Are we at ‘peak financial risk’? Chris Vermeulen, Founder & CIO of The Technical Traders, certainly thinks we are. In this chart-packed interview, Chris sits down with James Connor to uncover the critical risks facing all asset classes, from surging interest rates and real estate oversupply to overbought markets.
Chris explains why the market is currently in a “topping phase,” how real estate could trigger another financial collapse, and why a financial reset may be unavoidable. He also shares actionable insights on gold, the stock market, and capital preservation strategies to help you navigate the potentially turbulent times ahead.
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Chris Vermeulen 0:00
We are at this red zone, I think, for almost all asset classes, peak financial risk, whatever you put to work right now, I think has got a ton of downside risk and there’s very little upside.
James Connor 0:14
Hi and welcome to wealthion. I’m James Connor. Well, here we are in a new year with a new government and new policies, but a whole lot of uncertainty. And if you need help navigating this uncertainty and the financial markets and you would like to speak with a financial advisor, go to wealthion.com/free once again, That’s wealthion.com/free
James Connor 0:40
Hi, Chris. Thank you very much for joining us today. How are things
Chris Vermeulen 0:42
in Toronto? Hey, Greg, James, always a pleasure and having you here and the same
James Connor 0:47
to you. Well, there’s so much happening in the world, and I thought I should have a discussion with you to get your views on what’s happening in the financial markets. And we have a new administration who wants lower taxes, higher tariffs, deregulation, deportation, some people say these policies will be inflationary, and it’s going to lead to higher inflation and therefore higher interest rates. Other people are saying it will not. And we also have q4 numbers coming out in the next couple of weeks, we’ve had a very strong jobs number. All of these things are creating a whole lot of uncertainty, and, I guess, volatility in the markets. So why don’t we just start with the big picture? What are your views of the US financial markets as it stands right
Chris Vermeulen 1:29
now? Yeah, as you mentioned, there’s so much going on. As you know, there’s two extremes. People thinking bullish, bearish, what’s going to happen? The reality is, no one really knows. And kind of which probably kind of boils down to what I do, which is follow the price action a technical analyst. So, I mean, we can look at the markets from a few different perspectives. When we look at the big picture, I’m pretty bearish on the overall economy. There has been some some good jobs numbers and things like that, unemployment. But in the grand scheme of things, if we look, just look at a high level, just some basic stuff here. Job openings, really, in the last couple of years continue to go down. So there’s fewer and fewer jobs we had kind of the COVID surge that took place. And so I think we’re starting to see things slow in terms of the economy. Now, the economy still is showing strong signs, but all the data is always very delayed in terms of when we get it to what’s really going on right now. And so if job openings are slowing down, I mean, we’ve already seen, if we look at the unemployment rate, it’s already started to rise. Now it came down pretty good last week. But in the grand scheme of things, the trend is up. And I think we’re actually very similar to kind of what we saw back in 2008 here, where we saw a little bit of a hiccup in unemployment just before the economy kind of fell apart, and then we saw unemployment shoot higher. So, you know, one or two good numbers here really doesn’t mean a whole lot to me. The overall analysis is the trend is your friend, something trending up is more likely to continue than it is to reverse, and that’s kind of the scenario that that I feel is going to happen. We had a little tiny hiccup back in the 2000 phase before it took off. But overall, I believe we’re going to see a huge spike in unemployment. I think it’s going to bleed over to many things. We got delinquencies and credit cards spiking. We’ve got delinquencies in residential, commercial mortgages. Mortgage rates continue to climb fairly aggressively, which is going to hurt the real estate space. And I think this is, I think real estate is actually going to be one of the tipping points that actually kind of triggers the economy to slow down again. We still have strong numbers right now, but I think we’re about to see it come around. So right now, if we take a look at new single family homes for sale, we are starting to get way up to the level that we got back in, 2006 2007 so there’s a lot of supply, a lot of construction going on. If we take things a step further, during COVID, we had this huge spike. This is pending home sales where kind of the world froze, and people obviously couldn’t close deals, didn’t want to buy a house, and pending home sales fell to a record low. Look where we are now. We’re right back at all time record lows. Homes are not selling. People don’t want to buy anything and and what that means is we have a huge surplus of homes. So if we were to take a look at the medium, single family price homes, we had the COVID surge in real estate pricing. And this is the average price now, more or less from a technical trader standpoint, when we look at a chart like this, this is a large rally up. This can be seen as a bull flag, and potentially real estate goes and doubles or triples again in the next couple of years, which I highly doubt, or this is a major topping pattern. And what’s happened here with those? Nope, the low pending sales means homes aren’t selling. So in my town where I am, there was about 6080, homes for sale right back over here. During the peak. Now there’s almost 700 homes for sale, and nothing is selling. So inventory is building up. No one wants to lower their pricing. And once the housing housing price starts to pick up speed to the downside, this, to me, is going to be the tipping point for the economy, where pretty much all investors