Market Repeating 2022; Nothing Is Safe In Next Financial Crisis Warns Trader | Chris Vermeulen
Summary
Market Outlook: The guest argues markets are at a critical turning point with 2022-like downside risks, advocating capital preservation and patience.
Crude Oil: Oil has the spotlight with a potential move toward $140; he would not short oil and has a long bias given bullish trend and geopolitical tailwinds.
Energy Stocks: Energy equities could benefit from higher oil, but the trade looks crowded; XLE-style moves may face elevator risk if headlines reverse.
Precious Metals: Gold and silver show topping patterns; he expects a 20%+ pullback in gold and 30–40% in silver, preferring to wait for a new base before re-entering.
AI: AI and robotics are resetting business models, helping AI-rich firms while pressuring laggards; software has already been hit, and broader disruption may cleanse markets.
Bonds and 60/40: Elevated oil could stoke inflation and rising yields, hammering bonds and hurting 60/40 portfolios, with inverse ETF setups likely later once trends confirm.
Trading Approach: In a headline-driven, whipsaw market, he favors small position sizes and short-term momentum trades for active traders; longer-term investors should step aside.
Key Levels: He watches S&P 500 support near 6,200 for a potential fear-driven flush and bounce, then reassesses whether any rebound turns into a durable trend.
Transcript
We're at a really critical turning point. If it drops to this level, I would expect a bounce, a significant bounce. Uh this, not only is it a Fibonacci level, but if we just kind of was to box this zone in, you'll notice it's a very significant pivot. I definitely wouldn't be shorting oil. The price of oil really consolidated. It's held its ground, and now it's trying to make another run. Listen, I think we're going to see at least a 30 to 40% pullback in silver. I think we're going to see a big 20 plus% pullback in gold. All the signs are there. It's Monday, March 30th, and stock markets are rebounding on the announcement that President Trump and his team in Iran are still in negotiations. The Dow jumped 300 points. The S&P 500 is up about 35 basis points. Meanwhile, gold is also up 1%. Bitcoin is up 1.5%. And oil, WTI crude is still trading near $100, back towards $100. Christopher Mullen, chief market strategist at the technical traders.com, joins us once more and he warns us that the markets have reached a critical turning point. And indeed, notwithstanding today's rebound, the S&P 500 is off to its worst start to the year since 2022. So, is this the beginning of another 2022 style crash when the markets retraced down by the order of 30 to 40% and everything goes down? All assets go down and it's just a terrible time for the 60/40 portfolio. We saw that in 2022. Are we about to see that again this year? Chris is going to cover this and much more today. This video is sponsored by Koshi. It's a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Sign up and use my code Lin Lin. Link in the description or scan the QR code here. New users will get $10 deposited to your account when you trade $10. Traders can put money down their favorite teams, events, elections, and more in all 50 states, including California and Texas and over 140 countries. Chris, welcome back to the show. Good to see you again. >> Thanks for having me, David. Always a pleasure. >> We missed you. And uh the markets miss you, so it's good to have you back. Uh last time you were on was a couple weeks ago now. Lots has happened since last year on. Oil has been top of mind for investors all around the world. Now, countries around the world um are actually witnessing an oil shortage. Uh I'm not talking about the US. I'm talking about countries in the Asian uh region in particular. The Philippines, for example, declared a national state of energy emergency. Uh Australia and New Zealand are equally feeling the pinch. And so oil naturally, WTI, has spiked um since we last spoke, now at $99 a barrel. I'm going to start with this piece of news today. So the Dow is up uh because this is from CNBC. The Dow is up 300 points this morning as Trump says he's in serious talks to end the operation in Iran. Meanwhile, he's also threatened to take Car Island and bomb Iran's oil fields if the straight of Hormuz is not opened immediately. So, how do we trade an environment where markets are whipsawing every single day depending on whether or not Trump is making an announcement that he's in talks with Iran? That seems to be the current environment. >> Yeah. Yeah, I mean there's definitely oil's got the spotlight. Uh it's I think it's a big chunk of driving the market. High oil pricing is going to put pressure on consumers. We we tend to see oil go up, stocks kind of go down. If oil goes up, we've got inflation worries. We've got uh yield rising concerns and of course that could send the bond market sharply lower, which they've already had a big drop. As oil spiked, we've seen uh bonds go in the opposite direction. How do you trade it? I mean, you definitely need to be an aggressive and active trader. You should be day trading it. It should be momentum trades. Uh, this is pretty much a landmine. So, you got to be extra cautious. Position sizing should be small. Just because something is moving big doesn't mean you put on a huge position and try to make a grand slam and change your lifestyle with one big trade. Unfortunately, that's what so many traders uh, unfortunately do. But you really do need to uh focus on position sizing because at any point during the day or you wake up the next morning, it could be dramatically against you. And so that is one of the big risks in this headline driven market. So I mean I think you've got to focus on the short-term price action and just know that hey this is active trading. This is a higher risk trade than normal. I believe just because it's every day something's happening in the news that seems to move the market and you just got to take it one bar at a time and don't don't look too big in the big picture. I think you've got to actively trade this because we could have a huge move one day and it it's given back the next. >> When political news move the markets on a day-to-day basis and you don't know what these political news items are going to be, are there specific positioning um strategies that you take that would basically head yourself in either direction? Basically, you're kind of when you think about it, the entire market is like an options play uh on let's say an earnings release on a stock. You don't know how the earnings uh report is going to look exactly after market hours. And so, you position yourself both ways for the volatility, right? >> No. >> Yeah. So, and we've done that, but our position isn't what most people's position is, right? So, about a a month or so ago, we moved out of we moved out of uh the equities market. So, we we flat. When the market gets like this, when it is like the stock market, for example, is trendless, like really it traded sideways in a range, the S&P 500 and the NASDAQ pretty from the o pretty much from the October highs. It's been like six months of just noisy chop. And when the market does that, you want to step aside. And uh and so that's what we did quite a while ago. I mean, we actually exited our gold and silver when positions went there. Silver was up at 113, gold was well over 5,000. And when when the market was giving all of these signals, that's that's when we took action. And so all of this noise that's going on right now, we are completely sidest stepping it. We're watching it from the side. We're just collecting daily interest safely as a position because we don't want to get involved with our portfolio in this type of noise. Now, there is opportunity obviously if you're an aggressive active trader, but as an investor, somebody looking to protect their capital who just wants consistency. They don't want to wake up every morning, you know, hoping and praying the market didn't move against them because this market right now is very dangerous. We got the S&P 500 breaking down from what looks to be a topping pattern. The NASDAQ is doing the same. We've got the dollar index trading at the 100 level on the verge of breaking out and rallying. If the dollar breaks out, that probably means we're going to see precious metals sell off. We're going to see equities crashing. Uh so we're at a really critical turning point and uh the best position in as a kind of a large investor trying to manage your your wealth and your lifestyle really is to just sidestep this. Don't get caught up in the news. Don't think you need to trade this. This is this to me should be watched from the chair. Watch just watching through the screen, not actually diving in and trying to pull money out through this type of volatility. It's just not my style. I know it works for some, but that's not what I focus on. >> Okay. Can you please turn uh pull up a chart of the S&P 500? And I want to show you something. The S&P is down about 7% year to date since the beginning of the year. This is this has been one of the worst years from a start of the year standpoint on record. In fact, this has been the worst start of the year for the S&P 500 since 2022 uh when we saw a similar pattern uh with the uh stock markets falling basically all throughout the year. It topped in early 2022, late 2021, and then it just kept falling. Is this the beginning of another 2022 when you just look at the pattern? >> Yeah, I I I think it is. what what we're seeing like right through this kind of blue box zone right through here. Uh we're getting almost almost identical sentiment and money flows happening here. So the very very same momentum is running out. We're starting to see all kinds of chaos. Um sentiment is shifting. Money is flowing, you know, away from stocks. So we're in a very similar situation. And that's what I think people need to to be aware of is you never know which one is going to turn into a you know it could take um two years. It could be a year-long selloff and a year to recover or it could be like a 2008. It could take multiple years to recover. Five, six, seven years to recover. We never know which one of these pullbacks is just a quick pullback and and for it to recover. But when we look at the S&P 500 and the NASDAQ, I mean, we've got this really critical um support level right through here, which it has clearly broken down, and the market's gone from a series of making higher highs and higher lows to now it's got a very strong sell-off. I do feel like the market's oversold. I think we could we could see the market whenever it finds a bottom here, we're going to see some type of knee-jerk reaction bounce back up, just like how