I'm not a big stock trader anymore. I I really focus on managing ETFs and um not a whole bunch of individual little companies. And Chris, do you mind going back to the gold chart again? I just want to clarify uh where you think it's going. Okay. So, >> so right now you're still bullish on the gold price. >> I'm still bullish on gold. If we just take this recent, let me just clear this chart real quick here. If we uh use Fibonacci extension, we can we can get a gauge of where this next upside move should be. So based on the the recent rally and pullback, this is telling us we should be looking for gold to go around 5150 to 5200 uh somewhere in that range. And from where we are right now percentage-wise, you know, it's looking at about 26 25 26% uh to the upside. So that's that's where I think gold is going to go. The question is, is it going to do one of these? Is it going to flag sideways? How long is it going to do that for? I think it's kind of, you know, digesting this recent runup. The sooner it breaks out, the better. I'd like to see it turn a corner and start to run here into the end of the year versus drag out for a long time, but uh we just have to kind of wait and see. The the precious metal space did get pretty frothy right over here. we hit a Fibonacci target, which is where we we got out on our our gold trade. And after that, it just turned into a feeding frenzy that if people didn't have anything in metals, it was this this like week and a half, these two weeks where the whole world seemed to just want to pile in. They didn't care what price. And so, it got too crowded and now the market's shaking them out. And now there people are still nervous about precious metals putting in a top. So, it's trying to work that out of the system. Get all those weak hands out who give up on it. And then as soon as they get out, then we should start to see this run higher. >> I recently sat down with a money manager. He manages 10 billion dollars. He has a 20% waiting toward gold and gold miners. And in spite of the move we've seen this year on both gold and silver, he said none of his clients are asking about gold. No one in his office is really asking about it. And I thought that was interesting. >> Yeah. Well, I mean, when I when I say everybody wanted to pile into gold over here, it's not the whole world wanted to pile in, it's only the people who are open to the idea of investing in gold, period. It's a very small group of people. Most people don't own gold and they don't, if they do, they have a tiny amount of it and they don't look at it as a huge money maker. They just look at it as some barbaric investment, right? That's how a lot of the natural general public see it. Um, so you know, I think there'll be a time that eventually we'll see gold rally up and then potentially we go into a big pullback after we have some type of recession or reset. And then as it starts to take off and it starts to head up towards potentially like $10,000 an ounce or something, that's when the mass market actually start to get involved in it. And that's when we finally see like the average portfolio might have like one and a half percent or or 3% in gold. And that's when gold will put in a massive long-term high again. But right now, I mean, the majority of people who hold gold, like the the average percentage in the portfolio is like less than a percent or less than a half a percent. It's tiny. Like most people don't hold it. Um, all you know, so that's kind of where we're at right now. >> All right, Chris, let's take a look at silver. It's up 70% on the year. Everybody's making a big deal about it because it went through 50 bucks. >> Yeah. Yeah. There's there's a psychological level at 50 bucks, a h 100red bucks, right? every $10 is also a psychological level. Um, you know, you could argue here it looks a little bit like a double top, but um I I still think it's I still think the chart looks very strong. It has it has a lot of momentum behind it and it's just kind of working off a bit of an overbought territory. And I think it's it's also flirting and and messing around with this $50 level. So many people put so much emphas emphasis on, you know, $100 or $50 mark. And so I think there's just a lot of people buying and selling around this this $50 per ounce level and the market's just trying to figure it out and it's just kind of digesting it. But I do think silver will follow suit with gold and be up and to the right and have a fairly significant move. And even though it's up 70% on the year, we got to remind our viewers this is where it was in 2011. So adjusted for inflation, it's still down, you know, to where should it be probably adjusted for inflation? 75 bucks, 80 bucks an ounce. So it's still way underperforming gold. >> Yeah. And and my chart analysis, I think, points to it somewhere around 82 bucks an ounce, which if if it was to blow off and and shoot higher up there, I mean, that would put us right in line with where it should be, right? So, uh, you know, silver's got these very explosive moves. When you go back in time, you got to be aware. Like I'm always nervous of things that go straight up because it's pretty obvious what happens after that momentum comes to an end. But it doesn't mean silver's put in the top yet. Silver could still run, you know, up to it could have this crazy huge move somewhere up into this $80 per ounce mark. Some it'll dwarf all of these other ones. You know, it's so it's it's exciting. >> Okay. So, we can't have a discussion on gold without talking about digital gold or Bitcoin and it topped out at 125,000. It's now trading around 90,000 give or take. Who knows where it is right now as we speak, but it's down on the year. What are your thoughts on gold? I know in the past you've been negative on it. >> Yeah, I'm pretty negative. It's it's starting to look a little bit um like it's had enough of a move down that it's going to kind of digest things a bit. I I think we might be coming down into like one of these kind of phases, right, where it might mess around down here for a while and try and figure out what it's going to do. It looks ready for some type of bounce and consolidation, but it it definitely, you know, I think we could see this bounce up in here. And the big question will be, can it hold this level? If it if it starts to break down from here, we're going to have a very very big precipitous fall. We're going to have this huge huge amount of move that it's already come down. we're going to have a that that move, I think, unfold again to the downside, which will break this low, which will bring it down into this long-term support zone. So, typically, like the the way the markets move with kind of cycles, if it has like this this um cycle to the upside, well, usually it's going to keep having those similar percentage cycles to the upside kind of over and over again. But when it breaks down and and that cycle breaks, you pretty much take that momentum cycle back to the downside and and so you get not only the first cycle selloff, but then you get the second half. So it gives you twice as much of a move, which is obviously what clearly breaks a long-term trend from up to down. So I'm I'm shortterm I'm a little bit bullish on on Bitcoin. I think it might have a little bounce. Maybe the equities markets also have a little bounce. They're a little oversold, but I do think everything's going to roll over and then continue to go a lot lower over the next couple of months, which which kind of goes against seasonality. Seasonality for the stock market is is higher into the end of the year, but I mean, I've never traded based off seasonality. It's not very accurate. Uh, and Bitcoin moves a lot with the stock market. So, if AI and NASDAQ are going to like, you know, bounce and then sell off and go lower, Bitcoin is probably going to be dragged down with it. >> Yes, I've never traded Bitcoin, but uh I have to say I wish I did. But every time we see one of these pullbacks, and we've seen many of these pullbacks where it's down 20, 30, 40%, it just kind of finds a level and then it takes off again. I mean, it wasn't too long