who invest in precious metals and the stock market own their own homes. They usually also have rental properties, and they’re going to start to see the pain on both sides. Their real estate values are going to decline sharply. They’re going to be down hundreds and hundreds of 1000s of percent, of dollars per property. And then they’re going to see the stock market slowly get weak, and they’re going to be like, Wow, I’m getting hit on both sides. My good old real estate now my investment portfolio is falling. That’s going to make people close their wallets, and then the economy is going to dry, and then we’re going to see that unemployment shoot up like we saw in 2008 because businesses start laying off, sales slow down, because everybody’s now feeling the pinch. So that’s kind of my high level view. And they get I mean, I’m weeding out a ton of news. I don’t follow the news and economic data that much. I follow price I follow trends. And if you just follow that, it really doesn’t matter which way they go, because if something starts to go higher, we get back on board. We ride that trend. If it breaks down, we don’t want to hold it, and we want to find a different asset class to move into or benefit from falling prices through shorting or inverse ETFs or or have you. So that’s kind of my, my high level. And as you and I have talked, last time we were on wealthy on here, we talked about the four stages of the stock market, and I believe we’re in a stage three topping phase. And you know, we have a feeding frenzy right now with people piling into arc, ETFs, all the aggressive stuff. You know, AI still, we’re seeing solar, clean tech, Bitcoin. People are bullish. And typically that is this phase, this complacency phase. People think we’re starting a new major move up, but I believe we’re about to go into a massive landslide and a reset. So that’s kind of my high level view of the market, and what will change the sentiment of most investors, which it really just takes time for this to unfold. And I think we’re getting closer and closer.
James Connor 7:13
Yes, and you were talking about the unemployment rate, and you think it’s going to continue to climb. I think it bottomed around three, five or three, six, and it’s been going up ever since slowly. But when I speak to a lot of economists and a lot of macro guys, that’s their biggest concern. They think the unemployment numbers are going to start ticking up as we head into q1 q2 and that’s going to create a downward movement in both the real estate market and also the equity markets, and I guess that’s going to impact everybody’s wealth effect, because that’s how, that’s what’s also contributing to
Chris Vermeulen 7:47
this people’s wealth is in real estate. So and, yeah, it’s, it’ll spark people to be nervous and to tighten their wallets for sure when they see their housing pricing going down. Okay,
James Connor 7:57
so why don’t we look at the S, P and the Nasdaq now, they both had tremendous years. Both up 25% give or take. In fact, the last two years have been very good for both the S P and the Nasdaq. When you look at the S P the longer term, what do you see? Well,
Chris Vermeulen 8:12
I mean, if you want to go longer term, the the weekly chart here is, is a very good view of the longer term. And as we’ve mentioned before, the key to success in investing is to hold assets that are going up in value. And so after the COVID crash over here, the market was in a rising tide environment, a bullish environment. And then 2022 we went into a falling environment. We are still, from a big picture view, we are still in a bullish phase. We’ve we’ve had a pullback. There’s a little bit of weakness. What is happening underneath the hood of the stock market, and all the data is actually very similar to this move right over here. So I think we are on the cusp of another mini bear market, or potentially something a whole lot bigger. I think it’s eventually going to get much, much worse than 2022 but that’s kind of where we are. We’re still bullish longer term. But when we zoom into the shorter term charts and look at like the NASDAQ, for example, this is the NASDAQ, kind of short term trend charts. We have gone red, and the trend is down, and we’re seeing money kind of starting to move out of the equity space, and we’re starting to see kind of gold hold its value. We’re starting to see the dollar move up. People are looking for safety. And so there’s a, there’s a mixed signal. Long term, you’re still bullish. Short term, we got to be very cautious. We don’t really want to be holding stocks, because they could fall another four or 5% very quickly here. And if we look at a kind of this is a the past year of the SP 500 there was a very interesting setup unfolding. So where we are right here. We also had a setup over here, another one back here, over here, and then this one over here. Now, what’s interesting about all of these, because we are in a longer term, up. Trend. These dips tend to be standout lows, and it’s hard to see, but there’s this red indicator on the bottom. These rented red indicators here tell us when there’s a reset in the financial system, a short term cycle reset. So this is when multiple cycles come together. They create a cycle low. There’s usually panic selling in the markets, and it creates these standout lows. So we have to just see what’s going to happen over the next over the next probably week or so, this market could have another push higher, and the Nasdaq has about 11% upside from where it is. For one more kind of hurrah, one more push up. SP, 500 could go about five or six or 7% to the upside as well. So there are mixed signals. Just as you were saying, James, with all the economic data, some people are super bullish, bearish, mixed signals with the data itself as well. So are the charts, and that’s where we have to step back and pick the strategy and the time frame you want to focus on and and make sure you navigate these markets accordingly. The markets are not easy, but you definitely have to pick strategies and timeframes and try to focus on those not get caught up in the Daily News and and chop of the markets.
