'It's Almost Over': 60% Correction Next In This Asset Warns Trader | Chris Vermeulen
Summary
Precious Metals: Guest sees a near-term blowoff phase with silver holding above $100 and gold pushing toward $5,200+, but warns of a 30-60% correction afterward.
AI: The AI trade looks frothy with momentum stalling, VC flows slowing, and data centers facing funding pushback; a 20%+ drop in the Magnificent 7 could pressure indices.
Rotation Dynamics: Initial equity weakness could see capital rotate into metals, but a second leg down in stocks would likely drag metals lower too.
Gold Miners: Miners have surged (GDX 3x), offering leverage to gold, yet sentiment appears crowded; short-term upside remains before a sharp correction and later opportunity.
Bitcoin: Prefers short-term downside in Bitcoin (~30%) and favors gold over Bitcoin due to lower volatility and stronger uptrend characteristics.
Rising Rates: The 10-year yield could trend toward 8.3%, risking bond market stress and fueling safe-haven flows into metals during the initial market selloff.
Portfolio Stance: Defensive posture with increased cash, reduced tech exposure, and a focus on owning assets in clear uptrends (including physical gold).
Risk Management: Emphasis on trend-following, scaling out into strength, avoiding high-leverage ETFs, and using disciplined position management and compounding.
Transcript
we could see a 30 to 60% correction in metals. I believe it's very crowded suckers who are going to get squeezed in and buy in this feeding frenzy and drive it higher. You do at some point have to be like, okay, it's almost over. I was uh looking at the 10-year yield the other day. I mean, if you look at the monthly chart, it's pointing at 8.3% interest rates, which is obviously going to wreak havoc on the debt. >> It's pointing at how does that >> mean by the interest rate chart when you chart it out, it say we're going to 8.3% interest. >> Wow. And obviously that is going to wreak havoc with the debt problems. I want to own things going up because I want to benefit from the trend that it's in. Bitcoin is going down. I don't want to hold an asset falling. I'm here at the Vancouver Resource Investment Conference. And joining me live for the first time in a year is Christopher Mullen, chief market strategist at the technical traders.com. My regular viewers will recognize Chris as a regular guest who's on the show a couple times a month and first time having you live since last VRIC last year. Lots has changed in the markets. Welcome back to the show. Good to see you in person as always, Chris. >> Always a pleasure. >> I was just joking with you offline that the fact that you're not in a suit is that a market indicator is a topping indicator. Exactly. >> But all jokes aside, what are topping indicators for you? >> Yeah, there's a lot going on for sure. I mean when we look at it from a big picture topping indicators to me are obviously the precious metal space spiking that usually tells us the the world is nervous about something governments currencies systems there's wars going on so precious metal spiking isn't just a North American thing this is telling us the whole world is nervous and something is up right so that's the biggest warning sign but there's a whole bunch of other ones which when we look at it I would say the AI space is definitely one of them if you look at the Magnificent 7 we've seen those as a put in a very big topping formation. It looks like it's on the verge of breaking down. We've seen the AI space kind of lost quite a bit of its shine. I mean, we saw record amounts of money flowing into that space, investment capital, not just in in Nvidia stocks and things like that, but in the venture capital space, everyone wanted to own a piece of an AI company. >> And that has slowed down. We're starting to see data centers getting rejected from banks for financing because it's just gotten so frothy. uh we've seen just you know the momentum in that space has stalled and I think when we see those companies start to roll over and move down they're going to drag the overall indices sharply lower and it's going to change the tide. A lot of people who got into the AI space chase pricing higher and of course when it rolls over they're going to also start to panic and usually it creates a very precipitous fall. We saw this even last year in February with the tariff selloff. The Magnificent 7, they fell like 20 plus% as a whole. I think we could see that again very easily. The big question is, is it going to find a support and rally again or is it going to break down? And I believe we're probably going to see it actually maybe find short-term support, but I do think we've probably seen the equities markets or the Magnificent 7, I think, put in a top and we could go a whole lot lower after that. >> I want to come back to the stock market in just a bit, but let's transition to metals. Now, we are at the resource investment conference. But I had you on the show last week, uh, virtual interview right before silver topped at $100. Well, not top re right before silver reached $100. And you were giving me your silver price targets cuz it was very close to 100 at the time and it finally hit it. You said $130 might be uh your next upside target. Now that silver has hit $100, probably sooner than both of us expected because I think it happened a couple days after our conversation. Are you still maintaining $130? >> Yeah. So, I think I think the the technical target based on the charts was pointing to $106 and we're almost there. Yeah, >> I think we could see things blow past that. I think we're in this feeding frenzy mode. Silver could spike to 120, 130, 140. We could see a very big parabolic spike. It's kind of one of those last pushes and I think gold's going to do something similar. Right now, silver has about 3% upside for my target based on technical charts where price should go after that. It's however sentiment takes it after that and I think we could see it go higher. Uh obviously we're in this feeding frenzy right now and I think it's actually still picking up speed. Yeah. >> So um I think people are going to be pretty excited to see where silver is probably in a week or two from now. >> Well, the fact that you think the uh AI tech stocks might correct at some point due to the reasons that you stated, how would that sector affect the metals if at all? Well, if we start to see money flow out of AI stocks or the stock market in general, it's going to go looking for a return. Money is always looking for return on investment. And whatever is performing the most, the best of the time usually gets the majority of that money. So, if everybody who is in AI starts to move out of the stocks in that space, they're going to look for what's hot. Where can they put that money now that they don't believe in the AI bubble? They see it going down. It's probably going to move into precious metals. And this is what we saw back in 2007 is we saw money start to have mass exodus from the stock market and it all just was flowing right into the precious metal space. And the metal space is a very tiny pocket in the in the in the whole picture. It's very small. So when you have trillions and billions of dollars piling out of the stock market every day and it's looking for money and it moves into the precious metal space like miners and and physical metals, they move very quickly. So I think that's what we're coming into is where is the peak going to be? you better be long metals because I don't think the rally is over yet, but it's we're definitely seeing signs that we're close to, I think, a significant high in precious metals. >> You're talking about a slower rotation though into the metals. What about when there's a fire sale? >> I I'm saying if the stock market sells off over the next one or two months, Yeah. >> we're going to see gold and silver and platinum and platium skyrocket for the next one or two months. Even though in the past like in 2008, 2020, even 2022, the