ago when it was at 65,000, right? and next thing you know it just rips to 125. >> Yeah, these these are long patterns though. I mean these are like uh you know it takes eight months eight nine months to unfold some of these or that's a long time. I mean I'm not a Yeah, but there's no doubt it's been in a strong uptrend and obviously when you're in an uptrend all these sell-offs eventually get bought back up. But again, if if the trend breaks, if we go into a bearish environment, this will probably be back down at like, you know, 60 or $40,000 next year. So, you don't want to be on the wrong side. You don't want to just buy and hope, you know, that's not that's not what I do. Eventually, a pullback turns into a crash and you just don't know which one it is and um it becomes very costly, not only for time, uh for money, but also more so time. you can waste a lot of time being stuck in a crappy investment and just wish you just sold it and uh moved on. >> Yeah, to me Bitcoin is just a leverage play on the NASDAQ and it appears right now the NASDAQ's under pressure. So, it's risk off and Bitcoin is just following that trade. Now, we can't talk about Bitcoin without talking about Micro Strategy, which is now called Strategy. And a big part of what they own on their balance sheet is Bitcoin. It peaked at $400 this year. Now it's at where is it? 200 bucks. >> Uh yeah, 210. Yeah. >> Okay. So, this this one kind of reminds me of the Microsoft chart because it was it's like Microsoft has been leaning on the downside and this one also is leading on the downside. >> Yeah, it's it doesn't it doesn't look the greatest. I mean, Bitcoin has lost a lot of its Bitcoin was a feeding frenzy right back over here. like I have a lot of different tools to get a gauge on how hot and heavy somebody is over a specific asset class and it was a feeding frenzy just just like this. Now, Bitcoin's last big bounce and rally and the strat this symbol moves a lot like it um is just showing there's not the same amount of interest. There's no volume. It's people are people have just lost their Bitcoin is not top of mind anymore. Yeah, everybody knows it, but it's not People aren't interested in it. I think a lot of people who are in precious metals went to crypto. Now it's like, you know, crypto's kind of losing its shine and now everybody's moving back over to gold and they want to be in something, you know, that's um uh that's that's performing, right? So, Bitcoin is definitely not looking good. This stock doesn't look good. I mean, I'm not I've never been a fan of this stock. I don't um I'd rather just trade Bitcoin versus, you know, someone with a a stock symbol based around it. I hate it when people hype stuff up. But uh so I mentioned Micro Strategy, but I believe I read there's over a hundred companies that have taking taken on Bitcoin onto their balance sheet just to copy the strategy that Michael Sailor has done. And it's amazing like there's so many landmines out there, right? And this could be a big one big one like uh Michael uh Michael Sailor just did an interview recently. He said his average cost of all the Bitcoin is 70,000. Okay. uh and we both know it can get there pretty quick, but uh >> you just don't know what's going to happen, right? And he's taken on a lot of debt to buy that Bitcoin. So, if we do get a ma major wash out in the S&P and the NASDAQ and Bitcoin, there could be a lot of destruction out there. >> Well, you you bring up a good point. I mean, typically once you have a whole bunch of people copying the leader, usually that move is pretty much done, right? So now everybody's doing the same thing as you just said and that means it's a crowded space. It's already over. It's a it's the same when you have a big move in a particular asset class like gold miners for example. Um just in 2011 you gold miners were on fire and you know a 3x ETF gold miner comes out. So you could you could jack it up and then of course the the whole spot the whole market kind of tops out. You see this all the time like when people start copying a strategy like micro strategy or or a sector or commodity does really well and then suddenly a leveraged ETF pops up for it like a 3x. I'm like okay now it's like it was hot everybody was excited about it. Now they're creating a tool to try and profit from it and that usually means the end is is near. And so that's I mean I think Bitcoin is done for a while. I mean it might bounce and rally here and there significantly but I don't know about going to alltime highs anytime soon. So, I'm always I'm always leerary once the mass psychology picks up and people start to copy and try to leverage the recent movement the because that usually that recent movement is a kind of a one-time thing. It usually fizzles out and it never comes back to life like it used to. Yeah. You mentioned the leverage ETFs. I had a conversation with a ETF PM last month and he said in one week alone in the month of October there was over 200 filings with the SEC for leveraged five times leveraged ETFs. >> Five times. >> Five times. And and >> that's not good. >> Yeah. And I'm not sure if you knew this, but there's a lot of ETF leveraged ETFs on single stocks. So AMD, Nvidia. >> Yeah. All of this just screams market crash annihilation. The poor retail investor who who doesn't understand risk management, who swings for the fences, they chase all the shiny fastest moving stuff. I mean, this is what the market does. It it literally herds people in, puts them in really crappy investments just like 5x and leveraged, you know, ETFs on stocks. All these poor retail investors just get lured in for big returns because they don't understand risk and they haven't maybe many haven't been through a bare market or a reset and then they just get blown up. It it's that's I'm trying to save people from doing that and it's pretty boring when you manage risk which is why it's either you uh love or hate my analysis. You either want consistent growth and don't have to worry about what happens. We don't really care because we can navigate it. or you know, you either like that or you think I'm the most boring trader ever and I don't have enough trades and I don't trade stocks and I all of this stuff. So, it's yeah, I can only help those who are open to, you know, protecting their capital, protecting their lifestyle, but the markets are going to do exactly what they do every time. They suck everybody in. People get stuck in crappy investments. They blow up and people lick their wounds and they hate the stock market for the next three or five years and they slowly limp back in over time, but they're damaged, mentally damaged from it. They're always scared. They're hard. It's hard for them to get back into the markets because they're scared they're going to lose again. And the damage the the damage that huge losses do to your psyche um really ruin you unless you you've got like a north like like a a star to follow somebody somebody or a strategy that can keep you on straight and narrow. >> Hey Chris, why don't we talk about bonds just because we're talking about defense now during the this market volatility and let's take a look at the TLT which is the ETF for the 20 year. It's up small on the year but what are your views on this? Yeah, I think I think bonds are trying to carve out a bottom. Now, I've never been an expert uh when it comes to interest rates and Fed and economic data. That's not my thing. I I just I don't see a whole lot of value in it. I used to do it years and years ago, but I always found it very random. When you look at just the chart of bonds, they look like bonds are trying to put in a bottom. Where I'm torn is I think we've got, you know, some people want a lower interest rate policy, but we also have an inflation problem. I do think the inflation problem will change fairly quickly. Um I think I think once the momentum in the economy turned down, people's wallets are going to snapshot. The gouging for services, the gouging for products, the high cost of everything, eventually things are going to have to come back down because they're just people are going to have to