James Connor 11:10
You raise a good point. I got to start doing that, because when you’re on social media all the time and you’re looking at all these negative headlines, it really throws you off. It does get off of those platforms. But hey, can you put up the short term NASDAQ chart again? Sure. And I just wanted to ask you, what was the specific date where it started coming off and where it started going red? Yeah.
Chris Vermeulen 11:36
So it started to go red. This was December 19,
James Connor 11:41
the 19th. So I think that corresponds with the Fed announcement. They did cut rates, but they came out and they gave they signaled their cuts for 2025 they went to two cuts. Their previous guidance was for three cuts. So I think that really through the market for a bit of a
Chris Vermeulen 12:00
for sure. I think, I think the low unemployment rate and the rates, the interest rates, not really going down. I think that has got investors nervous. If interest rates are going to stay high, then a lot of people are very nervous stock market is topping. A lot of people missed last year’s rally because they’re too worried about it topping. And, you know, high rates. Mean, hey, well, I can just get out of the stock market, and I could move into like, you know, somewhere with no downside risk, and take my four and a half, four and three quarter percent and have zero risk and sleep at night. And that’s going to be kind of like the same for like, I see it kind of as the real estate market, if rates are going to stay where they are, like, the 10 year yield, 10 year note. I did some Fibonacci on it the other day, and it shows that we could go all the way to 8.34% to the upside. And it’s crazy if interest rates go that high, because that’s going to kill the stock market, I think. And why would you want to own real estate if you can make 8% in the bank, I’d much rather just liquidate everything and make 8% safely in the bank until the markets reset, and then reinvest. So this worry about rates not dropping, and there’s also lots of people talking about rates going up still, is going to wreak havoc on the real estate market, on the stock market. I mean, things could get really ugly this year, and of course, just have to follow see how things unfold. And I know a lot of people keep telling me, like, well, Trump will never let that happen. He’s got too much real estate. There’s no way rates are going up. But I think people need to understand just one person can’t control the wave and the mentality of the world. Like, once these big cycles take place, these economic cycles, the ball starts rolling. One dude with a couple policies isn’t probably going to be able to stop it. Whenever we go into a financial reset, whether it’s the tech bubble, the financial crash, there’s you can’t stop a train like that. You can cut rates to try and slow it down, throw some stuff at it. But overall, when the when the economies turn and have a change of attitude and start moving their money where they want to. I don’t think the Fed or the president can, you know, stop a tsunami when it happens. Okay,
James Connor 14:07
so, lot of good points here. Why don’t we take a look at the interest rate chart or the bond chart, whatever you prefer, and just to give in, give our viewers an idea of what you’re seeing. And and you said you see the 10 year going up to 8%
Chris Vermeulen 14:22
Yeah. I mean, it would be one hell of a move. Oh yeah, it would. It would be pretty, pretty gnarly for a lot of people, good or bad. So if we, if we take a look at it, I’ll just, I’ll just zoom out here on the chart. So here we’ve got the 10 year note going down. And recently we’ve, we’ve gone from a 40 year falling interest rate environment to now we are starting a new upward environment. If we were to just use Fibonacci extensions on this to gage where this momentum can go. I mean, we would take this low, we would take this high and this low. This tells us the momentum that this market has, and if we were to squish this. Down to see where that upside move is. It’s somewhere up to that eight, 8% mark that is a huge move to the upside, meaning this could continue to take off. And I mean, the markets can do what we don’t we don’t want them to do, and what we don’t think they’re going to do. In fact, the markets generally do what most of us think it’s not going to do. And I don’t think people are expecting this. I hope it doesn’t happen. But I mean, that’s this is where the chart is pointing to, which is not a good thing. This is going to, you know, create a lot of pain for a lot of investors. Even savvy investors, are going to struggle to probably navigate and try not to have too much damage from great skyrocketing and assets falling. It really is going to be come down to a liquidation thing, cash out. And potentially this could be a very good thing for gold. People want to get out of the banks, because they don’t trust them, out of real estate, out of stocks. They’re, you know, they’re going to be like, give me physical bars of gold and get me out of the financial system. That is really broken. I mean, who tried? No one really trusts it. Banks go bankrupt. It’s scary, so
James Connor 16:06
and, yeah, I should also add too, I had a discussion recently with an economist, and she said the Fed has lost control of the long end of the curve. That’s exactly what you’re talking about. I know you’re not a macro guy, but she thinks the this is what we’re seeing, and this is why we have rates at 470 or 480 and she thinks they’re going to continue to go higher. And the Fed can’t do anything, nor can the federal government. They’re they’re really boxed in here. So we could see all Hill break out here in the coming months if these rates keep climbing.
Unknown Speaker 16:37
Yeah, for sure.