the market makes a series of of higher highs and higher lows. Once it breaks to the downside, it kind of flips scenarios. And the NASDAQ has kind of been a leader in this space in terms of it breaking down. It it somewhat has broken down as well and more so a little bit beforehand, but it's breaking down and this is a big powerhouse. Um, you know, along with the Magnificent 7, which have broken down a lot sooner. So, I think people need to be aware this what we're seeing here is very similar to the 2022 peak. And the question is, you know, is it just a baby bare market, something where we correct for a little while and recover, or is it the start of something uglier? And that's what we just always need to be prepared for. I talk about it all the time. I'm very bearish on this market. Uh it doesn't mean we're betting on falling prices. We're actually just, you know, watching it, stepping aside. We got out of the market um over over in this area and we're just letting it unwind. And eventually, we'll be playing inverse ETFs. When this does give us opportunity, we'll be betting on falling pricing because that's a great way to pull money out of the market, but we definitely want to be confirmed in a bare market. We want to see the trend being down. >> In 2022, the Fed's raising rates uh their tightening policy was probably the main catalyst for a market decline, a broad market decline, not just stocks, but gold, metals, uh bonds as well. It was just a bad year for a 60/40 portfolio. What could be the catalyst this year, Chris, for continued downward momentum? >> Yeah, I I think I think there's going to be a lot of pressure from two things. Uh the the I think one of the deeper underlying ones I think will be actually the AI space. I think it's going to be rewriting a lot of business models. Uh it's going to undercut a lot of businesses who whoever doesn't bring AI in is going to get left behind. they're going to be, you know, um AI rich companies are going to be able to operate at a much lower rate, very efficient and um and potentially undercut other players or just excel with better products and add more value and provide uh things that people need. I think that's deteriorating. We've seen that in the software space definitely hit very hard. But I think we're going to see AI and robotics be a huge shift that's going to I think reset and cleanse the market. I think that's going to be one big player. The other one more near-term is I think is crude oil. When we look at the uh price of oil, I think this could be one of the big uh one of the big resets that could spark what's happening. So if we look at oil and we look at the significant low here and we look at this this spike high and this pullback using a Fibonacci extension. Now I find this tool is extremely uh accurate. There is potential for oil to go to about 140. I know there's people calling for 200 oil, all that stuff. Based on the chart pattern right now, the first major level is 140. And so that is going to obviously wreak havoc uh across the board. That's a you know 37 38% uh move to the upside. I think energy stocks could benefit from this. I think they might want to they might be able to move higher. Um but obviously this is going to dramatically hurt um everyday investors. I mean, just at the pumps here, we almost had $2 a liter just down the street from where I am, which is extremely high. I don't know what that works out to be in gallons for the US, but I think it's probably almost the highest, if not the highest price we've ever had. And I believe this whole issue here is actually kind of just getting started. And if oil prices go up, we're probably going to see stocks tick down. It's just going to burn a hole in in people's money. Any excess cash they have is going to start going through to fuel costs. Inflation is is already through the roof. Imagine having to pay for this fuel to to to generate products, bring products over, all of that stuff. So, I think oil is the most imminent kind of direct correlation. If oil pops and rallies here, it's going to hurt the stock market. It's going to hurt the bond market. I think is going to get absolutely hammered. You definitely, as you mentioned, David, in 2023, uh 22 to 23, it was terrible for the buy and hold investors, the 6040. If you hold stocks and bonds, you are going to get hit on both sides. And I think you're going to get absolutely beat up. I did a video on this the other day uh on my YouTube channel talking about the devastation we could go through and how interest rates could spike dramatically and the average investor is going to just get absolutely pummeled here right when they can't afford it time-wise. They don't have the time to make it back. We could go for a big reset. So oil to me is kind of the kingpin and um on the sidelines protecting your capital, protecting your wealth. You know, if you can earn 4% without any risk in a minefield of market movements right now and un you know news you just can't predict whatsoever. Uh I think it's one of the best plays right now. It's not about making a lot of money. It's about protecting what we have because we're on the cusp of something pretty ugly. >> Well, would you be short oil right now? Let me just pull up this uh particular trade from Koshi. It's a prediction market. It's based in the US. One of the largest traders are uh predicting uh gas prices in the US this month. So 97% believe uh above $3.98 a gallon. Uh this is in US prices and uh I think the consensus is that prices won't change much uh for for the end of the until the end of the month at least which is next you know in 30 days. Uh we're already on the at the end of um uh well no this one is for $4 on March 31st. Let me pull up something else on um for a for a farther out forecast, but I want to get your take on oil first and then I'll post something of it. >> Yeah, I I definitely wouldn't be shorting oil. When when we saw this great big spike a couple weeks ago, it definitely looked like a topping candle, but the market the price of oil really consolidated. It's held its ground and now it's trying to make another run. If anything, I would be long oil here. I mean, we're not in a oil energy position right now, but this the trend is up. The pattern is bullish, and the chaos, I don't think, is coming to an end, and we keep hearing like there's talks, but all I seem to hear is there's more threats and more takeovers wanting to happen. So, uh, you don't want to fight the trend. The trend for oil is up. Uh, shorting it right here, uh, is to me is a higher risk play. I think you're better to own it than short it. So, here's one with a longer term outlook. How high will US gas prices get this year above 440, which is higher than most in most jurisdictions right now? Seems to be the consensus forecast. Chris, what happens when oil stays very high? Walk us through what happens with the rest of the capital markets. You already talked about what would happen to consumer spending. Logically, yes. people have less money uh to spend on other things as a hole in their pocket is burned through by paying for more oil. I get that. So what happens to capital markets when that sequence of events occurs? Yeah. Well, we saw this kind of back, you know, during the last major reset, we saw every time oil would tick up back in in the early 2000s, we'd see the stock market go in the opposite direction. It was is very related. But I mean, I used to own and run a uh an importing business. We used to bring everything in from overseas container loads and I'll tell you energy pricing is a huge factor not only not only for transportation which everything is shipped obviously but oil is is used petrol is used for every product. It's crazy. And so if it spikes up or there's delays you can't get it. Uh it really is just going to wreak havoc through more expensive pricing. Obviously once products can't be produced because they're they're missing out on it. Then whatever it is in inventory, people just the store owners jack the price up. Just like oil, the second there was talk of of war unfolding, the gas pumps spike the price. Not like it cost them more yet, but they're already starting to gouge and prepare for it. So through the whole, you know, if oil prices go up, everything around the world pretty much goes up in pricing. And when it goes up, people have to spend more money to do the same things, which means they they have less to invest. they have uh less to buy stuff, you know, uh discretionary products or whatever it is and travel and all that those things. So, just higher oil pricing just puts a squeeze on everybody. Now, there's a big delay between producing products and and the end user. So, if it holds up for a while, it's going to do a lot of damage versus a spike. a spike won't be too bad, but you know really oil would need to um drop in the next month or two and we need to see the the you know the the traffic flow straight get opened back up again or or we're going to start to see I think inflation creep up and investors are going to start or consumers are going to start closing their wallets and cutting services and costs. I mean, we're already seeing it, but uh it's going to be even more. And then earnings drop and then, you know, investors start to sell off stocks because they see the momentum stalling. It's a huge huge long cycle that unfolds. A blip in oil is not bad, but over two or three months, it starts to create issues. >> Chris, would you be long oil companies right now? I know you're bearish in the stock markets overall, but what about the oil sector in particular? >> Yeah, the the oil sector has done really well. I mean, we did trade it a few months ago um with our band strategy. The best asset now is it was starting to emerge. We we played that. We got in, we got out, we hit our our targets and had our our strategy there. We're not long it. I Yeah, you could be long. Here's the thing, though. As you just mentioned, the stock market is technically in a downtrend. It's not favorable to hold stocks. If the tide of the ocean is going down, you shouldn't expect your boat to stay up. Usually, most boats or most stocks go down when the stock market goes down. Now, there will always be that needle in the haststack. What stock, what sector is bucking the trend. The energy space is that it very difficult to know which one is going to be until it's already happened. Um, you could be long energy stocks. I kind of feel like they're they've had a big run. I feel like they're becoming the crowded play. I think like we could take a look at XLE for example. If we look at the XLE chart, you can see it's had a huge run uh moving to the upside. I think there obviously is more potential, but this to me feels a little bit