liquidate their inventory. they they're going to go out of business or they have to liquidate or they're going out of business. It has to get liquidated. So eventually there'll be some reset but so I'm really torn on bonds. I feel like we still have high inflation so rates aren't really going to budge but then we also have somebody wanting you know lower interest rates which if interest rates go down then TLT should rally. So to me it is in what is kind of known as a stage one. If we just look at this you and I have touched on this many times. The stage one is is really kind of a sideways trendless. It's red on my charts here because it's it's a basing formation. It's trying to figure out what's going to happen. And bases can last years. And so it's dead money. And and I'd rather I'd rather put my money somewhere where there's no downside risk and earn a yield than hold on to something that potentially rates could go up and bonds could go down or some some maybe trust in bonds drops dramatically and we see the bond price drop. So I would steer clear of bonds for now. I'm not a big fan of them. And um once they do pick a new like once they put in a bottom and start to trend higher, I'll like bonds again. if they're trending up, I want to own them. Generally, if if the stock market gives us a sell signal, you move over to bonds, and bonds should go up. And we've been seeing that relationship more so in the last few months than we have in a very long time, in years, which means stocks go down, bonds go up. And so, that's kind of kind of um what I'm waiting for. So, I'm steering clear of bonds for now. Okay, Chris, that was a great overview of the market. It looks like we're you're expecting some trouble here in the uh next couple of days and it's going to be interesting to see these Nvidia numbers out tomorrow. If somebody would like to get in touch with you or check out your various services, where can they go? >> Yeah, the best spot would be go to YouTube, my channel, the technical traders, or my websitethetnetraders.com and I share daily analysis videos. I cover what I'm doing with my portfolio, all my specific trades, all of that stuff. So you can you can learn how to read the charts, you can follow along, and you can copy the exact same portfolio allocations and trades that I do. >> Chris, once again, thank you. >> Thanks, James. Always a pleasure. Take care. >> Don't forget to sign up for a free portfolio review with one of our endorsed investment partners at wealthon.comfree. With markets hitting all-time highs, now is a great time to stress test your strategy and be prepared for what comes next. Thank you all for watching. We'll see you again next time.
Chris Vermeulen: This Screams Market Crash, Market Annihilation!
Summary
Transcript
All of this just screams market crash annihilation. All these poor retail investors just get lured in for big returns because they don't understand risk and they haven't maybe many haven't been through a bare market or a reset and then they just get blown up. I'm trying to save people from doing that. Don't forget to sign up for a free portfolio review with one of our endorsed investment partners at wealthon.comfree. With markets hitting all-time highs, now is a great time to stress test your strategy and be prepared for what comes next. >> Chris, thank you very much for joining us today. How are things in Toronto? >> Oh, I'm I'm great. James D, thanks for having me. And uh yeah, things are good. We keep having snow overnight, but it's gone by the end of the day. But the ski hills are a little bit white, so I'm getting excited for skiing, snowboarding with the kids. >> That makes two of us. So, let's jump into it. The markets have been under pressure the last few days, and it looks like it's going to continue today. I just watched an interview with Jeffrey Gunlac, the bond king, and he said that this market, the current market environment that we're living through right now, is the least healthy that he has seen in his career. He's suggesting to investors that they go 20% cash. So, I want to get your views on that and what you think. But the S&P is still up 12% on the year. The NASDAQ still up 15% on the year, give or take. And why don't we just start right here with the S&P and take a look at this chart and where you think it might be going during this period of pressure. >> Yeah, I mean, I I think I agree with a lot of that. But I think the markets have been unhealthy for a very long time. And of course, the higher they go, the more unhealthy they they become just because of um you know, earnings ratios and and the amount that you know certain stock sectors are are doing most of the heavy lifting like the AI, the big tech. But when we look at the S&P 500, uh you can see uh the market looks like it's starting to roll over here on the where we are. I mean, we we closed out some of a QQQ position and exited the QQQ pretty much right up near the high here on a temporary trade. We've closed out our SP500 position. This market looks like it could start to roll over and the trend is turning down. In fact, if we if we look at like the the NASDAQ here, you can see this is the this past year where the trend changed direction. We went into that February tariff sell-off. Well, we've already seen the market change direction here. And this time it looks like there's potential for another big precipitous fall. So this chart here, this red and green is based on on technical analysis. It's based on cycles. It's based on money flow of where money is moving in and out of this market and how aggressively. So you know when we look at the S&P 500 from the, you know, from this view, uh, you don't want to be holding stocks right here at this point. I mean, long term, we're still in a bull market long term, but the shortterm chart like this is saying, hey, we could be going into a five or six percent correction or we could be going into a 20 plus percent correction. So, you got to you got to protect yourself at this point. >> And Chris, so right now we're looking at the S&P. >> Yeah. >> That fif that blue line, is that the 50-day moving average? >> It is. Yeah. >> And could you put up the 200 day moving average? >> Uh, yeah. Let me see if I can pull that up here. And once again, I want to look at this just to see a possible level where we might find some support if in fact it does go there. >> Yeah. So there's there's the 200 day uh loaded up the pink line here. >> Okay. >> So I mean that's a pretty good >> So we're currently at 6600 on the S&P. What's the level on the 200? the the 200 is uh 6,300 and it's about a it's about a 5% pullback from from where the market is right now. So, it'll be a pretty good pretty good dip uh if we get down there. >> And so, do you envision this happening? Do you think we're going to test that in the next few days? >> Uh it it's possible. I mean, when we look at a lot of sectors, most sectors are I look at about 40 different sectors and when you look at them all and their money flow, most of them have money flowing out. People aren't willing to put risk on into those sectors. The long-term trends are actually turning down. In fact, we have a um my hot list here gives us a good gauge. So, if we look at this sentiment column down the right hand side, if it's red, that means money is flowing away from those sectors and people don't want to be involved in them. And so that's not a good sign. Most of the sectors money is flowing out of the trend in the middle there, the up or down. This is short-term analys sectors are now in a downtrend. And from a long-term stage analysis um point of view from a bull or bare market point of view, most stocks, twothirds of sectors are actually in a topping or a downtrend, in a bearish phase. So, you definitely don't want to be holding stocks in this particular market environment just because the momentum is turning around and uh I I think we could see a I think we could see like a 5 to 15% uh pullback from where we are right now. So, down to the 20 200 day potentially even go a lot further very similar to what we saw in 2007. And during this window, if stocks do sell off, I