James Connor 16:42
Okay, so why don’t we look at the US dollar? Because this is also impacted by what’s happening with the with interest rates. The US dollar has been extremely strong, as you and I both know we are located in Toronto or Canada, and see the Canadian dollars, I believe it’s at a 22 year low. Was down 10% last year alone. So what do you see the d x y doing?
Chris Vermeulen 17:04
Yeah. So this is the the monthly chart of d x y. I think, I think the key for a lot of people to understand, I mean, it’s still the reserve currency. When all hell breaks loose around the world, people naturally gravitate to the dollar. We saw the dollar skyrocket during the stage four financial crash that we had, the tech bubble, we saw the US dollar percentage wise, was another huge rally during 2008 financial crisis. Whenever there’s some strong weakness in the economy like we had, I believe the stock market was very close to actually topping in 2015 2016 and Trump ended up stepping in as the president, and sparked a big move to the upside when it comes to that so it kind of saved things, but overall, we’ve gone from the dollar moving down, it’s put in a major bottom here, and now we’ve got a series of higher lows, a series of higher highs, and I think we’re Going to see the dollar continue to push up to about 121, potentially even go a whole lot higher, and it’s going to continue to act now. It’s not going to be a straight line. I do believe there’s going to be all kinds of pauses, and it’ll it’ll take its time to get up there, but as things fall apart, I think the dollar is going to shoot up into kind of crisis, kind of scenario once that’s done, I do believe we’ll go into a huge crash again, like we saw over here. And once it does top out, that’s when I think precious metals and miners are going to, like, absolutely go ballistic. So until then, this rising dollar environment is going to hurt the market. And as you were just saying there, James, when we look at the different currencies here, the US dollar is the only one going up. The rest are in free fall mode. The Canadian Dollar just bouncing bottom. Probably going to go even lower when oil breaks down, which, I think it’s just a matter of time, the Canadian dollar is going to fall dramatically again. And we’re kind of tied to the.to oil to some regard. And when we look at the the US Canadian dollar conversion, like, one US dollar right now is about a buck 43 I believe, based on Fibonacci in the chart pattern here, that we’re going to about 174 which will be ludicrous. Like, I think we’re gonna see some pretty huge changes in everything. I think we’re gonna, two years from now, we’re gonna look at the world and be like, holy cow, have things ever changed? So that’s kind of my scenario for the dollar. Is bullish dollar, and more or less you want to hold us dollars or own the US Dollar Index. And at some point, when it does top out, it’ll be like, get out of the dollar and probably Move into a resource heavy currency, which I believe the Canadian dollar will probably rise from the ashes and actually become a very move everything back in the Canadian dollars to catch the strength there.
James Connor 19:49
Okay, so you touched on oil, and oil has also been very strong here in the last couple of weeks. I’m not totally sure why, but it was hanging around that $70 level for many. Months, and then it’s just kind of caught a bit here in the last few weeks. What? When you look at that oil chart, what’s it telling you? Yeah,
Chris Vermeulen 20:07
so the oil chart, in the grand scheme of things, it’s, to me, it’s still fairly bearish. I mean, it’s been bouncing bottom along the support level around 65 or so for a while. It really does have a series of lower highs. I think there was some news that created a little bit of a pop and squeeze here. I think a lot of people were short oil, and the markets love to try and get the shorts out. Everybody was expecting a breakdown. I was hoping for a breakdown, but instead, the market’s kind of hooking up. It’s got some news in the space making it pop. So I think we’re seeing a lot of short covering. I do think this is going to get sold into I think eventually we’re going to see oil have a big drop and move down into the mid 50s, but I eventually think we’re going to go right back down to about 45 bucks a barrel, potentially this year. I would, I would, I almost think actually it’ll happen at some point this year, which is going to hurt energy stocks fairly dramatically, and hurt the dividend space as well. People who are heavy in dividend stocks are going to get hurt. All this kind of ties into the big, big companies that pay dividends are going to really start slashing dividends and cause a problem. And need the energy sector space. When we look at energy stocks, they’re going the exact opposite. And this is not good. This is we’ve got a bullish move in energy stocks. People expecting high oil because of war and uncertainty, yet oil has been going down and has got and is bouncing along supported. When oil breaks down below 65 I think we’re going to see the energy stocks just absolutely crash and get hit very, very hard and wipe out a lot of lot of people’s portfolios and the dividend space, because a lot of energy stocks pay big dividends, but once oil drops, they’re not making money, they start slashing dividends. They cut dividends or stop them. And that creates an onslaught of of these stocks to crash even more because there’s specific funds and institutions that hold a lot of these stocks, but if their dividend yields are going down, they have to sell them. If they stop paying a dividend, they have to sell the stocks out of the funds, and it creates massive selling pressure. And I remember this in 2008 I watched energy stocks crash, and I actually bought into an energy fund after it sold off about 70% and it was paying 16% dividend. I bought it at such a cheap price. So there’s huge opportunity, I think, to the downside, to bet on falling energy prices and then eventually to get back into them when they rise from the ashes. Again. These are big cycles coming together, huge moves.