overdone. I'd be looking for some type of pause or pullback before I get long. I don't like to buy into something that goes uh quite this strong to the upside. So, I'm not a big fan of buying stocks when the stock market is going down because at any point that the one sector leading the way, bucking the trend, could fall in line with the rest of the stock market. And when it is a news-driven move like this, these big rallies can be wiped out in days. Uh so they do carry that elevator risk. You know, it takes a staircase up and the elevator down. Uh so you got to be aware that trading these stocks is just like the energy oil space. At any point there could be a massive red bar. It's everybody's been trading energy stocks. Everybody I think is piled in. And when the news changes direction, it's going to be a mass exodus and a huge probably set of red bars to the downside. >> Okay, I want to come back to stocks. So, uh Chris, we'll get your outlook on key levels for the S&P 500 uh to watch for the next coming months. Uh before that, we're going to jump into precious metals. So, write down in the comments below what you think uh Chris is going to say in regards to his outlook and uh let's get some discussion there. Chris, I think one of the themes that happened uh or have been um popular on the internet since you uh last came on the show is that gold is no longer a safe haven play. Let's pull up a chart of gold and I'll show you what I'm talking about. Gold has been acting pretty much like a NASDAQ or S&P extension, moving in lock step with stocks, moving down when there's bad news with Iran and moving up uh when the opposite happens, when there's good news. like today for example when Trump has announced that there's more negotiations with Iran. So the point is gold is not doing what a lot of investors would expect to do for a traditional safe haven asset which is actually hedge against equity volatility. Its volatility is moving in lock step with stock market volatility. Can you comment on this? >> Yeah. So I mean gold has been doing what it should do for the last several years. It's been going up. Tensions have been rising. things have been looking more bleak and and and that's why we've seen uh both gold and uh silver moving higher. Uh now you know the typical kind of scenario when it comes to the stock market or investing in general is it's like buy the rumors sell the news. I think I think gold has been moving up with anticipation of all kinds of things falling apart. War kicked in. I mean I think we went into this capitulation top. So, gold did what it was supposed to do, but now we've hit this this tipping point where I feel like it's put in a s significant high and now it's it's going to start moving with the stock market. And this is the fear. If the stock market sells off, then we're probably going to see precious metals sell off. And this is what I've talked for a long time is nothing is not many things are safe when we go into a financial crisis or or a bare market. And so we are seeing, you know, I think a lot of people got rattled on this move. A lot of people who have held through here, they're really starting to panic and feel the pain. And now we're just seeing it move like the stock market because I think the safe haven play is somewhat moved out. There's so much volatility, it doesn't feel that safe anymore. And it looks like it's got a pretty major major top in the price action. Now, if we use Fibonacci extension just based on this initial drop and this bounce to the upside, we can see that gold ended up hitting our target. And I'm not sure if you and I Yeah, we talked about this a long time ago. These are inside bars. We have this big red bar and then all of these days coming all the way up to the top. And I talked about how this is a bearish price pattern. If it gets rejected at the top of this bar, look out below because it's going to sell off and it's going to want to come down to the 618 or this previous low and down to the 100% measured move. And that's that's what it's done. And so right now, gold to me is in this to me short-term wise, it looks like it has um put in a major top. I don't want to hold it. We we got out uh way way up here before that drop. Uh but now it could potentially build a giant bull flag here and who knows it maybe it takes a year. Uh and then of course if it starts to break out and it shows signs then you definitely want to get long and catch that next move up. But what we don't want to do is hold on to something that clearly shows it has run out of steam. That is not the play that everybody that that it used to be. It's not that safe haven play right now. And it could actually unwind and come on down a whole lot lower. we could see 3,600 fairly easy in gold I believe. So right now we were in this this pause mode and uh I mean I was with with you in um at VREC in in Vancouver when these prices were spiking and I mean I was on the panel saying like listen I think we're going to see at least a 30 to 40% pullback in silver. I think we're going to see a big 20 plus% pullback in gold. All the signs are there. I was talking to people on the floor that had never bought metals before and they had just bought silver at like 110 and all this stuff or 106 or 108. Um, and so when all these signs are there, you got to be cautious. And then prices now confirm that. So my view on on gold right now is it's not a trade, it's just let it mature. let it build a pattern and if it collapses and goes into a huge sell-off, it'll become an amazing buying opportunity because long-term I am extremely bullish on precious metals. All the fundamental data, all the economic data, everything going on, the central banks is the most bullish sign ever. But it doesn't mean price is going to just keep going up that we'll have these corrections. So, we just need to let gold figure itself out. And you're right, when we have broad market selling, it will move with the price of the stock market. And that's why a bare market is broad market selling. It's everybody's scared. Everybody's selling everything. And that's the phase that gold and silver are in right now. So, uh, I think if you're a long-term gold investor, you either have to ride out more of a roller coaster or you just got to give it time and it will recover, but it might still take a long time. the the price pattern that we have is actually very similar, especially in silver, to what we saw in 2011 where everybody, you know, thought metals were going to the moon and then it took 10 years to come back. It sold off. I'm not saying it's going to happen, but you definitely don't want to waste two, three, five years waiting for metal to come back when you could move somewhere else and not have to watch your your account go down. You could potentially buy it at a lower price or buy it later as it's starting to go higher so that you can just catch the upswing and not have to ride the the wasted time in the roller coaster. >> When you Let me just show my screen. >> Sure. >> Real quick. If you have something like this, this is gold and copper moving in lock step together. These two assets have not historically moved so closely together as we are seeing right now. By right now, I mean over the last year and especially over the last couple of months. I know this is a broad market selloff, but when metals start moving together, does that signal something bigger in the economy where perhaps markets are large? >> Um, I'm not sure. I don't follow copper too closely. I I think when things start moving together, it more so just means it's everything is part of the same tide. And if and and if the and if the masses are naturally getting more worried and they're selling, it just it means they're all going to move together. To me, it's a bearish it's a bearish line. we should be seeing gold go higher and stocks go down, but we're I think we're maybe already past that point and now actually people are just like I don't know what's going on and the charts of both gold and silver are you know those topping patterns they put in are pretty scary. I mean that was that's a quite quite the noise uh quite the volatility. It's it's not a good sign. And so I think people have just turned turned the page. I think they've gone from a lot of people have gone from precious metals are the play to now they're like I'm kind of scared to get in. And you know, if you look at the the volume on like silver and stuff like that, it's just dried right up. Nobody's interested in silver anymore. And if you take try and sell your silver at like a pawn shop or or something like that, they don't want it. Every pawn shop is full of silver. I don't know exactly what that means, but it definitely means uh people just don't want silver at this point. And um the volatility has got people shaking up. >> So even if somebody hasn't gotten into gold and silver right now, he should probably stay out. Is that what we're talking about? I believe I I mean it doesn't matter like so many people always think you got to buy low. You know, you can buy high and you can buy higher. So, you know, if the market rallies from here and then it starts to break out to new highs, you can just jump in and buy it. Even at an all-time high, it's still going to have a massive potential rally, uh the next big leg from this potential bull flag pattern that gold is forming is huge. So, who cares if you pay a higher price? But what I try to avoid is I try to protect our portfolios so they don't go down in value substantially and so that we also don't waste years. Like if if gold and silver take a year and a half to go sideways, not only are you going to not make any money, it costs you money to store it. you're every day you've got the stress of hoping and praying they don't keep collapsing where you could just step aside in a cash position which is the most boring position ever but you could still make your your 4% every year and dramatically outperform holding metals and then just jump into metals when they start the next rally. I like to be involved with something that is on the run. I don't want to hold something chopping around that shows signs of weakness which is the pro what the precious metal space is showing right now. >> What about stuff like this? Let me show you the CNN fear and greed index which is currently at extreme fear. I was surprised when I pulled this up just now. I thought it would be maybe leaning more towards neutral especially on a day like today when the markets are rebounding. Uh but extreme fear is what they have. It's an amalgamation of a few technical indicators. Are you seeing extreme fear flashing on your dashboard uh based on the trackers that you follow, Chris? >> No, we're we're actually not seeing extreme