think we could go and actually see precious metals really come to life and start to rally. Now, that's a big range, five to 15%. Why >> such a wide gap? >> Well, I mean, nobody knows the range. I mean, the market is is very overbought, right? Like, it's it's it's had this massive move up without any real significant correction. The last time we saw something like this, uh, you know, the market had a 20 plus percent correction before. Obviously that was juiced up with the the tariff talk, but I I think we could easily see this, you know, down to the 200 day, another 5% from where we are. Uh but if things get really ugly and say the momentum changes from like right now the AI and the technology space has been holding the markets up, but once that that tide turns, once money starts really daily and weekly exiting the AI space, it's going to pull the S&P 500 and the NASDAQ down dramatically. Everybody was emotional piling into AI stocks. They've driven the whole stocking market higher. But it's going to be the same when it turns around and people get scared. They're all going to do the same thing. It's a it's a herd mentality. And when, you know, everybody starts dumping Nvidia and starts dumping all these other companies because they're scared, then, you know, it's going to pull this market down sharply. And it's when everybody exits the same sector at the same time, especially when it's the heaviest weighted in the indices like technology, it's going to do a lot of damage. So, I mean, there's you have to give a range. I think we could be five to 15% down from here. And um we just have to let the markets kind of do what it's going to do. >> Okay. I want to take a look at Nvidia, but before we do that, why don't we just take a look at the NASDAQ? >> Sure. Yeah. When we look at the NASDAQ daily chart, it looks pretty similar to the S&P 500. We're getting into, you know, we're in a very similar market environment as right here. And it's the same with the S&P 500. I think I think we're we're very close to, you know, fairly significant pullback. And it's going to come potentially back down into these highs into this area. And that's going to be that, you know, five 10% pullback. And the NASDAQ is usually more volatile. It's more more focused. It's definitely more tech heavy. Uh but again, it's it's the same thing. I always look at the stock market as the tides going up or down and all the indices are the same. And most sectors are the same. They all move with the stock market. If there's a huge sell-off, every sector pretty much goes down. There might be one that bucks the trend, but so whatever happens in the S&P 500 is going to be the same as what happens more so in the NASDAQ and the Russell and the Dow. They're all the same trade. Stocks are stocks. you either want to own equities or you don't want to own equities. Uh that's that's how I like to look at things. >> So, why don't we move on now and take a look at some of these chip stocks starting with Nvidia. They're going to report this week uh I believe tomorrow, Wednesday the 19th after the close. So, that's going to be quite interesting. And as you mentioned, this uh AI has been driving this entire market and the economy. And I just read a report that said 90% of the GDP growth we've seen this year is capback spending. Okay. From AI and um all these data centers. So when you look at Nvidia, it's still up 35% on the year. But what do you make of this chart? Where do you see the risk on the downside? >> Yeah, it it definitely it's at a a critical pivot point. You can see how the price was stuck below this blue line and then suddenly it got above it. And if if the market's not happy with what's going on, I think we could see a very quick flip to the downside, I think we'd be back down to this 200 day very quickly. just the volatility of this of this move. If you were to just take the height of that move and carry that to the downside, you could see where this could flip very quickly. And um percentage- wise, I mean, that'll be a pretty decent haircut from from where it is. That's about a 17% haircut, which will pull the stock market down dramatically. If Nvidia crashes, a whole bunch of AI stocks are going to crash a whole lot more and and go with it. So, I mean, you talk about the data centers. I was just reading an article on it. The amount of money going into like infrastructure and data centers is just it's mindboggling and um you know compared to that to like money going into like um uh commercial like office space which is the complete opposite right everybody wants to go into the AI and data center space. Nobody wants to get into like commercial or or office space. So we definitely have this huge change going on in the economy and how we work. Most people now work from home it seems and everything is is data and and digital. So we're definitely in a huge um turning point. But the AI space, the amount of money going into it versus the profits these companies are making, I mean the profits I don't think are there yet and I think there's a long ways away. So, I think we could see some of this air get let out of this balloon, this bubble here um over the next I think the stock market is very very close within potentially weeks or or a couple months from a major market top if it hasn't already started to top. Like I feel like that's how close we are. And I think if the stock market is topping here, this will be like one big last push I think higher in the precious metals space which we saw in 2007 where gold shoots up dramatically about 25 27%, silver maybe 50% higher. So there's some we're I think we're at a very critical juncture in this market. >> So let's just continue on with the chip theme. Uh another one that's done very well this year is Micron. It's up 180% this year. What do you make of this chart? >> Yeah, when we take a look at Micron once it loads here, it's had a hu huge move to the upside. I mean, I don't follow this company individually. I remember I used to day trade it a decade or two ago, but um it's it looks like it's obviously get getting some volatility, meaning it's had a very nice trend to the upside, but now it it's rallied up and then it got sold off and then it rallied up and hit a nominal high. So, a minor new high. Now, it's getting hammered again. That's generally not a good sign. That's a sign that there's people are starting to sell. It's It looks like it's losing its momentum, meaning it could easily uh roll over and sell off. So, I'm not a big fan of this type of chart price action. It's a it's a sign of weakness. And there's one more I want to look at, and that is SanDisk, SNDK. This one just blows my mind. It's up over 600% on the year. I wish you told me to buy this one. But but >> no kidding. >> This reminds me so much of what we saw back in the early 2000 or the late 1990s with these dot stocks. Like look at that thing. >> Yeah, it's it's huge. I don't know what the news is. I mean, I don't follow individual uh stocks anymore. I I really focus on the overall tide of stocks, bonds, currencies, and precious metals and things like that. But there's obviously something's happened. I don't know what the deal was or what they've done, but everybody is, you know, has definitely been piling in. We have the same scenario here. Lots of volatility. So, a huge pop, sharp sell-off, another huge bounce, another big sell-off. Volume is the highest it's been ever been. Um, so this is this is a sign that it's a crowded trade. It's obviously there's bulls and bears are now fighting. And um when something is in this type of move, kind of like this bubble phase, you've got to be very very cautious because what goes straight up can come straight back down. And the monthly chart generally gives us a good view of everything. So here's here's the monthly chart. I mean, uh that's not a healthy type of price action. That's what investors want to see. But holding this type of value, especially if the stock market and the AI bubble is about to let air out of the bag, uh this could come tumbling down very quickly. It's a crowded trade. Everybody piling in. They don't care what price