sell-offs in stocks at those times coincided with the selloff in gold and silver initially, >> right? So the initial move down say say Magnificent 7 stocks fall 20%. That that fall in the stock market that first move is going to go into precious metals. Now, if if the Magnificent 7 or the stock market doesn't find a bottom there, it trades sideways and then it starts another leg lower, that's when metals are going to fall because that's when everybody now is actually starting to sell. There's going to be net selling. There's going to be fear, margin calls, all of that stuff. So, the first move down in the stock market is going to fuel precious metals. If the stock market fails to recover, when the market starts to fall again, equities, it's going to pull the stock the precious metals down with it. Last time we saw this, gold fell 34%, silver down over 60, platinum, platium, both over 60 to the downside. And it's just really there's going to be a lot of selling pressure and a lot of air let out of this bag. >> Overall then, what is your sentiment as an investor? Are you more defensive or are you more cyclical and risk on right now? >> Uh, we're very defensive right now. So, we've recently moved some money to cash. We're still long equities. We're still long precious metals. >> Some money to cash. Like percentage wise, how much? >> 30 30% of our portfolio. Okay. >> We've recently sold out of the QQQ. We wanted to get away from that space. >> Well, that's interesting. You're usually 100% were zero, >> right? >> Well, we we split our portfolio up between the SP 500 and the QQQ. >> Okay. >> So, actually just recently we we liquidated our QQQ position and we're actually um we're 70% cash in terms of that portfolio. We're still long equities and we actually have uh physical gold as well as a as a play here. >> Okay. >> So, we're very defensive. >> Okay. Some people might say, "Chris, when are you going to stop being a perma bear?" How would you respond to that? >> Uh, after we have a financial reset, I won't be a perma bear. We've been in this this phase for a long time. And eventually when we have a reset, it's just a matter of time. Then I'm going to be pretty darn excited because >> But just help us understand your psyche here because we we're at a point where not only have the metals climbed 50% year-over-year of the last two years, by the way, last year when I interviewed you was at 3,000. The year before that in January it was at 2,000. That's literally a 50% gain year-over-year for 2 years. And the stock market as well, maybe not as much as gold, but it's gone up tremendously. Now we're at 7,000 points. The S&P 500. How could you remain defensive when there's so much euphoria right now in everything? >> I mean, we just went defensive a couple days ago, right? So, this isn't like we've been sitting in cash. >> We have been playing the upside the whole time. We the market run the stock market goes higher and it shows a strong trend, we jump on. And so, we do ride it higher. Yes. I'm always bearish because I'm trying to get people to protect themselves, figure out if they have a plan or not, cuz when the music does stop and things turn down, the initial drop is very fast, very painful, and it's usually big enough that when people take that first hit of 20% or more, then they get into this phase, they're like, "Well, I'm down so much now. I'm just going to have to ride it out." Meanwhile, they don't realize there could be another 30% loss on top of that, not to mention wasted years for the market to recover. So, I'm just trying to get people to notice notify like understand that not everything always goes up and as much as you like it and everybody's bullish precious metals and stocks here. There is going to be a time when they're not favorable and you don't want to own them and you need a way to identify and a way to to benefit from when they they collapse. >> Before we continue with the video, let's talk about a company that's building serious gold leverage for the long term. Our sponsor today, Stellar Gold, is sitting on three major Canadian projects. Tower and Colomac are among the largest undeveloped gold sites in the country. The Tower project alone could be worth $2.5 billion after tax at a $3,200 gold price assumption. And the prices go higher, so does its value. Colum expands over 1,000 square kilmters of Greenstone deposits and could be Canada's next big gold camp. They also have Holler Tailings, a cleanup project that could deliver near-term cash flow. Across all projects, they've drilled over 16 million ounces of gold, which would cost over$2 billion dollars to replicate today. With a seasoned team, Stellar Gold is one company to watch. Scan the QR code here on screen or visit stellarold.com/davidlin to learn more. Let's talk about market momentum and use gold and silver as examples. So, $5,000 intraday gold where gold traded to $5,000 intraday and then we're at $101 silver. First of all, uh two observations. One, silver tested $100 and stayed above $100 while gold did not stay above $5,000. So, there's a lot more resistance in gold than silver. That's number one. Number two, uh the momentum in silver in the last couple months has been a lot stronger than gold. Yeah. Uh what do those two things tell you? >> Yeah, silver silver's holding up. Silver's got a lot of momentum as you just mentioned and it's kind of a feeding frenzy in there. So, it's it's it hit that $100 kind of whole number, that mental resistance level. A lot of people will say, "If it hits 100, I'm going to sell." >> Silver held above that and closed. And I think that has to do with it's a small market and a lot of people are catching on to it. And even if people were selling at the 100 mark, which we saw heavy volume, there's still a ton of buyers jumping in because it hit 100 and it's getting people with FOMO and people who are new to it saying, I I want in before it goes even higher. So I think there's enough momentum in silver to keep pushing and holding it through that resistance. Gold is a slower moving beast. 5,000 is a pretty big number. It it just has a bit different characteristic to how it moves. But gold definitely has a lot of momentum here. Um I think it's I think it's going to break 5,000. I think we're going to 5200 here probably in the next week or two. So it's still got a lot of momentum, but it just hasn't cleared that that whole number of 5,000 yet. >> Do you think the whole metal space is a bit overcrowded right now? >> I do. I think it could still get over more overcrowded. I don't think we're quite in that euphoric blowoff phase. I mean, I think we're close. I think we're like weeks away potentially from a huge spike in gold and silver, >> but I mean it could be very shortlived. It'll be swift. It'll feel good. But >> one of the biggest challenges for a trader or an investor right now or both is exactly what you just said, deciding whether or not to get in when prices are elevated, things look expensive, but there's still this hope that it could get even more overvalued. >> Yeah. >> How do you walk us through how to resolve this mental discrepancy here? Yeah, at some point you do have to be happy with a gain. I I was talking about this with uh subscribers in our mentoring session last week, which is at some point if you've got huge gains and things are looking frothy, like right now I believe silver and gold are in a the final push higher and I think we're going to see them peak out and we could see a big correction. I think we could see a 30 to 60% correction in metals. And so knowing that and the sentiment where it is right now because I believe it's very crowded but I do think there's still more hate to say it but like suckers who are going to get squeezed in and buy in this feeding frenzy and drive it higher. You do at some point have to be like okay it's almost over. I'm going to start protecting and start to scale out of these positions and lock in some gains. And it's to at some point you just