fear. Um, yeah, that that greed index that will will kind of gauge probably a different group of people, but based on how I follow with my sentiment tools and and indicators. We're not seeing actually real big panic selling just yet. Um, there's no doubt the market looks oversold, but I I think the market is ready for a bounce, but we're not seeing full-on panic selling at this point. We haven't seen it in a little while. And I think the stock market could have maybe another leg down, another big red bar or two to the downside. And I think that will be just enough to to trigger some panic selling. I mean, I follow very short-term levels that that fear index is probably looking more so at swing traders and investors. I look at more or less intraday spike levels because that's actually what to me gives me the most imminent, okay, this looks like a pivot low today type of thing. Um, but we're not seeing, I don't think, panic, fear just yet. when something does move into the extreme level one way or another, fear or greed, is that a usually a contrarian indicator for you? >> Yeah. So, for example, if the trend is down and then we see FOMO buying on the charts, meaning people are piling in, they're they're buying stocks, uh that usually is an indicator that the stock market is going to um uh probably sell off. So, if the trend is down and we have these these these waves of FOMO, so let me just share my chart. I'll kind of give you a visual here of what that looks like. So, here we've got the and I like to look at the 30-inut chart for this, which is the the lefth hand chart. So, this is the the 30-inut chart of the NASDAQ. When the bars are are red, that's telling us the short-term trend is down. Uh, easy way to do that is really is price under the 20-day moving average? Is the 20-day moving average sloping down? That is the most basic way to to get an idea of a swing trading trend. But I have this red indicator here and this is FOMO buying. When people jump in and they buy stocks and we see this FOMO indicator jump over this this blue line which is a ratio of three which is three buyers, three people hitting the ask to every one person buying on the bid. So three times more people just willing to buy. They don't care what price they pay. They're just saying get me in. I'm missing out. The market had this huge bounce up. I'm getting left behind. And so when we get these this this spike level of FOMO, it usually is a significant indicator that the market is going to pull down short term only for a day or two. We had it again over here. It hit our threshold. People market gapped up. Everybody piled in. They felt like the market was putting in a bottom and then it sold off. And so this this is the type of of fear indicator that I use. This is a very short term. This is fear of missing out. Uh we also have when when the market is is like in an uptrend. And if we were to kind of go back um let's go back to an uptrend here. Uh we go back to an uptrend, we'll have we'll have the opposite. We'll see these spikes of panic selling, which is the fear index you're looking at. This is more of that type of fear, fear of losing money, and then we tend to see the market put in a very significant low. Usually after a big spike of panic, it usually uh bottoms out the next day. So we have this and then the market wants to rally and then we have another wave of panic and you get the panic it carries over to the next day and then you get that rally. So these are these are the short-term fear index that I look at. Fear of losing, fear of missing out and the market just pingpongs around uh through all of this. Um so I'm not I don't remember what your question was exactly, but these are the types of fear I'm looking at. And if we were to just fast forward >> we don't have any fear at this point yet of any sort. Yeah, the question is basically if if uh technical trends or indicators show extreme fear or greed in basically extremes of either direction, does that indicate to you that something is either overbought or oversold? And generally speaking, I guess the question would be if something is overbought and oversold at that particular moment, do you do the exact opposite? >> Right? So a good example of that is it really depends on the type of trader you are. So, for example, if the trend is down, um if the trend is down and we see panic selling, that is usually mean the market's going to want some type of short-term bounce. So, if you if the trend is down, you should be shorting the market, profiting from pricing going down. When price sells off and has a huge sell-off and you see panic spike up, you should be covering your shorts. You should be trimming off some of it. Lock in some gains and then boom, you can re-enter a position when you have FOMO. So, in a downtrend, you want to re-enter shorts. When there's FOMO, you want to enter a short here, enter a short here, over here, and play these quick drops. Uh, and in an uptrend, you don't really care about FOMO. You're looking for panic selling. In an uptrend, when you have a sharp drop and you see a spike in panic, when everybody's ejecting out of their trades, that's when you buy the dip. And then when you get FOMO, when the market pops and everybody's covering, that's when you trim off some of your you buy the you you buy the sell off and then you sell the rip. You buy the sell the FOMO spike. So you you kind of you don't put on opposite trades. You just use it to keep working yourself in and out of a position and and managing your risk through those waves of oversold, overbought, oversold, overbought. Uh and it just how you trade it depends. If the trend is up, you trade it one way. the trend is down, you trade it the other way. >> Now, let's move on to uh levels. I promised the audience we would give your levels, key levels to watch for the S&P 500. So, you said we could be looking at a short-term bounce uh bounce to where and then what happens after that. >> Uh yeah, well, we'll have to see how the how the bounce moves. Now, there, you know, when we look at this chart pattern, there's not a whole lot to go off of uh for this chart pattern. It's all a fairly fairly conservative type of moves here. like this this this pulled back. I mean, we can go back and look at a couple different levels. We can take a Fibonacci retracement saying from this low that we had, where is the first critical support level for the stock market? And the market always likes to pull back about 38%, 50% or 61. And depending on which one it finds support at gives us a different probability and a different upside outlook. So, right now there is still potential for this is the S&P 500 to drop all the way down to um 6,200. It's about a three and a half% drop from where we are. If it drops to this level, I would expect a bounce, a significant bounce. This not only is it a Fibonacci level, but if we just kind of was to box this zone in, you'll notice it's a very significant pivot zone. It was major resistance prior. It came out, it broke above it, it tested it, and now you know it's coming back to this level. So 6,200 is critical support. If it flushes down here, as I just mentioned, a couple more red bars or one big red bar in the market will spike the fear index. The VIX will go through the roof, the book call ratio shoot up, we'll see my green panic selling indicator spike, and then from there, we'll probably have a significant bounce where the market has a knee-jerk reaction. And then the question is how does it bounce? Depending on what it does here or if it trades sideways and barely bounces. Either way, it's going to be a bit seen as a bearish uh price action unless it shows a lot of strength. Then eventually it could change direction, kick back into an uptrend and we get long and then it's reset. It's just cleanse the market and maybe it wants to run for another 5 10 15%. Um again, nobody knows where it's going. You just have to identify the market characteristics, the trends, the sentiment, and then wait for those opportunities. So, at this point, let's just let the market figure itself out, maybe flush a little bit lower, create that bounce, and then we need to see, is this a bounce that rolls to the downside and sells off again, or is it going to be a bounce that actually turns into a new trend and shows signs of strength. We won't know. We have the same over here. The market sold off. This was uh beginning of last year. It put in a bounce, an oversold bounce, and then it went off into a huge sell-off. Everybody ejected out of the trades. It went into a high volatility move, and then right about here, it turned into a new uptrend. It it went from a bounce to a new trend and we played this move to the upside. And so, that's what we just need to wait and see. I know everybody wants like to know exactly what is going to happen and what price levels. You really just have to let the charts paint the bars. Each day we get a little bit closer to knowing which direction how we can play it. But right now it's like we just say these things could happen. And until it draws us a picture that we can actually trade where the price and sentiment confirm either a trend to the upside has started or it's peaking out and rolling over, we don't know until it happens. >> Okay, Chris, thank you so much. Let's end it here and uh follow you for more information in the meantime before you come back on next time. So tell us where we can follow you and where we can expect to learn from your work, Chris. >> Yeah, the best the best spot is to go to my YouTube channel at uh the technical traders. You'll you'll see I do uh not every day, but I do daily updates and videos on the markets there. I walk through things on a zoomedin level. Uh also my newsletter, the technicalraders.com. You can join the free newsletter there. Stay up todate with analysis and interviews or you can subscribe to my premium newsletter where I manage my portfolio. I share every position that I put on. I actually put the position on the same time as the investors. I only trade my portfolio. I don't dish out trades. I literally just give you the trades that I think are the best to grow and protect our portfolio and we navigate these markets together. Super educational and again just the technical traders either on YouTube or our domain. >> All right, we'll put the links down below. So, make sure to follow the technical traders there. Thank you so much, Chris. We'll speak again soon. Take care for now. >> Thanks, David. >> And thank you for watching. Don't forget to like and subscribe and use my code lin l i n when you sign up to koshi. Remember, new users who use my code will get $10 deposited to your account when you trade $10. That's lin l i n link down below or scan the QR code here.