they they buy it at. Well, they're going to be this same mass exodus on the way down when people are like, "Oh my god, I can't take this anymore. I'm losing so much." Uh it feels kind of like one of those a very big crowded like meme type of play. Um, so anyways, that's I'm not a fan of that either. >> One more name. Why don't we take a look at Microsoft? It's up 20% on the year. It owns 20% or sorry, 27% of Open AI, which owns ChatGpt. So, it's a good proxy for Open AI. What do you make of this chart? >> Yeah, I'm I'm not a fan of the chart. I think I think Microsoft's a great company. I think they've they've got solid solid revenues, solid business model, but I'm not a fan of, you know, this double top. Both of them happened with a massive gap up and then just got hit with big selling. Another couple big gaps right up into resistance again. It's been hammered with big selling. I feel like I feel like this stock I feel like that is a double top. Like that is a sign of exhaustion of big sellers unloading shares and it looks like it's already kind of more so breaking down. You just draw a line across here. It does not look good. And generally the depth of whatever this this is, I mean, this is the most basic technical analysis you can do, but the the height of a topping pattern, you can usually flip that to the downside, and that brings us down to 440, which brings us into this little cluster and these previous highs. Uh, so that'll be a pretty big unwinding in Microsoft. And um this this is this is these big companies. Some of these big companies when they sell off, you know, 15 or 20%. And a whole bunch of them do it at the same time. They're kind of all the same trade. It that this is what causes that 15 to 20% pullback in the stock market. Um so that's that's what people need to be aware of. You need to have an exit strategy. If you're not out already, you need to protect your capital because eventually one of these pullbacks in the stock market isn't going to be just a buy the dip and hold on and you'll be fine a couple months later or a couple weeks later. It's going to be uh you're going to buy the dip, it's going to keep falling. You're going to lose half of your portfolio. You've just wasted three to five years, maybe even longer. Uh and so that's what I focus on. like how how can somebody protect their capital from dev, you know, having it devastated and changing your lifestyle and we got a lot of big signs in these big tech and AI companies that are not looking good and they are going to crush the equities market when they when they fall. >> Yeah, just one comment on this Microsoft chart. It does look like it's a lot more advanced to the downside than those other charts we looked at, Nvidia, Micron, and SanDisk. And it looks like maybe because of all the circular financing that's been going on with OpenAI and so many other names that that's why uh large institutional investors have been selling this name. Do you see the possibility there's a gap down there that we saw back in April May. Do you see the possibility of the stock going down there and filling in that gap on the downside? Yeah, I I think I think if we go into a bare market and and finally we have like a financial reset, I think I mean we can zoom way out. I think stocks are going to go way beyond that. I think I think we could see I think it will the market will probably want to pierce this low. It means it's going to want to come all the way down into this level, break this low, which will create another big wa massive wave of panic selling this this level here. I mean, the market loves to apply maximum pain. So this is a very critical turning point where it became major resistance was major resistance now became massive support. If we go to a huge recession I think we'll see Microsoft want to break this low and anybody who bought through this whole phase through here are going to be looking at that low saying if it breaks that low it's like oh my god this is going to be brutal. So that's what will create a probably another wave of selling which will potentially want to pierce this next low down here. The markets are always trying to make higher highs or lower lows. It's trying to break standout highs and lows. So, I think we could see a huge haircut across the board. I don't care how good the companies are, and I I've done this many times in detail about dividend stocks and the dividend sector ETFs where you focus on, you know, most people focus on big dividend companies. They get hit the hardest. And even though they're the some of the strongest companies, pay the most money or rock solid, the share prices still get absolutely annihilated. And it's because the mo most of the money in the US equities market are baby boomers or they're 50 plus people with money and they they're all invested in the same stuff, right, Jim? They're all invested in dividend stocks and they're diversified across a bunch of stuff, but they all are also in the same boat. So when they all start to panic, when things sell off enough then and they feel like their lifestyle and their life savings are threatened, they all start to call their brokers and start to sell positions. and they all own the blue chips and the dividend stocks which are the Microsofts and all of these right so those stocks get hit really really hard right when you think you've got the best company you realize you're holding one of the most volatile ones and we saw this during COVID stock market pulled back 35% well if you own own dividend stocks they pulled back on average over 40%. So, these so-called safe companies to get a yield carry a lot more volatility than most people expect. And I mean, that's that's, you know, I just I'm not a big fan of diversification. I'm not a fan of buy and hold. I'm not a fan of holding dividend stocks if you've been buying them in the last, you know, 5 10 years. I think you they're great to buy after a recession because then you're making 8 to 15 plus% return in your dividends plus lots of upside. But holding dividend stocks right now are a ticking time bomb for a retiree. >> If you're looking for a simple, secure way to invest and own physical gold and silver, visit our sister company, Hardass Assets Alliance, at hardassallalliance.com. That's hardassallalliance.com. >> All right. So, let's just make the assumption the markets are going to come under pressure here in the next few days or the next few weeks. We got to put our money somewhere. if we take it out of the S&P and the NASDAQ. You mentioned gold. It's up 50% on the year. What are your thoughts on gold now? Do you think there's more room on the upside or do you think it's going to be it's going to come under pressure like so many other asset classes right now? >> Yeah, I do think I think gold is going to um I think gold's going to go a lot higher. I think, you know, in 2007, we saw very similar price action in terms of what the S&P 500 did, what gold has done, what the US dollar is doing. Plus, the sentiment is very similar. People um have been very bullish on equities. They're really super bullish on the precious metal space. Uh the dollar is super hated. I think what, you know, I think you just kind of nailed it there, Jim. I think we're going to see, for example, the the blue line I'm about to draw would be the stock market starts to sell off 5 10 15 20%. And the money is going to come out of equities and money is always looking for a return on investment. So, it's going to go in out and search where can I put my money and precious metals have been the one of the top performers. So, all that money coming out of equities is going to send gold sharply higher along with silver, platinum, platium and miners. And I think we could see gold round to about 51 or 5200. So we're looking at about 27 30% to the upside for gold. And this this could all happen really within a two or three month window potentially. So we're very close to another explosive move in this space. Silver's very similar. I think silver could run 50 plus percent up into like $82, you know, an ounce fairly dramatically if this unfolds like I think it's going to unfold. So, if