have to be happy by leaving a little bit on the table. bubbles like what we're in right now where silver, if you look at the monthly chart, it's gone straight up. At some point, it's probably going to have a very sharp correction and come straight back down. And you just have to be happy saying, you know what, I caught a huge chunk of this. I don't care if it spikes up temporarily a little higher without me. I want to lock in some of my profits. And that's where we're getting close to is I'm about to start trimming off some positions as soon as I see some more significant signs that it's um getting closer to a peak in this bubble. Bubbles are very hard. you can't really predict them and you don't know where the the p the top is. So, at some point you just start scaling out when you're satisfied and you're not going to panic if it keeps going higher without you. >> Yeah. Is there anything right now that you would go all in on long? >> There isn't. No, we're um I'm nervous for equities. I'm nervous for precious metals. >> There isn't anything shiny. Believe it or not, one of the other things that actually looks like a good trade is actually like an inverse ETF on Bitcoin. I was talking about this the other day. I think it's BITI. >> It looks like Bitcoin could fall about 30%. >> Well, Bitcoin's down again. I think, let me just double check the price. It was at $83,000 when I spoke to you a couple days ago. Was at 90, right? And I think today it's at uh I'll pull that up real quick. Yeah, 86,000. >> Yeah, it has a very big bearish pattern. And if the stock market tops, I think precious metal or Bitcoin is going to go down with it. So, out of all the plays, Bitcoin I think it'll be one of those very swift moves. We've traded Bitcoin in the past. We traded it um the last move was about a 40% move uh that we caught. This one is about a 30%. And what I like about Bitcoin is it's a very mass psychology play that when it starts to break down, that group of people s most of them tend to just bail and sell and it creates a very swift move so you can hit your targets, hit your lock in profits quickly. >> I I and I like that for Bitcoin. So that's I wouldn't say I go all in on it by any means. It's a small trade, but it's one downward play that I think um it's got some good potential. >> Well, you're cautious on pretty much everything we've discussed so far. If you have to choose between Bitcoin or gold this year, something something that would outperform in 2026, which would be more likely to outperform? >> I would say gold. >> Even at $5,000, >> I would gold to me is much more stable. It doesn't It doesn't drop 20% a day like Bitcoin do, right? So even a big correction in gold is like 34%. Like that's a pretty darn big correction for gold. Bitcoin can do that in a few days. >> And I believe in in physical metals. I'm not a big crypto guy as most people know. So I like to invest in stuff that I believe in that I believe has, >> you know, solid value. >> So that's where I would go. And I think longterm I think gold's, you know, going to be breaking 10,000 and beyond. But there's a roller coaster ride in between now and that high target. Let's just forget the fundamentals and just talk about gold and Bitcoin from a purely technical perspective and price move perspective. If someone were to say to you asset A in this CO Bitcoin is down 30% from its top. So it was at 120. Now let's just round it down to 80,000. That's a 33% drop. >> Yeah. >> Um from its top whereas gold is at historic all-time highs and it just keeps pushing all-time highs pretty much week after week. Just from a technical perspective, if you were to compare two assets that's down 30% from its highs or something that's keep that keeps pushing all-time highs, which do you think has more of a chance >> to rebound to or I guess uh you know has has more upside from here? >> Yeah. So, I flip the script. I do the opposite of most people. Most people like to pick bottoms. If it's pulled back, a lot of people think, "Oh, there's opportunity to the upside." >> I don't do that. I want to own things going up because I want to benefit from the trend that it's in. Bitcoin is going down. I don't want to hold an asset falling. So, that's the way I look at it. I would much rather own something going up because who knows, gold might not top till seven or 10,000, right? That's why I'm bearish on the equities market, but we're still long. Just because I think it's topping, doesn't mean it is topping. And we have to follow the trend. So, to me, I would much rather own gold. It's less volatile. It's in an uptrend. Those are the two things that I find value in. And even if there is a big pull back in gold in in the markets, uh, Bitcoin is most likely going to have a bigger correction anyway. So that's kind of where where I stand on that. >> Where do you stand on the miners? The fact that I was just looking at charts with you offline. GDX, the GDX index is up from 33 something dollars last year, exactly 12 months ago, to now $107 a share. >> That's 3x in one year. Far outperforming gold. Usually when something that has a higher beta to the underlying asset outperforms it by this much, does that signal to you the beginning of more upside momentum or a top? >> Yeah, there there's a tipping point there where >> and by the way, just let me add more context before we continue. Last year in 2024, the year before, the biggest complaint I've gotten was where is this leverage? Because gold was going up 50%. Then the GDX was still flat and all of a sudden it's going up 3x more than gold. So, >> I mean, the miners are doing very well. They've been on fire. They're they're they're playing catch-up significantly now to gold and and performing very well. >> I I like miners, but the fact that they have all taken off and we're seeing silver go parabolic, there's a common kind of move here where everybody's kind of just piling into the space. So, I feel like it's pretty frothy. I think miners still have some upside, but overall, they've had a huge chunk of their move. And I know a lot of people have held miners, you know, from the 2011 market peak and really when you look at the monthly chart like from silver and and gold and um miners specifically, they've held for like a decade and and then in a few months finally there's they've got these big returns and because they've held it for 10 or 13 years, a lot of people think that this this move that's only really a few months old is just starting. It's just the beginning. But to me, I actually all the signs to me are saying, "Hey, you know what? I think we're about to actually see it come to an end. And usually when everybody's super bullish and think it's just starting. Usually it's coming to an end. So from a psychology play, I think miners are I think they're they've valued in the current price. I think there's a bit more upside, but uh I'm nervous. I think they're going to have a big correction. Uh which is going to be an opportunity. I think that this next pullback is a huge opportunity because once we have this pullback and say a financial reset be like 2009 to 2011 again. It'll be people won't focus so much I think on physical. They're all going to be focusing on the miners >> and that's where I think you're going to get the big leverage play in that space which um is going to have some big opportunity. >> Tops and bottoms are usually very difficult if not impossible at the time. Exactly. So once we do have a correction at what point will you start taking action? Let's say gold starts correcting by the order of 30 even 60%. At what point in that chart do you start to either sell >> or make the decision that it's gone down enough? Like how do you approach a big correction? >> Right? So when the price is going up, obviously we follow price from a technical standpoint. So price action has to be an uptrend. If the trend starts to go sideways for too long, it loses momentum. We've got about 12 different things that we track. We've >> intermarket