Market Repeating 2022; Nothing Is Safe In Next Financial Crisis Warns Trader | Chris Vermeulen
Summary
Transcript
We're at a really critical turning point. If it drops to this level, I would expect a bounce, a significant bounce. Uh this, not only is it a Fibonacci level, but if we just kind of was to box this zone in, you'll notice it's a very significant pivot. I definitely wouldn't be shorting oil. The price of oil really consolidated. It's held its ground, and now it's trying to make another run. Listen, I think we're going to see at least a 30 to 40% pullback in silver. I think we're going to see a big 20 plus% pullback in gold. All the signs are there. It's Monday, March 30th, and stock markets are rebounding on the announcement that President Trump and his team in Iran are still in negotiations. The Dow jumped 300 points. The S&P 500 is up about 35 basis points. Meanwhile, gold is also up 1%. Bitcoin is up 1.5%. And oil, WTI crude is still trading near $100, back towards $100. Christopher Mullen, chief market strategist at the technical traders.com, joins us once more and he warns us that the markets have reached a critical turning point. And indeed, notwithstanding today's rebound, the S&P 500 is off to its worst start to the year since 2022. So, is this the beginning of another 2022 style crash when the markets retraced down by the order of 30 to 40% and everything goes down? All assets go down and it's just a terrible time for the 60/40 portfolio. We saw that in 2022. Are we about to see that again this year? Chris is going to cover this and much more today. This video is sponsored by Koshi. It's a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Sign up and use my code Lin Lin. Link in the description or scan the QR code here. New users will get $10 deposited to your account when you trade $10. Traders can put money down their favorite teams, events, elections, and more in all 50 states, including California and Texas and over 140 countries. Chris, welcome back to the show. Good to see you again. >> Thanks for having me, David. Always a pleasure. >> We missed you. And uh the markets miss you, so it's good to have you back. Uh last time you were on was a couple weeks ago now. Lots has happened since last year on. Oil has been top of mind for investors all around the world. Now, countries around the world um are actually witnessing an oil shortage. Uh I'm not talking about the US. I'm talking about countries in the Asian uh region in particular. The Philippines, for example, declared a national state of energy emergency. Uh Australia and New Zealand are equally feeling the pinch. And so oil naturally, WTI, has spiked um since we last spoke, now at $99 a barrel. I'm going to start with this piece of news today. So the Dow is up uh because this is from CNBC. The Dow is up 300 points this morning as Trump says he's in serious talks to end the operation in Iran. Meanwhile, he's also threatened to take Car Island and bomb Iran's oil fields if the straight of Hormuz is not opened immediately. So, how do we trade an environment where markets are whipsawing every single day depending on whether or not Trump is making an announcement that he's in talks with Iran? That seems to be the current environment. >> Yeah. Yeah, I mean there's definitely oil's got the spotlight. Uh it's I think it's a big chunk of driving the market. High oil pricing is going to put pressure on consumers. We we tend to see oil go up, stocks kind of go down. If oil goes up, we've got inflation worries. We've got uh yield rising concerns and of course that could send the bond market sharply lower, which they've already had a big drop. As oil spiked, we've seen uh bonds go in the opposite direction. How do you trade it? I mean, you definitely need to be an aggressive and active trader. You should be day trading it. It should be momentum trades. Uh, this is pretty much a landmine. So, you got to be extra cautious. Position sizing should be small. Just because something is moving big doesn't mean you put on a huge position and try to make a grand slam and change your lifestyle with one big trade. Unfortunately, that's what so many traders uh, unfortunately do. But you really do need to uh focus on position sizing because at any point during the day or you wake up the next morning, it could be dramatically against you. And so that is one of the big risks in this headline driven market. So I mean I think you've got to focus on the short-term price action and just know that hey this is active trading. This is a higher risk trade than normal. I believe just because it's every day something's happening in the news that seems to move the market and you just got to take it one bar at a time and don't don't look too big in the big picture. I think you've got to actively trade this because we could have a huge move one day and it it's given back the next. >> When political news move the markets on a day-to-day basis and you don't know what these political news items are going to be, are there specific positioning um strategies that you take that would basically head yourself in either direction? Basically, you're kind of when you think about it, the entire market is like an options play uh on let's say an earnings release on a stock. You don't know how the earnings uh report is going to look exactly after market hours. And so, you position yourself both ways for the volatility, right? >> No. >> Yeah. So, and we've done that, but our position isn't what most people's position is, right? So, about a a month or so ago, we moved out of we moved out of uh the equities market. So, we we flat. When the market gets like this, when it is like the stock market, for example, is trendless, like really it traded sideways in a range, the S&P 500 and the NASDAQ pretty from the o pretty much from the October highs. It's been like six months of just noisy chop. And when the market does that, you want to step aside. And uh and so that's what we did quite a while ago. I mean, we actually exited our gold and silver when positions went there. Silver was up at 113, gold was well over 5,000. And when when the market was giving all of these signals, that's that's when we took action. And so all of this noise that's going on right now, we are completely sidest stepping it. We're watching it from the side. We're just collecting daily interest safely as a position because we don't want to get involved with our portfolio in this type of noise. Now, there is opportunity obviously if you're an aggressive active trader, but as an investor, somebody looking to protect their capital who just wants consistency. They don't want to wake up every morning, you know, hoping and praying the market didn't move against them because this market right now is very dangerous. We got the S&P 500 breaking down from what looks to be a topping pattern. The NASDAQ is doing the same. We've got the dollar index trading at the 100 level on the verge of breaking out and rallying. If the dollar breaks out, that probably means we're going to see precious metals sell off. We're going to see equities crashing. Uh so we're at a really critical turning point and uh the best position in as a kind of a large investor trying to manage your your wealth and your lifestyle really is to just sidestep this. Don't get caught up in the news. Don't think you need to trade this. This is this to me should be watched from the chair. Watch just watching through the screen, not actually diving in and trying to pull money out through this type of volatility. It's just not my style. I know it works for some, but that's not what I focus on. >> Okay. Can you please turn uh pull up a chart of the S&P 500? And I want to show you something. The S&P is down about 7% year to date since the beginning of the year. This is this has been one of the worst years from a start of the year standpoint on record. In fact, this has been the worst start of the year for the S&P 500 since 2022 uh when we saw a similar pattern uh with the uh stock markets falling basically all throughout the year. It topped in early 2022, late 2021, and then it just kept falling. Is this the beginning of another 2022 when you just look at the pattern? >> Yeah, I I I think it is. what what we're seeing like right through this kind of blue box zone right through here. Uh we're getting almost almost identical sentiment and money flows happening here. So the very very same momentum is running out. We're starting to see all kinds of chaos. Um sentiment is shifting. Money is flowing, you know, away from stocks. So we're in a very similar situation. And that's what I think people need to to be aware of is you never know which one is going to turn into a you know it could take um two years. It could be a year-long selloff and a year to recover or it could be like a 2008. It could take multiple years to recover. Five, six, seven years to recover. We never know which one of these pullbacks is just a quick pullback and and for it to recover. But when we look at the S&P 500 and the NASDAQ, I mean, we've got this really critical um support level right through here, which it has clearly broken down, and the market's gone from a series of making higher highs and higher lows to now it's got a very strong sell-off. I do feel like the market's oversold. I think we could we could see the market whenever it finds a bottom here, we're going to see some type of knee-jerk reaction bounce back up, just like how the market makes a series of of higher highs and higher lows. Once it breaks to the downside, it kind of flips scenarios. And the NASDAQ has kind of been a leader in this space in terms of it breaking down. It it somewhat has broken down as well and more so a little bit beforehand, but it's breaking down and this is a big powerhouse. Um, you know, along with the Magnificent 7, which have broken down a lot sooner. So, I think people need to be aware this what we're seeing here is very similar to the 2022 peak. And the question is, you know, is it just a baby bare market, something where we correct for a little while and recover, or is it the start of something uglier? And that's what we just always need to be prepared for. I talk about it all the time. I'm very bearish on this market. Uh it doesn't mean we're betting on falling prices. We're actually just, you know, watching it, stepping aside. We got out of the market um over over in this area and we're just letting it