we do get a pull back in gold, uh I'm sorry, where's the 200 day line? Let's just assume that's where we're going to find support. >> Yeah. Uh well, I don't know. Yeah. I mean, that that would be a very good support level at this point. That's way down here at 3500, which is also the breakout zone. I don't I don't see gold pulling back down there. This this blue line I just drew here, that's me just drawing what the if the if this was the S&P 500 selling down, all that money would be going into gold. So don't don't look at don't look at that. That's not what I'm expecting of gold. I'm expecting gold to go higher as the stock market goes down. >> And I'm sorry you mentioned in 2007 when we saw the finan great financial crisis. Uh what happened to gold then in 0708? >> Yeah. I mean if we if we look what happened back then we can I'll just pull the chart up so you can get a visual here. So for for example, if we just go back to 2007, 2006, 2007, stocks rallied up to all-time highs. Gold rallied to all-time highs. The right-hand chart is exactly where we are right now. That yellow line is gold. The candlestick chart is uh the S&P 500. So we started to see some weakness right here in the stock market. We're just starting to see some weakness right now in current day price action. And as the stock market in 2007 sold off 20%, all of that money went into gold and sent gold higher. So I believe we could see something very similar. The stock market starts to sell off. That money then suddenly says, "Hey, I'm going into gold." They buy gold, silver, platinum, platium, and they start to to rocket higher. And if we look at these charts, like just take take a look at um what what has happened here in terms of these other asset classes. So if we look down here, we got GDX which is gold miners. We got silver, platinum and platium. And in this very similar scenario in 2007, we saw a lot of money move into gold miners. It got the attention of investors and then it had a pullback. We saw the same with silver and we saw with platinum and we saw with platium. And if we go and we look at where we are right now and we just look at that chart, everybody has piled into miners silver uh platinum and platium. And what happens after this is the stock market, if we look 2007, the stock market starts to sell off and we end up seeing the precious metal space, all of them rallied 30, 40, 50, 60% from where we are right now. So I I really like precious metals at this this kind of junction in terms of over the next one to three months we could see a very strong parabolic move in gold and silver that I I think should eventually be sold into because I do think it'll get sold off because what'll happen is eventually we'll see the stock market sell off which it you know last time it did this it sold off about 50 plus percent and gold and silver sold off as well. they'll eventually get pulled down with the fear and with the mass selling in margin calls and gold pulled back 34% which isn't massive compared to you know 20 55% in the stock market but silver pulled back 60%. And platinum and platium pulled back like 60% as well. So this is the sweet spot I think for metals an upside trade in metals. Um, it's a trade. I think once we have this blowoff phase, I I'll be looking to liquidate, close out a lot of a lot of my gold position, more or all of it, and then look to reinvest later once I think it's, you know, the airs come out of the precious metals bubble at some point. >> And I know you trade ETFs, so you're long GLD or the Fizz. >> We we've we've I mean, for when it comes to precious metals, I only I have physical uh gold and silver only, but um we do trade GLD. We did a we did a GLD trade just recently which we've we've closed out. We we did a very quick trade right here. We we played the breakout. We got out right here on this peak. We hit our 15% target. And so that was a quick quick trade using an ETF, but uh I only hold physical metals in terms of uh precious uh precious metals going forward. >> So you don't own any miners? >> No. No. There'll be a time like I I believe that when when we see gold have this correction, this this eventually once gold tops out and then we see a big sell-off, that's when I'm going to be excited more so for miners. I think it'll be something similar to this. If we go back in time to um 2008, which uh have to zoom way back here, I think we're going to come into So, in 2008, we saw gold pull back 34%. And that's what I'd be waiting for is for for gold on the current price chart to top out at 51 52 somewhere and then sell back down. And then I'll be looking to get into gold miners somewhere down here because then I believe we're gonna have a multi-year like that's when we can see gold and silver really take off. I mean I think we could extend to like that 8 10 12 something thousand dollars that could go out for many years. And so this is this is the phase you know the last time I traded miners really was in this phase. I want to get into this new super cycle uh where gold and silver go up into the right forever. And that's when you can get into the miners and catch, you know, a lot of them will move hundreds and some of them will move thousands of percent in that phase. So I don't think we're minor have had a great run. They're they're still moving higher. But um before I I get into minors and trading individual stocks, I kind of wait for specific major setups uh to take place because I'm not I'm not a big stock trader anymore. I I really focus on managing ETFs and um not a whole bunch of individual little companies. And Chris, do you mind going back to the gold chart again? I just want to clarify uh where you think it's going. Okay. So, >> so right now you're still bullish on the gold price. >> I'm still bullish on gold. If we just take this recent, let me just clear this chart real quick here. If we uh use Fibonacci extension, we can we can get a gauge of where this next upside move should be. So based on the the recent rally and pullback, this is telling us we should be looking for gold to go around 5150 to 5200 uh somewhere in that range. And from where we are right now percentage-wise, you know, it's looking at about 26 25 26% uh to the upside. So that's that's where I think gold is going to go. The question is, is it going to do one of these? Is it going to flag sideways? How long is it going to do that for? I think it's kind of, you know, digesting this recent runup. The sooner it breaks out, the better. I'd like to see it turn a corner and start to run here into the end of the year versus drag out for a long time, but uh we just have to kind of wait and see. The the precious metal space did get pretty frothy right over here. we hit a Fibonacci target, which is where we we got out on our our gold trade. And after that, it just turned into a feeding frenzy that if people didn't have anything in metals, it was this this like week and a half, these two weeks where the whole world seemed to just want to pile in. They didn't care what price. And so, it got too crowded and now the market's shaking them out. And now there people are still nervous about precious metals putting in a top. So, it's trying to work that out of the system. Get all those weak hands out who give up on it. And then as soon as they get out, then we should start to see this run higher. >> I recently sat down with a money manager. He manages 10 billion dollars. He has a 20% waiting toward gold and gold miners. And in spite of the move we've seen this year on both gold and silver, he said none of his clients are asking about gold. No one in his office is really asking about it. And I thought that was interesting. >> Yeah. Well, I mean, when I when I say everybody wanted to pile into gold over here, it's not the whole world wanted to pile in, it's only the people who are open to the idea of investing in gold, period. It's a very small group of people. Most people don't own gold and they don't, if they do, they have a tiny amount of it and they don't look at it as a huge money maker. They just look at it as some barbaric investment, right? That's how a lot of the natural