James Connor 22:42
I was surprised when you were when you showed that oil chart, that oil got up to 125 bucks. I forgot about that back in 22 I guess that’s when Russia invaded Ukraine. It was, I’m glad it’s down at 80 bucks or lower. How high did it get there?
Chris Vermeulen 22:59
Yeah, went all the way up to about Buck 30. Wow. 20. 2200
James Connor 23:05
doesn’t go back there. Yeah. Okay, so you touched on utility stocks. Why don’t we take a look at a couple of utility stocks? Because they’re big dividend payers also, yeah.
Chris Vermeulen 23:15
So if we take a look at dividend stocks, they’ve been hit very hard. They have got what is kind of known as a broadening formation, a megaphone pattern, which is generally bearish. It means, what this means is, usually volatility is getting bigger. It’s having bigger down swings and upswings. It’s unstable. The recent sell off here in utilities has been pretty dramatic. We’ve, we’re, you know, it’s down about 10% or so. It has this bearish drop, which is a move down, a little bit of a pause, showing that this could actually have another big leg to the downside. And one of the biggest things right now that I’m getting a lot of questions on and people are concerned about, is a lot of people are they hold dividend stocks. The majority of US investors are 45 plus, and they hold a lot of dividend stocks. And that’s because that’s the mentality. Everybody’s said, hey, buy the big yield, high dividend stocks. They are down huge. When we look at most people’s portfolios, you’re down like 11 nine to 11% or so, where the SP 500 isn’t down nearly as much. And so I think this has to do with energy. Stocks have had a big hit recently. They pay dividends. Utilities have the same chart pattern. So we’re seeing a lot of this big, institutional, big kind of passive, buy and hold investor portfolios starting to sell and starting to unload. Look at the volume on the dividend. ETF here, all the big spikes in volume are selling. So there are big, I think portfolios out there getting out of this space, because dividend stocks actually carry way more risk than most people think. Like, just check this out. This. This is kind of an eye opener for a lot of people. We go back to the COVID. Trash. And take a look all these people saying, Oh, I’ve got, you know, big blue chips and dividend stocks, their portfolio fell 47% the dividend space. These are supposed to be safe stocks. These are supposed to be low volatility, super stable. 47% if we go and we look at that same drop with the SP 500 where you hold the whole index, for that same drop, you didn’t lose nearly that much. If we take a look at the chart, somebody just holding the index itself, you were down 34% so you lost almost half of your portfolio value with dividends, and much less than that holding the index. So this is the biggest disconnect that people don’t realize is dividend stocks are like a ticking time bomb for retirees. Everybody owns the same stocks. When all the retirees start to panic, which is generally around the same time, they all dump their chairs, which are the same dividend stocks, and they drive them down even more. And it’s not worth riding losing. You know, this was just the COVID crash. I think we could lose 50, 60% in the in the indexes, dividend stocks could lose even more. It could be a bloodbath. But people don’t realize the dangers of all holding the same stocks when the fear kicks in. So anyways, dividend is definitely a place to be worried about, and even real estate like the REITs themselves, they’re they’re a big chunk of the dividend stocks. Take a look at the REITs ETF. It has a very similar chart pattern as the dividend. It’s a big sell off. It’s got a bear flag. REITs real estate do pay some pretty good interest dividend payments. That’s why people are there. But interest rates and mortgages are going up, or mortgage rates are going up, and it’s people are moving out of real estate. And when we look at the real estate space in general, it is not a very, very good sign for whoops, what’s going on here? We’ve got a little bit of a pop here, but I believe we’re going to see another huge reset and a sell off in in the real estate, space and real estate, you know, during the 2008 crash, I mean, it fell down like 75% so it is. There aren’t many safe places when all hell breaks loose, and the key is understanding how to take advantage of it, not just avoid it, but profit from this. Is chaos. Brings huge opportunity. It’s just knowing which asset class to rotate to. And it’s not about following the news or the Fed. None of that actually really means anything. It’s all about identifying the trends which direction, and, you know, then managing positions to follow those trends. So everybody gets caught up in the news, and it’s really just noise. It’s, it’s garbage in, garbage out. You’re never really going to make money on news. If you do, it’s you’ll lose it on the next trade. Trying to trade news, it’s pretty much how that seems to work. So follow the money, follow the trends and manage positions. That’s the key here. This whole
James Connor 27:54
work from home theme has had a big negative impact on the commercial real estate market. I heard recently JP Morgan has forced their 300,000 workers back to work. A lot of them were already back to work five days a week, but a lot of the back office staff were still working from home, so they have to come back to the office, starting in, I believe, March. But I read another interesting stat, and there was still, when you look at the 50 largest cities in the US, the vacancy rate is still over 20% highest ever. Okay, I think it was 20.4% so there is still a big issue with the commercial real estate market in the US.