analysis, a bunch of different assets. We use cycles, we use time, we use uh price trends, all that stuff. So when price starts to go sideways or starts to break down, lower highs, lower lows, that trend is over. It's not going up anymore. >> So that is that's one of the things that'll kick us out of a trade. We also have position management. So if something falls, say 5% or something, it'll trigger our our strategy to say, "Hey, this trade just isn't working out. Let's cut our losses. Wait for a fresh new setup." So sometimes we don't even have to wait for the trend to turn around. we just need a pullback of a certain significance that is telling us that there's a few things underneath the hood that are showing weakness. So, we can sometimes have six or seven indicators saying gold looks like it's going to top. And you know, just because we have those doesn't mean it's topping. But our strategy could tell us this trend is slowing. It's stalling out and we might actually get out before price actually even drops. We've done this many times in the equities market. Our system has a way of identifying money flows and trends internal. The the market internals tell us is this a a pause or has it actually totally lost its mojo and it's about to head lower. So >> it comes down to price action and then position management. There's those two triggers. Yes. >> Um at a conference like this, what kinds of questions would you ask people or miners or even just attendees on the floor uh in order to gauge market sentiment for yourself? >> Yeah, good question. I mean, it feels like everybody here's pretty darn bullish on metals. I don't know if people are going to like my presentation where I'm talking about the peak potentially coming in metals here. >> Well, I think that's important because sorry to interrupt, but I had a few people just walk by and maybe it was a Freudian slip, but they were saying, "Hey, I love how they timed a conference at the market top." And I said, "Well, why choose that word? Why it's gone up, but why do you think it's a top?" So, I think that presentation that you're making is really important for a lot of people. >> Well, that sparks another idea, David, is you were talking about the miners. What's, you know, right now we're actually starting to see some new mining ETFs come out. I'm seeing proposals for like a fourleveraged mining gold mining ETF. If you go back to the 2011 peak, we saw a whole bunch of leverage precious metal trade uh ETFs come out. Usually when something is hot for long enough, financial institution creates a product that they can sell off to people and it's usually too late. And so that's one of these other warning signs here is a forex leverage ETF on miners and man that is going to hurt when it falls 25%. >> Forex leverage long or short >> long. Just on that note, do you ever trade leverage products? >> No, not anymore. Not so much. No, >> you're not supposed to hold those, but you could hold, you know, trade them intraday or whatever. >> Some of them you can like a 2x leveraged on the indices is perfectly fine. It's the 3x um which really aren't 3x anymore. And there's there's a whole margin problem with that. Believe it or not, you can get a bigger position with just a straight up position in non-leveraged than um a 3x leveraged position because there's like three times the margin, right, >> requirements. So, you can't actually get a big enough 3x position to equal your whole portfolio and then you have time decay and they they lose value. Leverage ETFs aren't the greatest. 2x are okay to hold for a couple of months, sure, >> but that's about it. >> What are some ways you can build your own leverage then? I I well I mean that's what miners are for right you can either own gold or you can move into the miners but there's a certain window where miners have leverage and they don't it's a small window right now we've seen miners in the last year just rocket higher so they've been providing that leverage play um other than that you know in order to get leverage you either have to use margin so borrow money and buy more or you need to you know buy futures or a leveraged ETF really >> what's your take on bonds uh in the last couple weeks uh the 10ear and 30-year Treasury Yields in the US have continuously gone up. Uh Japanese JGB 30-year spiked to new alltime highs last week. So, uh not off to a great start. >> No, I was uh looking at the 10-year yield the other day with members. And I mean, if you look at the monthly chart, it's pointing at 8.3% interest rates, which is obviously going to wreak havoc on the debt. >> It's pointing at eight. How does that >> the interest rate chart when you chart it out, it's saying we're going to 8.3% interest. >> Wow. And obviously that is going to wreak havoc with the debt problems. People aren't expecting it. I'm not saying it's going to happen, but that is what the chart is pointing to, which means we could see the bond market collapse. And I mean, we got European countries pretty pissed off at the states talking about dumping bonds. Who knows what's going to happen? We are in some unique times. There is a reason why gold and silver are skyrocketing, right? >> You think that capital is going to rotate to precious metals or something else? >> I think a good chunk of it will. And and that's the question is we're in this bubble phase for precious metals. Like where does gold peak? Does it peak at 52, 62, 72? Who knows? It's a tiny market and the whole world's getting nervous and there's going to be probably a lot of liquidation maybe between bonds and equities. It's going to go into the precious metal space. It already is crowded, but there's room for a lot more I think uh before it peaks. >> Let's close on on this note. So without looking at the charts, are there any other market movements or perhaps headlines that would signal to you that gold is topping? Perhaps let's say bonds are doing better, yields are falling, or perhaps if equities, let's say counter to your thesis, continue to go up. I'm just making some examples up. >> Yeah, I'm not sure. I don't I don't really think there is. To me, the biggest barometer is when everybody's talking about talking about it and people are investing in it who have never invested in it before. That's usually the the last, you know, the last kind of hurrah, the last push, maybe a couple weeks away. So once I see crazy stuff on the radio and stuff like I don't follow news too much. >> Yeah. >> But um it's really it really comes down to mass market participant when everybody wants it and holds it. Who else is going to buy it? Who's open to it? Right. >> Well, uh before we go, tell us about how your strategy works overall and where we can learn more. >> Yeah. So my strategy is pretty straightforward. I use a strategy called asset revesting. It uses compounding. So we have 5 to 12 trades every year navigating the markets with ETFs and each trade compounds its growth on top of the next. So we have small high probability winning trades that just keep compounding on top of each other. We rotate between holding equities, bonds, the US dollar or inverse US dollar ETF and cash. We rotate through those core assets and we only hold assets going up. If they're not, if nothing meets our criteria, it's not moving up or strong enough of a trend, we sit on the sidelines and we wait. We wait in cash about 40% of the year sometimes where we have no position by just earning interest on waiting for an opportunity. And by doing that allows us to, you know, avoid a lot of the the noise and volatility in the markets. We don't hold things going down and we're holding the best asset, the strongest one at any given time when something is firing and working well. >> Okay, good. Well, we'll put the link down below, so make sure to follow Chris there. Thanks so much, Chris. >> Thanks, David. >> Yeah, appreciate you coming on live and thank you for watching. Don't forget to like, subscribe, follow Chris. The links down below.