general public see it. Um, so you know, I think there'll be a time that eventually we'll see gold rally up and then potentially we go into a big pullback after we have some type of recession or reset. And then as it starts to take off and it starts to head up towards potentially like $10,000 an ounce or something, that's when the mass market actually start to get involved in it. And that's when we finally see like the average portfolio might have like one and a half percent or or 3% in gold. And that's when gold will put in a massive long-term high again. But right now, I mean, the majority of people who hold gold, like the the average percentage in the portfolio is like less than a percent or less than a half a percent. It's tiny. Like most people don't hold it. Um, all you know, so that's kind of where we're at right now. >> All right, Chris, let's take a look at silver. It's up 70% on the year. Everybody's making a big deal about it because it went through 50 bucks. >> Yeah. Yeah. There's there's a psychological level at 50 bucks, a h 100red bucks, right? every $10 is also a psychological level. Um, you know, you could argue here it looks a little bit like a double top, but um I I still think it's I still think the chart looks very strong. It has it has a lot of momentum behind it and it's just kind of working off a bit of an overbought territory. And I think it's it's also flirting and and messing around with this $50 level. So many people put so much emphas emphasis on, you know, $100 or $50 mark. And so I think there's just a lot of people buying and selling around this this $50 per ounce level and the market's just trying to figure it out and it's just kind of digesting it. But I do think silver will follow suit with gold and be up and to the right and have a fairly significant move. And even though it's up 70% on the year, we got to remind our viewers this is where it was in 2011. So adjusted for inflation, it's still down, you know, to where should it be probably adjusted for inflation? 75 bucks, 80 bucks an ounce. So it's still way underperforming gold. >> Yeah. And and my chart analysis, I think, points to it somewhere around 82 bucks an ounce, which if if it was to blow off and and shoot higher up there, I mean, that would put us right in line with where it should be, right? So, uh, you know, silver's got these very explosive moves. When you go back in time, you got to be aware. Like I'm always nervous of things that go straight up because it's pretty obvious what happens after that momentum comes to an end. But it doesn't mean silver's put in the top yet. Silver could still run, you know, up to it could have this crazy huge move somewhere up into this $80 per ounce mark. Some it'll dwarf all of these other ones. You know, it's so it's it's exciting. >> Okay. So, we can't have a discussion on gold without talking about digital gold or Bitcoin and it topped out at 125,000. It's now trading around 90,000 give or take. Who knows where it is right now as we speak, but it's down on the year. What are your thoughts on gold? I know in the past you've been negative on it. >> Yeah, I'm pretty negative. It's it's starting to look a little bit um like it's had enough of a move down that it's going to kind of digest things a bit. I I think we might be coming down into like one of these kind of phases, right, where it might mess around down here for a while and try and figure out what it's going to do. It looks ready for some type of bounce and consolidation, but it it definitely, you know, I think we could see this bounce up in here. And the big question will be, can it hold this level? If it if it starts to break down from here, we're going to have a very very big precipitous fall. We're going to have this huge huge amount of move that it's already come down. we're going to have a that that move, I think, unfold again to the downside, which will break this low, which will bring it down into this long-term support zone. So, typically, like the the way the markets move with kind of cycles, if it has like this this um cycle to the upside, well, usually it's going to keep having those similar percentage cycles to the upside kind of over and over again. But when it breaks down and and that cycle breaks, you pretty much take that momentum cycle back to the downside and and so you get not only the first cycle selloff, but then you get the second half. So it gives you twice as much of a move, which is obviously what clearly breaks a long-term trend from up to down. So I'm I'm shortterm I'm a little bit bullish on on Bitcoin. I think it might have a little bounce. Maybe the equities markets also have a little bounce. They're a little oversold, but I do think everything's going to roll over and then continue to go a lot lower over the next couple of months, which which kind of goes against seasonality. Seasonality for the stock market is is higher into the end of the year, but I mean, I've never traded based off seasonality. It's not very accurate. Uh, and Bitcoin moves a lot with the stock market. So, if AI and NASDAQ are going to like, you know, bounce and then sell off and go lower, Bitcoin is probably going to be dragged down with it. >> Yes, I've never traded Bitcoin, but uh I have to say I wish I did. But every time we see one of these pullbacks, and we've seen many of these pullbacks where it's down 20, 30, 40%, it just kind of finds a level and then it takes off again. I mean, it wasn't too long ago when it was at 65,000, right? and next thing you know it just rips to 125. >> Yeah, these these are long patterns though. I mean these are like uh you know it takes eight months eight nine months to unfold some of these or that's a long time. I mean I'm not a Yeah, but there's no doubt it's been in a strong uptrend and obviously when you're in an uptrend all these sell-offs eventually get bought back up. But again, if if the trend breaks, if we go into a bearish environment, this will probably be back down at like, you know, 60 or $40,000 next year. So, you don't want to be on the wrong side. You don't want to just buy and hope, you know, that's not that's not what I do. Eventually, a pullback turns into a crash and you just don't know which one it is and um it becomes very costly, not only for time, uh for money, but also more so time. you can waste a lot of time being stuck in a crappy investment and just wish you just sold it and uh moved on. >> Yeah, to me Bitcoin is just a leverage play on the NASDAQ and it appears right now the NASDAQ's under pressure. So, it's risk off and Bitcoin is just following that trade. Now, we can't talk about Bitcoin without talking about Micro Strategy, which is now called Strategy. And a big part of what they own on their balance sheet is Bitcoin. It peaked at $400 this year. Now it's at where is it? 200 bucks. >> Uh yeah, 210. Yeah. >> Okay. So, this this one kind of reminds me of the Microsoft chart because it was it's like Microsoft has been leaning on the downside and this one also is leading on the downside. >> Yeah, it's it doesn't it doesn't look the greatest. I mean, Bitcoin has lost a lot of its Bitcoin was a feeding frenzy right back over here. like I have a lot of different tools to get a gauge on how hot and heavy somebody is over a specific asset class and it was a feeding frenzy just just like this. Now, Bitcoin's last big bounce and rally and the strat this symbol moves a lot like it um is just showing there's not the same amount of interest. There's no volume. It's people are people have just lost their Bitcoin is not top of mind anymore. Yeah, everybody knows it, but it's not People aren't interested in it. I think a lot of people who are in precious metals went to crypto. Now it's like, you know, crypto's kind of losing its shine and now everybody's moving back over to gold and they want to be in something, you know, that's um uh that's that's performing, right? So, Bitcoin is definitely not looking good. This stock doesn't look good. I mean, I'm not I've never been a fan of this stock. I don't um I'd rather just trade Bitcoin versus, you know, someone with a a stock symbol based around it. I hate