unwind. And eventually, we'll be playing inverse ETFs. When this does give us opportunity, we'll be betting on falling pricing because that's a great way to pull money out of the market, but we definitely want to be confirmed in a bare market. We want to see the trend being down. >> In 2022, the Fed's raising rates uh their tightening policy was probably the main catalyst for a market decline, a broad market decline, not just stocks, but gold, metals, uh bonds as well. It was just a bad year for a 60/40 portfolio. What could be the catalyst this year, Chris, for continued downward momentum? >> Yeah, I I think I think there's going to be a lot of pressure from two things. Uh the the I think one of the deeper underlying ones I think will be actually the AI space. I think it's going to be rewriting a lot of business models. Uh it's going to undercut a lot of businesses who whoever doesn't bring AI in is going to get left behind. they're going to be, you know, um AI rich companies are going to be able to operate at a much lower rate, very efficient and um and potentially undercut other players or just excel with better products and add more value and provide uh things that people need. I think that's deteriorating. We've seen that in the software space definitely hit very hard. But I think we're going to see AI and robotics be a huge shift that's going to I think reset and cleanse the market. I think that's going to be one big player. The other one more near-term is I think is crude oil. When we look at the uh price of oil, I think this could be one of the big uh one of the big resets that could spark what's happening. So if we look at oil and we look at the significant low here and we look at this this spike high and this pullback using a Fibonacci extension. Now I find this tool is extremely uh accurate. There is potential for oil to go to about 140. I know there's people calling for 200 oil, all that stuff. Based on the chart pattern right now, the first major level is 140. And so that is going to obviously wreak havoc uh across the board. That's a you know 37 38% uh move to the upside. I think energy stocks could benefit from this. I think they might want to they might be able to move higher. Um but obviously this is going to dramatically hurt um everyday investors. I mean, just at the pumps here, we almost had $2 a liter just down the street from where I am, which is extremely high. I don't know what that works out to be in gallons for the US, but I think it's probably almost the highest, if not the highest price we've ever had. And I believe this whole issue here is actually kind of just getting started. And if oil prices go up, we're probably going to see stocks tick down. It's just going to burn a hole in in people's money. Any excess cash they have is going to start going through to fuel costs. Inflation is is already through the roof. Imagine having to pay for this fuel to to to generate products, bring products over, all of that stuff. So, I think oil is the most imminent kind of direct correlation. If oil pops and rallies here, it's going to hurt the stock market. It's going to hurt the bond market. I think is going to get absolutely hammered. You definitely, as you mentioned, David, in 2023, uh 22 to 23, it was terrible for the buy and hold investors, the 6040. If you hold stocks and bonds, you are going to get hit on both sides. And I think you're going to get absolutely beat up. I did a video on this the other day uh on my YouTube channel talking about the devastation we could go through and how interest rates could spike dramatically and the average investor is going to just get absolutely pummeled here right when they can't afford it time-wise. They don't have the time to make it back. We could go for a big reset. So oil to me is kind of the kingpin and um on the sidelines protecting your capital, protecting your wealth. You know, if you can earn 4% without any risk in a minefield of market movements right now and un you know news you just can't predict whatsoever. Uh I think it's one of the best plays right now. It's not about making a lot of money. It's about protecting what we have because we're on the cusp of something pretty ugly. >> Well, would you be short oil right now? Let me just pull up this uh particular trade from Koshi. It's a prediction market. It's based in the US. One of the largest traders are uh predicting uh gas prices in the US this month. So 97% believe uh above $3.98 a gallon. Uh this is in US prices and uh I think the consensus is that prices won't change much uh for for the end of the until the end of the month at least which is next you know in 30 days. Uh we're already on the at the end of um uh well no this one is for $4 on March 31st. Let me pull up something else on um for a for a farther out forecast, but I want to get your take on oil first and then I'll post something of it. >> Yeah, I I definitely wouldn't be shorting oil. When when we saw this great big spike a couple weeks ago, it definitely looked like a topping candle, but the market the price of oil really consolidated. It's held its ground and now it's trying to make another run. If anything, I would be long oil here. I mean, we're not in a oil energy position right now, but this the trend is up. The pattern is bullish, and the chaos, I don't think, is coming to an end, and we keep hearing like there's talks, but all I seem to hear is there's more threats and more takeovers wanting to happen. So, uh, you don't want to fight the trend. The trend for oil is up. Uh, shorting it right here, uh, is to me is a higher risk play. I think you're better to own it than short it. So, here's one with a longer term outlook. How high will US gas prices get this year above 440, which is higher than most in most jurisdictions right now? Seems to be the consensus forecast. Chris, what happens when oil stays very high? Walk us through what happens with the rest of the capital markets. You already talked about what would happen to consumer spending. Logically, yes. people have less money uh to spend on other things as a hole in their pocket is burned through by paying for more oil. I get that. So what happens to capital markets when that sequence of events occurs? Yeah. Well, we saw this kind of back, you know, during the last major reset, we saw every time oil would tick up back in in the early 2000s, we'd see the stock market go in the opposite direction. It was is very related. But I mean, I used to own and run a uh an importing business. We used to bring everything in from overseas container loads and I'll tell you energy pricing is a huge factor not only not only for transportation which everything is shipped obviously but oil is is used petrol is used for every product. It's crazy. And so if it spikes up or there's delays you can't get it. Uh it really is just going to wreak havoc through more expensive pricing. Obviously once products can't be produced because they're they're missing out on it. Then whatever it is in inventory, people just the store owners jack the price up. Just like oil, the second there was talk of of war unfolding, the gas pumps spike the price. Not like it cost them more yet, but they're already starting to gouge and prepare for it. So through the whole, you know, if oil prices go up, everything around the world pretty much goes up in pricing. And when it goes up, people have to spend more money to do the same things, which means they they have less to invest. they have uh less to buy stuff, you know, uh discretionary products or whatever it is and travel and all that those things. So, just higher oil pricing just puts a squeeze on everybody. Now, there's a big delay between producing products and and the end user. So, if it holds up for a while, it's going to do a lot of damage versus a spike. a spike won't be too bad, but you know really oil would need to um drop in the next month or two and we need to see the the you know the the traffic flow straight get opened back up again or or we're going to start to see I think inflation creep up and investors are going to start or consumers are going to start closing their wallets and cutting services and costs. I mean, we're already seeing it, but uh it's going to be even more. And then earnings drop and then, you know, investors start to sell off stocks because they see the momentum stalling. It's a huge huge long cycle that unfolds. A blip in oil is not bad, but over two or three months, it starts to create issues. >> Chris, would you be long oil companies right now? I know you're bearish in the stock markets overall, but what about the oil sector in particular? >> Yeah, the the oil sector has done really well. I mean, we did trade it a few months ago um with our band strategy. The best asset now is it was starting to emerge. We we played that. We got in, we got out, we hit our our targets and had our our strategy there. We're not long it. I Yeah, you could be long. Here's the thing, though. As you just mentioned, the stock market is technically in a downtrend. It's not favorable to hold stocks. If the tide of the ocean is going down, you shouldn't expect your boat to stay up. Usually, most boats or most stocks go down when the stock market goes down. Now, there will always be that needle in the haststack. What stock, what sector is bucking the trend. The energy space is that it very difficult to know which one is going to be until it's already happened. Um, you could be long energy stocks. I kind of feel like they're they've had a big run. I feel like they're becoming the crowded play. I think like we could take a look at XLE for example. If we look at the XLE chart, you can see it's had a huge run uh moving to the upside. I think there obviously is more potential, but this to me feels a little bit overdone. I'd be looking for some type of pause or pullback before I get long. I don't like to buy into something that goes uh quite this strong to the upside. So, I'm not a big fan of buying stocks when the stock market is going down because at any point that the one sector leading the way, bucking the trend, could fall in line with the rest of the stock market. And when it is a news-driven move like this, these big rallies can be wiped out in days. Uh so they do carry that elevator risk. You know, it takes a staircase up and the elevator down. Uh so you got to be aware that trading these stocks is just like the energy oil space. At any point there could