'It's Almost Over': 60% Correction Next In This Asset Warns Trader | Chris Vermeulen
Summary
Transcript
we could see a 30 to 60% correction in metals. I believe it's very crowded suckers who are going to get squeezed in and buy in this feeding frenzy and drive it higher. You do at some point have to be like, okay, it's almost over. I was uh looking at the 10-year yield the other day. I mean, if you look at the monthly chart, it's pointing at 8.3% interest rates, which is obviously going to wreak havoc on the debt. >> It's pointing at how does that >> mean by the interest rate chart when you chart it out, it say we're going to 8.3% interest. >> Wow. And obviously that is going to wreak havoc with the debt problems. I want to own things going up because I want to benefit from the trend that it's in. Bitcoin is going down. I don't want to hold an asset falling. I'm here at the Vancouver Resource Investment Conference. And joining me live for the first time in a year is Christopher Mullen, chief market strategist at the technical traders.com. My regular viewers will recognize Chris as a regular guest who's on the show a couple times a month and first time having you live since last VRIC last year. Lots has changed in the markets. Welcome back to the show. Good to see you in person as always, Chris. >> Always a pleasure. >> I was just joking with you offline that the fact that you're not in a suit is that a market indicator is a topping indicator. Exactly. >> But all jokes aside, what are topping indicators for you? >> Yeah, there's a lot going on for sure. I mean when we look at it from a big picture topping indicators to me are obviously the precious metal space spiking that usually tells us the the world is nervous about something governments currencies systems there's wars going on so precious metal spiking isn't just a North American thing this is telling us the whole world is nervous and something is up right so that's the biggest warning sign but there's a whole bunch of other ones which when we look at it I would say the AI space is definitely one of them if you look at the Magnificent 7 we've seen those as a put in a very big topping formation. It looks like it's on the verge of breaking down. We've seen the AI space kind of lost quite a bit of its shine. I mean, we saw record amounts of money flowing into that space, investment capital, not just in in Nvidia stocks and things like that, but in the venture capital space, everyone wanted to own a piece of an AI company. >> And that has slowed down. We're starting to see data centers getting rejected from banks for financing because it's just gotten so frothy. uh we've seen just you know the momentum in that space has stalled and I think when we see those companies start to roll over and move down they're going to drag the overall indices sharply lower and it's going to change the tide. A lot of people who got into the AI space chase pricing higher and of course when it rolls over they're going to also start to panic and usually it creates a very precipitous fall. We saw this even last year in February with the tariff selloff. The Magnificent 7, they fell like 20 plus% as a whole. I think we could see that again very easily. The big question is, is it going to find a support and rally again or is it going to break down? And I believe we're probably going to see it actually maybe find short-term support, but I do think we've probably seen the equities markets or the Magnificent 7, I think, put in a top and we could go a whole lot lower after that. >> I want to come back to the stock market in just a bit, but let's transition to metals. Now, we are at the resource investment conference. But I had you on the show last week, uh, virtual interview right before silver topped at $100. Well, not top re right before silver reached $100. And you were giving me your silver price targets cuz it was very close to 100 at the time and it finally hit it. You said $130 might be uh your next upside target. Now that silver has hit $100, probably sooner than both of us expected because I think it happened a couple days after our conversation. Are you still maintaining $130? >> Yeah. So, I think I think the the technical target based on the charts was pointing to $106 and we're almost there. Yeah, >> I think we could see things blow past that. I think we're in this feeding frenzy mode. Silver could spike to 120, 130, 140. We could see a very big parabolic spike. It's kind of one of those last pushes and I think gold's going to do something similar. Right now, silver has about 3% upside for my target based on technical charts where price should go after that. It's however sentiment takes it after that and I think we could see it go higher. Uh obviously we're in this feeding frenzy right now and I think it's actually still picking up speed. Yeah. >> So um I think people are going to be pretty excited to see where silver is probably in a week or two from now. >> Well, the fact that you think the uh AI tech stocks might correct at some point due to the reasons that you stated, how would that sector affect the metals if at all? Well, if we start to see money flow out of AI stocks or the stock market in general, it's going to go looking for a return. Money is always looking for return on investment. And whatever is performing the most, the best of the time usually gets the majority of that money. So, if everybody who is in AI starts to move out of the stocks in that space, they're going to look for what's hot. Where can they put that money now that they don't believe in the AI bubble? They see it going down. It's probably going to move into precious metals. And this is what we saw back in 2007 is we saw money start to have mass exodus from the stock market and it all just was flowing right into the precious metal space. And the metal space is a very tiny pocket in the in the in the whole picture. It's very small. So when you have trillions and billions of dollars piling out of the stock market every day and it's looking for money and it moves into the precious metal space like miners and and physical metals, they move very quickly. So I think that's what we're coming into is where is the peak going to be? you better be long metals because I don't think the rally is over yet, but it's we're definitely seeing signs that we're close to, I think, a significant high in precious metals. >> You're talking about a slower rotation though into the metals. What about when there's a fire sale? >> I I'm saying if the stock market sells off over the next one or two months, Yeah. >> we're going to see gold and silver and platinum and platium skyrocket for the next one or two months. Even though in the past like in 2008, 2020, even 2022, the sell-offs in stocks at those times coincided with the selloff in gold and silver initially, >> right? So the initial move down say say Magnificent 7 stocks fall 20%. That that fall in the stock market that first move is going to go into precious metals. Now, if if the Magnificent 7 or the stock market doesn't find a bottom there, it trades sideways and then it starts another leg lower, that's when metals are going to fall because that's when everybody now is actually starting to sell. There's going to be net selling. There's going to be fear, margin calls, all of that stuff. So, the first move down in the stock market is going to fuel precious metals. If the stock market fails to recover, when the market starts to