Chris Vermeulen 28:32
It’s huge. I mean, it’s funny, because actually, I’m just putting a piece of property up for sale as well, getting out a self storage facility. It’s I didn’t I should have sold it a couple years ago, but it’s my dad and our last kind of Hurrah. We used to run a health business. We started together. We built it up, sold the business. This was one last little business. I’m like, let’s do one more. He’s getting older, and we built it up. And now it’s, it’s time to just kind of move on. And so I’m even getting rid of some of my real estate, just to light my load and just get
James Connor 29:01
cash heavy right at the storm,
Chris Vermeulen 29:04
yeah. So weather, Storm, there’ll be new opportunities later, take that capital, put it to work somewhere, and I can just put it in cash, in US dollars, and probably just watch it go up about 20% from here in terms of Canadian currency, and then exchange it back, and then have more money when everything’s, you know, 50 cents on the dollar.
James Connor 29:23
All right, so we have yet to look at gold. Why don’t you pull up the gold chart and tell me what you see there?
Chris Vermeulen 29:30
So gold’s doing the, you know, basic stair stepping pattern. We have series of rallies and pauses, typical bull flag patterns. It’s in a pause right now, a pennant formation, which is known as a consolidation. Usually after this, it wants to go higher. So there is potential for gold to have another push up. I think gold could actually squeeze up to about $3,050 potentially here Overall, though, in the grand scheme of things, gold is hidden. 100% measured move. This is based on two time frames on the monthly chart, one from 2002 all the way till 2000 in 11 high and 2015 low. The other one is a more recent low that created. So we’ve hit a target in gold, and we closed out our gold position, our GLD position, and now it’s kind of like the main big run is done, I think gold still has this kind of defensive safe haven play that if the markets start to sell off and get weaker here, I think gold will continue to push, maybe make nominal new highs, uh, go a little bit higher, but I’m not a huge fan of of gold in terms of upside potential, but it is still in an uptrend, and if anything, it is going to go higher from your test the highs around 2800 maybe push to 3050 which is still a decent move. So I like gold. It’s probably it’s a nice low volatility asset. So it’s not like Bitcoin, where you could lose 20% in a day or gain 20% a day. Gold is like that big, slow moving beast. You can put a bunch of money to work and wake up and you won’t be broke the next morning. I like gold for that reason, and chaos can bring stronger gold pricing in the near term. And
James Connor 31:13
it’s interesting to see gold maintain its bid even in the face of a strong US dollar.
Chris Vermeulen 31:21
Yeah. I mean, we have actually been seeing them for a while, moving up in sync together. And I think that, I think that is a huge red flag for the economy in the world. I mean, I think that’s saying doesn’t matter what the dollar is doing, people are still moving into gold. They’re getting out of the financial system. I mean, I It’s scary to think how weak the US and probably Canadian system, and probably most systems, really, the financial system is so brittle, like, banks don’t have any money. They’re all broke. Every country is broke. Something happens and all these banks blow up, and you can’t get money out. It’s It’s scary. And that’s, I think, one of the reasons why we’re seeing, you know, Bitcoin do well, it’s getting you out of the financial system. We’re seeing people go into physical gold as obviously a physical store of asset of value. I like gold simply because, if something really happens and war gets ugly and internet goes down or power goes out, you know, Bitcoin doesn’t do you any any good, whereas physical gold, if you’ve got little bars of gold and things like that, you can break up or silver rounds, you could still actually barter for something. So I love gold for that reason. Not to mention, once you start holding it and have some of it, it’s pretty addicting.
James Connor 32:29
So Chris, we can’t talk about gold without talking about digital gold. So why don’t you take a look at Bitcoin? Tell me what you see here.