be a massive red bar. It's everybody's been trading energy stocks. Everybody I think is piled in. And when the news changes direction, it's going to be a mass exodus and a huge probably set of red bars to the downside. >> Okay, I want to come back to stocks. So, uh Chris, we'll get your outlook on key levels for the S&P 500 uh to watch for the next coming months. Uh before that, we're going to jump into precious metals. So, write down in the comments below what you think uh Chris is going to say in regards to his outlook and uh let's get some discussion there. Chris, I think one of the themes that happened uh or have been um popular on the internet since you uh last came on the show is that gold is no longer a safe haven play. Let's pull up a chart of gold and I'll show you what I'm talking about. Gold has been acting pretty much like a NASDAQ or S&P extension, moving in lock step with stocks, moving down when there's bad news with Iran and moving up uh when the opposite happens, when there's good news. like today for example when Trump has announced that there's more negotiations with Iran. So the point is gold is not doing what a lot of investors would expect to do for a traditional safe haven asset which is actually hedge against equity volatility. Its volatility is moving in lock step with stock market volatility. Can you comment on this? >> Yeah. So I mean gold has been doing what it should do for the last several years. It's been going up. Tensions have been rising. things have been looking more bleak and and and that's why we've seen uh both gold and uh silver moving higher. Uh now you know the typical kind of scenario when it comes to the stock market or investing in general is it's like buy the rumors sell the news. I think I think gold has been moving up with anticipation of all kinds of things falling apart. War kicked in. I mean I think we went into this capitulation top. So, gold did what it was supposed to do, but now we've hit this this tipping point where I feel like it's put in a s significant high and now it's it's going to start moving with the stock market. And this is the fear. If the stock market sells off, then we're probably going to see precious metals sell off. And this is what I've talked for a long time is nothing is not many things are safe when we go into a financial crisis or or a bare market. And so we are seeing, you know, I think a lot of people got rattled on this move. A lot of people who have held through here, they're really starting to panic and feel the pain. And now we're just seeing it move like the stock market because I think the safe haven play is somewhat moved out. There's so much volatility, it doesn't feel that safe anymore. And it looks like it's got a pretty major major top in the price action. Now, if we use Fibonacci extension just based on this initial drop and this bounce to the upside, we can see that gold ended up hitting our target. And I'm not sure if you and I Yeah, we talked about this a long time ago. These are inside bars. We have this big red bar and then all of these days coming all the way up to the top. And I talked about how this is a bearish price pattern. If it gets rejected at the top of this bar, look out below because it's going to sell off and it's going to want to come down to the 618 or this previous low and down to the 100% measured move. And that's that's what it's done. And so right now, gold to me is in this to me short-term wise, it looks like it has um put in a major top. I don't want to hold it. We we got out uh way way up here before that drop. Uh but now it could potentially build a giant bull flag here and who knows it maybe it takes a year. Uh and then of course if it starts to break out and it shows signs then you definitely want to get long and catch that next move up. But what we don't want to do is hold on to something that clearly shows it has run out of steam. That is not the play that everybody that that it used to be. It's not that safe haven play right now. And it could actually unwind and come on down a whole lot lower. we could see 3,600 fairly easy in gold I believe. So right now we were in this this pause mode and uh I mean I was with with you in um at VREC in in Vancouver when these prices were spiking and I mean I was on the panel saying like listen I think we're going to see at least a 30 to 40% pullback in silver. I think we're going to see a big 20 plus% pullback in gold. All the signs are there. I was talking to people on the floor that had never bought metals before and they had just bought silver at like 110 and all this stuff or 106 or 108. Um, and so when all these signs are there, you got to be cautious. And then prices now confirm that. So my view on on gold right now is it's not a trade, it's just let it mature. let it build a pattern and if it collapses and goes into a huge sell-off, it'll become an amazing buying opportunity because long-term I am extremely bullish on precious metals. All the fundamental data, all the economic data, everything going on, the central banks is the most bullish sign ever. But it doesn't mean price is going to just keep going up that we'll have these corrections. So, we just need to let gold figure itself out. And you're right, when we have broad market selling, it will move with the price of the stock market. And that's why a bare market is broad market selling. It's everybody's scared. Everybody's selling everything. And that's the phase that gold and silver are in right now. So, uh, I think if you're a long-term gold investor, you either have to ride out more of a roller coaster or you just got to give it time and it will recover, but it might still take a long time. the the price pattern that we have is actually very similar, especially in silver, to what we saw in 2011 where everybody, you know, thought metals were going to the moon and then it took 10 years to come back. It sold off. I'm not saying it's going to happen, but you definitely don't want to waste two, three, five years waiting for metal to come back when you could move somewhere else and not have to watch your your account go down. You could potentially buy it at a lower price or buy it later as it's starting to go higher so that you can just catch the upswing and not have to ride the the wasted time in the roller coaster. >> When you Let me just show my screen. >> Sure. >> Real quick. If you have something like this, this is gold and copper moving in lock step together. These two assets have not historically moved so closely together as we are seeing right now. By right now, I mean over the last year and especially over the last couple of months. I know this is a broad market selloff, but when metals start moving together, does that signal something bigger in the economy where perhaps markets are large? >> Um, I'm not sure. I don't follow copper too closely. I I think when things start moving together, it more so just means it's everything is part of the same tide. And if and and if the and if the masses are naturally getting more worried and they're selling, it just it means they're all going to move together. To me, it's a bearish it's a bearish line. we should be seeing gold go higher and stocks go down, but we're I think we're maybe already past that point and now actually people are just like I don't know what's going on and the charts of both gold and silver are you know those topping patterns they put in are pretty scary. I mean that was that's a quite quite the noise uh quite the volatility. It's it's not a good sign. And so I think people have just turned turned the page. I think they've gone from a lot of people have gone from precious metals are the play to now they're like I'm kind of scared to get in. And you know, if you look at the the volume on like silver and stuff like that, it's just dried right up. Nobody's interested in silver anymore. And if you take try and sell your silver at like a pawn shop or or something like that, they don't want it. Every pawn shop is full of silver. I don't know exactly what that means, but it definitely means uh people just don't want silver at this point. And um the volatility has got people shaking up. >> So even if somebody hasn't gotten into gold and silver right now, he should probably stay out. Is that what we're talking about? I believe I I mean it doesn't matter like so many people always think you got to buy low. You know, you can buy high and you can buy higher. So, you know, if the market rallies from here and then it starts to break out to new highs, you can just jump in and buy it. Even at an all-time high, it's still going to have a massive potential rally, uh the next big leg from this potential bull flag pattern that gold is forming is huge. So, who cares if you pay a higher price? But what I try to avoid is I try to protect our portfolios so they don't go down in value substantially and so that we also don't waste years. Like if if gold and silver take a year and a half to go sideways, not only are you going to not make any money, it costs you money to store it. you're every day you've got the stress of hoping and praying they don't keep collapsing where you could just step aside in a cash position which is the most boring position ever but you could still make your your 4% every year and dramatically outperform holding metals and then just jump into metals when they start the next rally. I like to be involved with something that is on the run. I don't want to hold something chopping around that shows signs of weakness which is the pro what the precious metal space is showing right now. >> What about stuff like this? Let me show you the CNN fear and greed index which is currently at extreme fear. I was surprised when I pulled this up just now. I thought it would be maybe leaning more towards neutral especially on a day like today when the markets are rebounding. Uh but extreme fear is what they have. It's an amalgamation of a few technical indicators. Are you seeing extreme fear flashing on your dashboard uh based on the trackers that you follow, Chris? >> No, we're we're actually not seeing extreme fear. Um, yeah, that that greed index that will will kind of gauge probably a different group of people, but based on how I follow with my sentiment tools and and indicators. We're not seeing actually real big panic selling just yet. Um, there's no doubt the market looks oversold, but I I think the market is ready for a bounce, but