it when people hype stuff up. But uh so I mentioned Micro Strategy, but I believe I read there's over a hundred companies that have taking taken on Bitcoin onto their balance sheet just to copy the strategy that Michael Sailor has done. And it's amazing like there's so many landmines out there, right? And this could be a big one big one like uh Michael uh Michael Sailor just did an interview recently. He said his average cost of all the Bitcoin is 70,000. Okay. uh and we both know it can get there pretty quick, but uh >> you just don't know what's going to happen, right? And he's taken on a lot of debt to buy that Bitcoin. So, if we do get a ma major wash out in the S&P and the NASDAQ and Bitcoin, there could be a lot of destruction out there. >> Well, you you bring up a good point. I mean, typically once you have a whole bunch of people copying the leader, usually that move is pretty much done, right? So now everybody's doing the same thing as you just said and that means it's a crowded space. It's already over. It's a it's the same when you have a big move in a particular asset class like gold miners for example. Um just in 2011 you gold miners were on fire and you know a 3x ETF gold miner comes out. So you could you could jack it up and then of course the the whole spot the whole market kind of tops out. You see this all the time like when people start copying a strategy like micro strategy or or a sector or commodity does really well and then suddenly a leveraged ETF pops up for it like a 3x. I'm like okay now it's like it was hot everybody was excited about it. Now they're creating a tool to try and profit from it and that usually means the end is is near. And so that's I mean I think Bitcoin is done for a while. I mean it might bounce and rally here and there significantly but I don't know about going to alltime highs anytime soon. So, I'm always I'm always leerary once the mass psychology picks up and people start to copy and try to leverage the recent movement the because that usually that recent movement is a kind of a one-time thing. It usually fizzles out and it never comes back to life like it used to. Yeah. You mentioned the leverage ETFs. I had a conversation with a ETF PM last month and he said in one week alone in the month of October there was over 200 filings with the SEC for leveraged five times leveraged ETFs. >> Five times. >> Five times. And and >> that's not good. >> Yeah. And I'm not sure if you knew this, but there's a lot of ETF leveraged ETFs on single stocks. So AMD, Nvidia. >> Yeah. All of this just screams market crash annihilation. The poor retail investor who who doesn't understand risk management, who swings for the fences, they chase all the shiny fastest moving stuff. I mean, this is what the market does. It it literally herds people in, puts them in really crappy investments just like 5x and leveraged, you know, ETFs on stocks. All these poor retail investors just get lured in for big returns because they don't understand risk and they haven't maybe many haven't been through a bare market or a reset and then they just get blown up. It it's that's I'm trying to save people from doing that and it's pretty boring when you manage risk which is why it's either you uh love or hate my analysis. You either want consistent growth and don't have to worry about what happens. We don't really care because we can navigate it. or you know, you either like that or you think I'm the most boring trader ever and I don't have enough trades and I don't trade stocks and I all of this stuff. So, it's yeah, I can only help those who are open to, you know, protecting their capital, protecting their lifestyle, but the markets are going to do exactly what they do every time. They suck everybody in. People get stuck in crappy investments. They blow up and people lick their wounds and they hate the stock market for the next three or five years and they slowly limp back in over time, but they're damaged, mentally damaged from it. They're always scared. They're hard. It's hard for them to get back into the markets because they're scared they're going to lose again. And the damage the the damage that huge losses do to your psyche um really ruin you unless you you've got like a north like like a a star to follow somebody somebody or a strategy that can keep you on straight and narrow. >> Hey Chris, why don't we talk about bonds just because we're talking about defense now during the this market volatility and let's take a look at the TLT which is the ETF for the 20 year. It's up small on the year but what are your views on this? Yeah, I think I think bonds are trying to carve out a bottom. Now, I've never been an expert uh when it comes to interest rates and Fed and economic data. That's not my thing. I I just I don't see a whole lot of value in it. I used to do it years and years ago, but I always found it very random. When you look at just the chart of bonds, they look like bonds are trying to put in a bottom. Where I'm torn is I think we've got, you know, some people want a lower interest rate policy, but we also have an inflation problem. I do think the inflation problem will change fairly quickly. Um I think I think once the momentum in the economy turned down, people's wallets are going to snapshot. The gouging for services, the gouging for products, the high cost of everything, eventually things are going to have to come back down because they're just people are going to have to liquidate their inventory. they they're going to go out of business or they have to liquidate or they're going out of business. It has to get liquidated. So eventually there'll be some reset but so I'm really torn on bonds. I feel like we still have high inflation so rates aren't really going to budge but then we also have somebody wanting you know lower interest rates which if interest rates go down then TLT should rally. So to me it is in what is kind of known as a stage one. If we just look at this you and I have touched on this many times. The stage one is is really kind of a sideways trendless. It's red on my charts here because it's it's a basing formation. It's trying to figure out what's going to happen. And bases can last years. And so it's dead money. And and I'd rather I'd rather put my money somewhere where there's no downside risk and earn a yield than hold on to something that potentially rates could go up and bonds could go down or some some maybe trust in bonds drops dramatically and we see the bond price drop. So I would steer clear of bonds for now. I'm not a big fan of them. And um once they do pick a new like once they put in a bottom and start to trend higher, I'll like bonds again. if they're trending up, I want to own them. Generally, if if the stock market gives us a sell signal, you move over to bonds, and bonds should go up. And we've been seeing that relationship more so in the last few months than we have in a very long time, in years, which means stocks go down, bonds go up. And so, that's kind of kind of um what I'm waiting for. So, I'm steering clear of bonds for now. Okay, Chris, that was a great overview of the market. It looks like we're you're expecting some trouble here in the uh next couple of days and it's going to be interesting to see these Nvidia numbers out tomorrow. If somebody would like to get in touch with you or check out your various services, where can they go? >> Yeah, the best spot would be go to YouTube, my channel, the technical traders, or my websitethetnetraders.com and I share daily analysis videos. I cover what I'm doing with my portfolio, all my specific trades, all of that stuff. So you can you can learn how to read the charts, you can follow along, and you can copy the exact same portfolio allocations and trades that I do. >> Chris, once again, thank you. >> Thanks, James. Always a pleasure. Take care. >> Don't forget to sign up for a free portfolio review with one of our endorsed investment partners at wealthon.comfree. With markets hitting all-time highs, now is a great time to stress test your strategy and be prepared for what comes next. Thank you all for watching. We'll see you again next time.