fall again, equities, it's going to pull the stock the precious metals down with it. Last time we saw this, gold fell 34%, silver down over 60, platinum, platium, both over 60 to the downside. And it's just really there's going to be a lot of selling pressure and a lot of air let out of this bag. >> Overall then, what is your sentiment as an investor? Are you more defensive or are you more cyclical and risk on right now? >> Uh, we're very defensive right now. So, we've recently moved some money to cash. We're still long equities. We're still long precious metals. >> Some money to cash. Like percentage wise, how much? >> 30 30% of our portfolio. Okay. >> We've recently sold out of the QQQ. We wanted to get away from that space. >> Well, that's interesting. You're usually 100% were zero, >> right? >> Well, we we split our portfolio up between the SP 500 and the QQQ. >> Okay. >> So, actually just recently we we liquidated our QQQ position and we're actually um we're 70% cash in terms of that portfolio. We're still long equities and we actually have uh physical gold as well as a as a play here. >> Okay. >> So, we're very defensive. >> Okay. Some people might say, "Chris, when are you going to stop being a perma bear?" How would you respond to that? >> Uh, after we have a financial reset, I won't be a perma bear. We've been in this this phase for a long time. And eventually when we have a reset, it's just a matter of time. Then I'm going to be pretty darn excited because >> But just help us understand your psyche here because we we're at a point where not only have the metals climbed 50% year-over-year of the last two years, by the way, last year when I interviewed you was at 3,000. The year before that in January it was at 2,000. That's literally a 50% gain year-over-year for 2 years. And the stock market as well, maybe not as much as gold, but it's gone up tremendously. Now we're at 7,000 points. The S&P 500. How could you remain defensive when there's so much euphoria right now in everything? >> I mean, we just went defensive a couple days ago, right? So, this isn't like we've been sitting in cash. >> We have been playing the upside the whole time. We the market run the stock market goes higher and it shows a strong trend, we jump on. And so, we do ride it higher. Yes. I'm always bearish because I'm trying to get people to protect themselves, figure out if they have a plan or not, cuz when the music does stop and things turn down, the initial drop is very fast, very painful, and it's usually big enough that when people take that first hit of 20% or more, then they get into this phase, they're like, "Well, I'm down so much now. I'm just going to have to ride it out." Meanwhile, they don't realize there could be another 30% loss on top of that, not to mention wasted years for the market to recover. So, I'm just trying to get people to notice notify like understand that not everything always goes up and as much as you like it and everybody's bullish precious metals and stocks here. 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Scan the QR code here on screen or visit stellarold.com/davidlin to learn more. Let's talk about market momentum and use gold and silver as examples. So, $5,000 intraday gold where gold traded to $5,000 intraday and then we're at $101 silver. First of all, uh two observations. One, silver tested $100 and stayed above $100 while gold did not stay above $5,000. So, there's a lot more resistance in gold than silver. That's number one. Number two, uh the momentum in silver in the last couple months has been a lot stronger than gold. Yeah. Uh what do those two things tell you? >> Yeah, silver silver's holding up. Silver's got a lot of momentum as you just mentioned and it's kind of a feeding frenzy in there. So, it's it's it hit that $100 kind of whole number, that mental resistance level. A lot of people will say, "If it hits 100, I'm going to sell." >> Silver held above that and closed. And I think that has to do with it's a small market and a lot of people are catching on to it. And even if people were selling at the 100 mark, which we saw heavy volume, there's still a ton of buyers jumping in because it hit 100 and it's getting people with FOMO and people who are new to it saying, I I want in before it goes even higher. So I think there's enough momentum in silver to keep pushing and holding it through that resistance. Gold is a slower moving beast. 5,000 is a pretty big number. It it just has a bit different characteristic to how it moves. But gold definitely has a lot of momentum here. Um I think it's I think it's going to break 5,000. I think we're going to 5200 here probably in the next week or two. So it's still got a lot of momentum, but it just hasn't cleared that that whole number of 5,000 yet. >> Do you think the whole metal space is a bit overcrowded right now? >> I do. I think it could still get over more overcrowded. I don't think we're quite in that euphoric blowoff phase. I mean, I think we're close. I think we're like weeks away potentially from a huge spike in gold and silver, >> but I mean it could be very shortlived. It'll be swift. It'll feel good. But >> one of the biggest challenges for a trader or an investor right now or both is exactly what you just said, deciding whether or not to get in when prices are elevated, things look expensive, but there's still this hope that it could get even more overvalued. >> Yeah. >> How do you walk us through how to resolve this mental discrepancy here? Yeah, at some point you do have to be happy with a gain. I I was talking about this with uh subscribers in our mentoring session last week, which is at some point if you've got huge gains and things are looking frothy, like right now I believe silver and gold are in a the final push higher and I think we're going to see them peak out and we could see a big correction. I think we could see a 30 to 60% correction in metals. And so knowing that and the sentiment where it is right now because I believe it's very crowded but I do think there's still more hate to say it but like suckers who are going to get squeezed in and buy in this feeding frenzy and drive it higher. You do at some point have to be like okay it's almost over. I'm going to start protecting and start to scale out of these positions and lock in some gains. And it's to at some point you just have to be happy by leaving a little bit on the table. bubbles like what we're in right now where silver, if you look at the monthly chart, it's gone straight up. At some point, it's probably going to have a very sharp correction and come straight back down. And you just have to be happy saying, you know what, I caught a huge chunk of this. I don't care if it spikes up temporarily a little higher without me. I want to lock in some of my profits. And that's where we're getting close to is I'm about to start trimming off some positions as soon as I see some more significant signs that it's um getting closer to a peak in this bubble. Bubbles are very hard. you can't really predict them and you don't know where the the p the top is. So, at some point you just start scaling out when you're satisfied and you're not going to panic if it keeps going higher without you. >> Yeah. Is there anything right now that you would go all in on long? >> There isn't. No, we're um I'm nervous for equities. I'm nervous for precious metals. >> There isn't anything shiny. Believe it or not, one of the other