we're not seeing full-on panic selling at this point. We haven't seen it in a little while. And I think the stock market could have maybe another leg down, another big red bar or two to the downside. And I think that will be just enough to to trigger some panic selling. I mean, I follow very short-term levels that that fear index is probably looking more so at swing traders and investors. I look at more or less intraday spike levels because that's actually what to me gives me the most imminent, okay, this looks like a pivot low today type of thing. Um, but we're not seeing, I don't think, panic, fear just yet. when something does move into the extreme level one way or another, fear or greed, is that a usually a contrarian indicator for you? >> Yeah. So, for example, if the trend is down and then we see FOMO buying on the charts, meaning people are piling in, they're they're buying stocks, uh that usually is an indicator that the stock market is going to um uh probably sell off. So, if the trend is down and we have these these these waves of FOMO, so let me just share my chart. I'll kind of give you a visual here of what that looks like. So, here we've got the and I like to look at the 30-inut chart for this, which is the the lefth hand chart. So, this is the the 30-inut chart of the NASDAQ. When the bars are are red, that's telling us the short-term trend is down. Uh, easy way to do that is really is price under the 20-day moving average? Is the 20-day moving average sloping down? That is the most basic way to to get an idea of a swing trading trend. But I have this red indicator here and this is FOMO buying. When people jump in and they buy stocks and we see this FOMO indicator jump over this this blue line which is a ratio of three which is three buyers, three people hitting the ask to every one person buying on the bid. So three times more people just willing to buy. They don't care what price they pay. They're just saying get me in. I'm missing out. The market had this huge bounce up. I'm getting left behind. And so when we get these this this spike level of FOMO, it usually is a significant indicator that the market is going to pull down short term only for a day or two. We had it again over here. It hit our threshold. People market gapped up. Everybody piled in. They felt like the market was putting in a bottom and then it sold off. And so this this is the type of of fear indicator that I use. This is a very short term. This is fear of missing out. Uh we also have when when the market is is like in an uptrend. And if we were to kind of go back um let's go back to an uptrend here. Uh we go back to an uptrend, we'll have we'll have the opposite. We'll see these spikes of panic selling, which is the fear index you're looking at. This is more of that type of fear, fear of losing money, and then we tend to see the market put in a very significant low. Usually after a big spike of panic, it usually uh bottoms out the next day. So we have this and then the market wants to rally and then we have another wave of panic and you get the panic it carries over to the next day and then you get that rally. So these are these are the short-term fear index that I look at. Fear of losing, fear of missing out and the market just pingpongs around uh through all of this. Um so I'm not I don't remember what your question was exactly, but these are the types of fear I'm looking at. And if we were to just fast forward >> we don't have any fear at this point yet of any sort. Yeah, the question is basically if if uh technical trends or indicators show extreme fear or greed in basically extremes of either direction, does that indicate to you that something is either overbought or oversold? And generally speaking, I guess the question would be if something is overbought and oversold at that particular moment, do you do the exact opposite? >> Right? So a good example of that is it really depends on the type of trader you are. So, for example, if the trend is down, um if the trend is down and we see panic selling, that is usually mean the market's going to want some type of short-term bounce. So, if you if the trend is down, you should be shorting the market, profiting from pricing going down. When price sells off and has a huge sell-off and you see panic spike up, you should be covering your shorts. You should be trimming off some of it. Lock in some gains and then boom, you can re-enter a position when you have FOMO. So, in a downtrend, you want to re-enter shorts. When there's FOMO, you want to enter a short here, enter a short here, over here, and play these quick drops. Uh, and in an uptrend, you don't really care about FOMO. You're looking for panic selling. In an uptrend, when you have a sharp drop and you see a spike in panic, when everybody's ejecting out of their trades, that's when you buy the dip. And then when you get FOMO, when the market pops and everybody's covering, that's when you trim off some of your you buy the you you buy the sell off and then you sell the rip. You buy the sell the FOMO spike. So you you kind of you don't put on opposite trades. You just use it to keep working yourself in and out of a position and and managing your risk through those waves of oversold, overbought, oversold, overbought. Uh and it just how you trade it depends. If the trend is up, you trade it one way. the trend is down, you trade it the other way. >> Now, let's move on to uh levels. I promised the audience we would give your levels, key levels to watch for the S&P 500. So, you said we could be looking at a short-term bounce uh bounce to where and then what happens after that. >> Uh yeah, well, we'll have to see how the how the bounce moves. Now, there, you know, when we look at this chart pattern, there's not a whole lot to go off of uh for this chart pattern. It's all a fairly fairly conservative type of moves here. like this this this pulled back. I mean, we can go back and look at a couple different levels. We can take a Fibonacci retracement saying from this low that we had, where is the first critical support level for the stock market? And the market always likes to pull back about 38%, 50% or 61. And depending on which one it finds support at gives us a different probability and a different upside outlook. So, right now there is still potential for this is the S&P 500 to drop all the way down to um 6,200. It's about a three and a half% drop from where we are. If it drops to this level, I would expect a bounce, a significant bounce. This not only is it a Fibonacci level, but if we just kind of was to box this zone in, you'll notice it's a very significant pivot zone. It was major resistance prior. It came out, it broke above it, it tested it, and now you know it's coming back to this level. So 6,200 is critical support. If it flushes down here, as I just mentioned, a couple more red bars or one big red bar in the market will spike the fear index. The VIX will go through the roof, the book call ratio shoot up, we'll see my green panic selling indicator spike, and then from there, we'll probably have a significant bounce where the market has a knee-jerk reaction. And then the question is how does it bounce? Depending on what it does here or if it trades sideways and barely bounces. Either way, it's going to be a bit seen as a bearish uh price action unless it shows a lot of strength. Then eventually it could change direction, kick back into an uptrend and we get long and then it's reset. It's just cleanse the market and maybe it wants to run for another 5 10 15%. Um again, nobody knows where it's going. You just have to identify the market characteristics, the trends, the sentiment, and then wait for those opportunities. So, at this point, let's just let the market figure itself out, maybe flush a little bit lower, create that bounce, and then we need to see, is this a bounce that rolls to the downside and sells off again, or is it going to be a bounce that actually turns into a new trend and shows signs of strength. We won't know. We have the same over here. The market sold off. This was uh beginning of last year. It put in a bounce, an oversold bounce, and then it went off into a huge sell-off. Everybody ejected out of the trades. It went into a high volatility move, and then right about here, it turned into a new uptrend. It it went from a bounce to a new trend and we played this move to the upside. And so, that's what we just need to wait and see. I know everybody wants like to know exactly what is going to happen and what price levels. You really just have to let the charts paint the bars. Each day we get a little bit closer to knowing which direction how we can play it. But right now it's like we just say these things could happen. And until it draws us a picture that we can actually trade where the price and sentiment confirm either a trend to the upside has started or it's peaking out and rolling over, we don't know until it happens. >> Okay, Chris, thank you so much. Let's end it here and uh follow you for more information in the meantime before you come back on next time. So tell us where we can follow you and where we can expect to learn from your work, Chris. >> Yeah, the best the best spot is to go to my YouTube channel at uh the technical traders. You'll you'll see I do uh not every day, but I do daily updates and videos on the markets there. I walk through things on a zoomedin level. Uh also my newsletter, the technicalraders.com. You can join the free newsletter there. Stay up todate with analysis and interviews or you can subscribe to my premium newsletter where I manage my portfolio. I share every position that I put on. I actually put the position on the same time as the investors. I only trade my portfolio. I don't dish out trades. I literally just give you the trades that I think are the best to grow and protect our portfolio and we navigate these markets together. Super educational and again just the technical traders either on YouTube or our domain. >> All right, we'll put the links down below. So, make sure to follow the technical traders there. Thank you so much, Chris. We'll speak again soon. Take care for now. >> Thanks, David. >> And thank you for watching. Don't forget to like and subscribe and use my code lin l i n when you sign up to koshi. Remember, new users who use my code will get $10 deposited to your account when you trade $10. That's lin l i n link down below or scan the QR code here.