Chris Vermeulen 32:37
All right, let’s take a look here. So So Bitcoins, it’s had a really nice run. What’s interesting, we haven’t touched on it, but this is I’ll show you in Bitcoin, and it’s the same for gold and same for the SP 500 So Bitcoin, using Fibonacci analysis, we can gage where these where the upside targets are for Bitcoin. And there was this beautiful bull flag pattern that took place. We ended up getting into a trade right over here. We had a hit our first target at 618, we hit our second target at 108, 700 which is where our second target was. It is. It has had its move. Gold has done the same thing gold, if you were to look at the zoom of the long term chart of gold, gold has done a bull flag pattern like this. And gold is now also hit its 100% measured move, and so has the SP 500 all is as of, like last month. So we have like three major asset classes, all kind of hitting major resistance. Now bitcoin is, is in a strong uptrend. This is this way. This pattern is it could still flag sideways and trade sideways are a bit lower for potentially a couple of months. It took 123456, or so months before it started to turn up last time. So I’m still bullish on Bitcoin, but I do think it’s the trade is done. We’re out of it. I think it might pull back and trade sideways. It’s considered kind of dead money, once we start to see it come back to life. Then we’ll look at it for the next target, the next upside move, which I believe the next target, based on this so far, is about 140 949,000 but again, we got to see where and how far this is going to pull back. So when we look at the daily chart of Bitcoin, that the shorter term, it really is just taking a breather. It’s, it’s pulling back. We’ve got big, high volume selling. It literally hit our target, and since then, has been pulling back with big selling. And it needs a breather. So again, I’m very similar scenario for Bitcoin as gold. I’m I’m neutral, because they both hit their targets to bullish. I think they could still become a favorable asset and move higher. From this kind of point,
James Connor 34:47
Bitcoin is basically a risk on trade or so if the NASDAQ is pulling back, Bitcoin is going to pull back. So I just want to clarify something you see a you said, the. That’s going to pull back to levels that we’re seeing right now. But you think it’s going to move up 5%
Chris Vermeulen 35:07
so you’re right. Bitcoin does have a positive relationship, correlation to risk on assets like the NASDAQ generally, if the stock market goes the NASDAQ goes up, Bitcoin wants to go up or and vice versa. They’ll go down together. We’ll have to see how Bitcoin moves. I do feel like it might work a little bit as a defensive play. If the stock market rallies, I think we’re gonna see Bitcoin rally. If the stock market flounders and struggles, Bitcoin may actually struggle and flounder, but gold might continue to go higher gold as a cleaner disconnect. I know gold better than I do crypto, so I don’t know what Bitcoin will do if, if the stock indexes fall, if they fall, Bitcoin will most likely get pulled down, but it has been acting as a defensive play, and has been performing much better than stocks. So it it it might hold its ground. So I don’t have a definitive answer where it’ll go. I think if the equities and money flows back into stocks and risk on Bitcoins are going to have another push up. But if stocks flounder, Bitcoin is probably going to struggle. I think the play will be gold or the dollar, as the two places to go that will go up in value. They’re not exciting. They’re slow moving. But sometimes you gotta money’s to be made in some of the more most boring assets.
James Connor 36:30
Chris, I want to take a look at a couple of stocks before we wrap it up. And why don’t we look at Nvidia, that is been a beast in 2024 it’s run into a little bit of trouble here. But how does it look? Yeah,
Chris Vermeulen 36:44
it has very much so of a kind of a topping candle. So when something gaps dramatically higher and then sells off, it’s you can see it as like a topping candle, a reversal candle usually points to lower pricing right after we saw the same over here, and then the market took months to unfold. We saw the same over here. The market took months to unfold. So I do definitely think it’s, it’s struggling. I mean, it gapped right above to new all time highs and sold off. So that is a big red flag. There’s some big distribution selling going on. So I think, I think the space is getting, you know, a little tired in terms of the overall play. It had a massive run in the, really, the past two years, but overall, this is these big pops and then sharp pullbacks are kind of signature that volatility is increasing. Typically, as volatility increases, it means there’s a big trend change coming when, I don’t know, but I think we’re pretty darn close to eventually some crack and some break to the downside, and Nvidia will probably lead the way down, because really it’s led the way up, and it’s kind of underperforming now, which means it’s lost its leadership, and all the people who moved into it are a lot of aggressive traders who follow their emotions and FOMO, and as soon as they start losing money, they’re going to start selling, and it’s just going to create a landslide of just panic selling. What goes up on hype will come down, you know, on crazy fear, just as quick, or generally, a heck of a lot quicker. Markets fall four to seven times faster than they go up, which is why, you know, people see so much pain. You see a seven year bull market, and then in one year a bear market wipes it all out. That’s the reality of it happens on pretty much any asset. Things fall about seven times faster. So that’s why you have to protect your capital from from these drops, because by the time you catch up to it in like a portfolio or a quarterly report, you know, you’ve already lost most of your your gains over the past several years. And you got to be on the ball if you want to protect your your your wealth, more or less.
James Connor 38:47
So let’s take a look at Tesla. It had a massive q4 I believe it was up 80% in the last couple of months of the year. But it came under a little bit of pressure. They came up with some lower than expected auto sales.