things that actually looks like a good trade is actually like an inverse ETF on Bitcoin. I was talking about this the other day. I think it's BITI. >> It looks like Bitcoin could fall about 30%. >> Well, Bitcoin's down again. I think, let me just double check the price. It was at $83,000 when I spoke to you a couple days ago. Was at 90, right? And I think today it's at uh I'll pull that up real quick. Yeah, 86,000. >> Yeah, it has a very big bearish pattern. And if the stock market tops, I think precious metal or Bitcoin is going to go down with it. So, out of all the plays, Bitcoin I think it'll be one of those very swift moves. We've traded Bitcoin in the past. We traded it um the last move was about a 40% move uh that we caught. This one is about a 30%. And what I like about Bitcoin is it's a very mass psychology play that when it starts to break down, that group of people s most of them tend to just bail and sell and it creates a very swift move so you can hit your targets, hit your lock in profits quickly. >> I I and I like that for Bitcoin. So that's I wouldn't say I go all in on it by any means. It's a small trade, but it's one downward play that I think um it's got some good potential. >> Well, you're cautious on pretty much everything we've discussed so far. If you have to choose between Bitcoin or gold this year, something something that would outperform in 2026, which would be more likely to outperform? >> I would say gold. >> Even at $5,000, >> I would gold to me is much more stable. It doesn't It doesn't drop 20% a day like Bitcoin do, right? So even a big correction in gold is like 34%. Like that's a pretty darn big correction for gold. Bitcoin can do that in a few days. >> And I believe in in physical metals. I'm not a big crypto guy as most people know. So I like to invest in stuff that I believe in that I believe has, >> you know, solid value. >> So that's where I would go. And I think longterm I think gold's, you know, going to be breaking 10,000 and beyond. But there's a roller coaster ride in between now and that high target. Let's just forget the fundamentals and just talk about gold and Bitcoin from a purely technical perspective and price move perspective. If someone were to say to you asset A in this CO Bitcoin is down 30% from its top. So it was at 120. Now let's just round it down to 80,000. That's a 33% drop. >> Yeah. >> Um from its top whereas gold is at historic all-time highs and it just keeps pushing all-time highs pretty much week after week. Just from a technical perspective, if you were to compare two assets that's down 30% from its highs or something that's keep that keeps pushing all-time highs, which do you think has more of a chance >> to rebound to or I guess uh you know has has more upside from here? >> Yeah. So, I flip the script. I do the opposite of most people. Most people like to pick bottoms. If it's pulled back, a lot of people think, "Oh, there's opportunity to the upside." >> I don't do that. I want to own things going up because I want to benefit from the trend that it's in. Bitcoin is going down. I don't want to hold an asset falling. So, that's the way I look at it. I would much rather own something going up because who knows, gold might not top till seven or 10,000, right? That's why I'm bearish on the equities market, but we're still long. Just because I think it's topping, doesn't mean it is topping. And we have to follow the trend. So, to me, I would much rather own gold. It's less volatile. It's in an uptrend. Those are the two things that I find value in. And even if there is a big pull back in gold in in the markets, uh, Bitcoin is most likely going to have a bigger correction anyway. So that's kind of where where I stand on that. >> Where do you stand on the miners? The fact that I was just looking at charts with you offline. GDX, the GDX index is up from 33 something dollars last year, exactly 12 months ago, to now $107 a share. >> That's 3x in one year. Far outperforming gold. Usually when something that has a higher beta to the underlying asset outperforms it by this much, does that signal to you the beginning of more upside momentum or a top? >> Yeah, there there's a tipping point there where >> and by the way, just let me add more context before we continue. Last year in 2024, the year before, the biggest complaint I've gotten was where is this leverage? Because gold was going up 50%. Then the GDX was still flat and all of a sudden it's going up 3x more than gold. So, >> I mean, the miners are doing very well. They've been on fire. They're they're they're playing catch-up significantly now to gold and and performing very well. >> I I like miners, but the fact that they have all taken off and we're seeing silver go parabolic, there's a common kind of move here where everybody's kind of just piling into the space. So, I feel like it's pretty frothy. I think miners still have some upside, but overall, they've had a huge chunk of their move. And I know a lot of people have held miners, you know, from the 2011 market peak and really when you look at the monthly chart like from silver and and gold and um miners specifically, they've held for like a decade and and then in a few months finally there's they've got these big returns and because they've held it for 10 or 13 years, a lot of people think that this this move that's only really a few months old is just starting. It's just the beginning. But to me, I actually all the signs to me are saying, "Hey, you know what? I think we're about to actually see it come to an end. And usually when everybody's super bullish and think it's just starting. Usually it's coming to an end. So from a psychology play, I think miners are I think they're they've valued in the current price. I think there's a bit more upside, but uh I'm nervous. I think they're going to have a big correction. Uh which is going to be an opportunity. I think that this next pullback is a huge opportunity because once we have this pullback and say a financial reset be like 2009 to 2011 again. It'll be people won't focus so much I think on physical. They're all going to be focusing on the miners >> and that's where I think you're going to get the big leverage play in that space which um is going to have some big opportunity. >> Tops and bottoms are usually very difficult if not impossible at the time. Exactly. So once we do have a correction at what point will you start taking action? Let's say gold starts correcting by the order of 30 even 60%. At what point in that chart do you start to either sell >> or make the decision that it's gone down enough? Like how do you approach a big correction? >> Right? So when the price is going up, obviously we follow price from a technical standpoint. So price action has to be an uptrend. If the trend starts to go sideways for too long, it loses momentum. We've got about 12 different things that we track. We've >> intermarket analysis, a bunch of different assets. We use cycles, we use time, we use uh price trends, all that stuff. So when price starts to go sideways or starts to break down, lower highs, lower lows, that trend is over. It's not going up anymore. >> So that is that's one of the things that'll kick us out of a trade. We also have position management. So if something falls, say 5% or something, it'll trigger our our strategy to say, "Hey, this trade just isn't working out. Let's cut our losses. Wait for a fresh new setup." So sometimes we don't even have to wait for the trend to turn around. we just need a pullback of a certain significance that is telling us that there's a few things underneath the hood that are showing weakness. So, we can sometimes have six or seven indicators saying gold looks like it's going to top. And you know, just because we have those doesn't mean it's topping. But our strategy could tell us this trend is slowing. It's stalling out and we might actually get out before price actually even drops. We've done this many times in the equities market. Our system has a way of identifying money flows and trends internal. The the market internals tell us is this a a pause or has it actually totally lost its mojo and it's about to head lower. So >> it comes down to price action and then position management. There's those two triggers. Yes. >> Um at a conference like this, what kinds of questions would you ask people or miners or even just attendees on the floor uh in order to gauge market sentiment for yourself? >> Yeah, good question. I mean, it feels like everybody here's pretty darn bullish on metals. I don't know if people are going to like my presentation where I'm talking about the peak potentially coming in metals here. >> Well, I think that's important because sorry to interrupt, but I had a few people just walk by and maybe it was a Freudian slip, but they were saying, "Hey, I love how they timed a conference at the market top." And I said, "Well, why choose that word? Why it's gone up, but why do you think it's a top?" So, I think that presentation that you're making is really important for a lot of people. >> Well, that sparks another idea, David, is you were talking about the miners. What's, you know, right now we're actually starting to see some new mining ETFs come out. I'm seeing proposals for like a fourleveraged mining gold mining ETF. If you go back to the 2011 peak, we saw a whole bunch of leverage precious metal trade uh ETFs come out. Usually when something is hot for long enough, financial institution creates a product that they can sell off to people and it's usually too late. And so that's one of these other warning signs here is a forex leverage ETF on miners and man that is going to hurt when it falls 25%. >> Forex leverage long or short >> long. Just on that note, do you ever trade leverage products? >> No, not anymore. Not so much. No, >> you're not supposed to hold those, but you could hold, you know, trade them intraday or whatever. >> Some of them you can like a 2x leveraged on the indices is perfectly fine. It's the 3x um which really aren't 3x anymore. And there's there's a whole margin problem with that. Believe it or not, you can get a bigger position with just a straight up position in non-leveraged than um a 3x leveraged position because there's like three times the margin, right, >> requirements. So, you can't actually get a big enough 3x position to equal your whole portfolio and then you have time decay and they they lose value. Leverage ETFs aren't the greatest. 2x are okay to hold for a couple of months, sure, >> but that's about it. >> What are some ways you can build your own leverage then? I I well I mean that's what miners are for right you can either own gold or you can move into the miners but there's a certain window where miners have leverage and they don't it's a small window right now we've seen miners in the last year just rocket higher so they've been providing that leverage play um other than that you know in order to get leverage you either have to use margin so borrow money and buy more or you need to you know buy futures or a leveraged ETF really >> what's your take on bonds uh in the last couple weeks uh the 10ear and 30-year Treasury Yields in the US have continuously gone up. Uh Japanese JGB 30-year spiked to new alltime highs last week. So, uh not off to a great start. >> No, I was uh looking at the 10-year yield the other day with members. And I mean, if you look at the monthly chart, it's pointing at 8.3% interest rates, which is obviously going to wreak havoc on the debt. >> It's pointing at eight. How does that >> the interest rate chart when you chart it out, it's saying we're going to 8.3% interest. >> Wow. And obviously that is going to wreak havoc with the debt problems. People aren't expecting it. I'm not saying it's going to happen, but that is what the chart is pointing to, which means we could see the bond market collapse. And I mean, we got European countries pretty pissed off at the states talking about dumping bonds. Who knows what's going to happen? We are in some unique times. There is a reason why gold and silver are skyrocketing, right? >> You think that capital is going to rotate to precious metals or something else? >> I think a good chunk of it will. And and that's the question is we're in this bubble phase for precious metals. Like where does gold peak? Does it peak at 52, 62, 72? Who knows? It's a tiny market and the whole world's getting nervous and there's going to be probably a lot of liquidation maybe between bonds and equities. It's going to go into the precious metal space. It already is crowded, but there's room for a lot more I think uh before it peaks. >> Let's close on on this note. So without looking at the charts, are there any other market movements or perhaps headlines that would signal to you that gold is topping? Perhaps let's say bonds are doing better, yields are falling, or perhaps if equities, let's say counter to your thesis, continue to go up. I'm just making some examples up. >> Yeah, I'm not sure. I don't I don't really think there is. To me, the biggest barometer is when everybody's talking about talking about it and people are investing in it who have never invested in it before. That's usually the the last, you know, the last kind of hurrah, the last push, maybe a couple weeks away. So once I see crazy stuff on the radio and stuff like I don't follow news too much. >> Yeah. >> But um it's really it really comes down to mass market participant when everybody wants it and holds it. Who else is going to buy it? Who's open to it? Right. >> Well, uh before we go, tell us about how your strategy works overall and where we can learn more. >> Yeah. So my strategy is pretty straightforward. I use a strategy called asset revesting. It uses compounding. So we have 5 to 12 trades every year navigating the markets with ETFs and each trade compounds its growth on top of the next. So we have small high probability winning trades that just keep compounding on top of each other. We rotate between holding equities, bonds, the US dollar or inverse US dollar ETF and cash. We rotate through those core assets and we only hold assets going up. If they're not, if nothing meets our criteria, it's not moving up or strong enough of a trend, we sit on the sidelines and we wait. We wait in cash about 40% of the year sometimes where we have no position by just earning interest on waiting for an opportunity. And by doing that allows us to, you know, avoid a lot of the the noise and volatility in the markets. We don't hold things going down and we're holding the best asset, the strongest one at any given time when something is firing and working well. >> Okay, good. Well, we'll put the link down below, so make sure to follow Chris there. Thanks so much, Chris. >> Thanks, David. >> Yeah, appreciate you coming on live and thank you for watching. Don't forget to like, subscribe, follow Chris. The links down below.