Chris Vermeulen 39:05
Yeah, it’s, it’s struggled. I think it’s, it’s had the Trump kind of tailwind to it. Definitely, as soon as Trump got in, we saw big pop. This is one thing I’ve been kicking myself. We ended up doing the Bitcoin trade, and I was at the whole time. I was saying, Elon’s got it made. Tesla’s got it made. They got, like, the president behind them, their best buds. And I don’t know why I didn’t buy Tesla, because in my head, I’m like, this thing’s going to the moon. I generally don’t trade individual stocks, which is the, probably the reason it just naturally blocked out. I’m an ETF trader. But anyways, it’s had a very nice run. It’s, it feels like it’s terms of news, it feels like they’re losing momentum. Same with Apple. You know, you start to hear all these stats are losing and more market share, more market share. China, for the EV Spaces has come in, is doing some damage. But in the grand scheme of things, Bitcoin chart is still very, very strong. It’s been ripping to the upside. If we take a look at this move, it is still technically showing you know, another move up to six, 650 potentially, which from where it is right now is another like 60% move. So we have to see how this plays out, obviously, but the chart is still strong. This is a pullback after that big of a rally, as you just said, James, you do need a pullback, a significant pullback, to kind of cleanse the market before it’s going to start to run higher. So we’ll have to see. I do think we’re going to be eventually. We’re going to get a bad piece of economic data, and I think it’s going to change people’s mindsets very quickly. But overall, yeah, Tesla, the chart is strong. The news feels weak about it bearish, but you got to follow the price. You got to follow the money. Because that’s that’s the only way we make money as investors, is trade with the trend. Don’t trade on news or gut feelings.
James Connor 40:52
So we can’t look at Tesla without looking at Trump media. Let’s pull that up and see what your thoughts are.
Chris Vermeulen 41:02
Obviously all over the place. Huge volume. Obviously through election phase, it’s had a big pop in the last couple days. I don’t really follow this. I just see how far back it goes here. I think it’s one ugly chart. I think it’s kind of to me that I don’t like to trade stuff like this, that moves like that. It’s all these sharp pops and fades. To me, it’s kind of like, like Penny stocks with pumps, pump and dumps. It’s like, you get a piece of news, somebody makes a tweet, and the thing pops, and then it just fades and sells back off. So to me, this type of, this type of stock in general, is just dangerous. It’s a it’s a manipulated type of chart driven by news and hype and headlines, which I absolutely hate, because first, you never know when it’s going to happen. Second, while you don’t help, people are going to react to it. And then third, the price moves so fast in both directions, it just carries a ton of risk. So it does have a launchpad, meaning it’s had some strong moves to the upside. It looks like it wants to continue to go higher, but again, it carries a ton of risk, and people who trade this type of stuff generally net out losing money in the end. It’s you have a couple big wins, but you give it all away on the next few trades trying to do the next ones like this. So that’s a dangerous type of chart to mess with. Chris
James Connor 42:23
as we wrap up, why don’t you just communicate to our viewers where you see the market going in the next three to six months?
Chris Vermeulen 42:30
Sure, so if we take a look at the the SP 500 I think in the next three to six months, let’s just zoom out here a little bit. I think in the next three to six months, I feel like the market may have one more little push up. I say little like five to 10% potentially. But then I do feel it. I feel like it’s topping, and I do think we’re going to be having a fairly significant pullback. I think we’re going to come down to this is the spy ETF. So based on where the price is right today, I think we could see like a seven 8% pullback over the next several months. It could get a little bit uglier than that, but that’s kind of where I think we could go. It’s going to be right through this pivot high and this big oscillation, this pivot low. It’s going to try and find some support there. I think it could go a whole lot lower, but we just need to wait. The trend is still up, so I hate to I’m always a perma bear. Everybody’s like, oh, you’re a perma bear. I say that, but we are long the markets in terms of investment standpoint. And if the market starts to turn back up, potentially in the next week or so, we will be long again, and we will ride it up, because we’re not going to let the markets start a new uptrend without us on board. So I think we’re going to see things roll over. I think we’re going to see some economic data probably start to slow down, and I think people should be very nervous what’s going on again. The big picture here is the momentum, and things are slowing and stalling out, just like over here. And this is kind of the type of price pattern I think we’re going to see are, is, you know, this five to 10% pullback over the next three to six months, and then from there, you know, you know, create some level of support, which eventually, I think will eventually resolve to the downside, and we’ll see a much bigger move. So when we look at the grand scheme of things in terms of of risk in the market, this, this chart right here, shows it very well. This is kind of just the overall cycle of the market, and we are at this red zone, I think, for almost all asset classes, peak financial risk, whatever you put to work right now, I think has got a ton of downside risk and there’s very little upside. And knowing that, I mean, I was, I go to Las Vegas, I meet with a bunch of big investors, and we all have the same scenario. It’s like there’s not much to put our money at to work that can make a lot of gains. Everything carries a ton more. Risk than normal right now, and that’s what we just need to be be aware of. So it’s more so capital preservation in this type of market. Try to make some gains, but don’t be swinging for the fences, because it’s going to hurt if you are on the wrong side. Well,
James Connor 45:15
Chris, that was a great overview, and I want to thank you for spending time with us today. If someone would like to learn more about you and your services. Where can
Chris Vermeulen 45:22
they go? Yeah, they can go to my website, which is the technical traders.com or they can visit my YouTube channel, the technical traders. I share videos kind of like what we’re doing now, but on a much more closed up, refined scale, and post stuff regularly there. And I share my trades at my website, so you can copy the ETF trades that I do, and we just rotate from asset to asset and take advantage of whether stocks are going up, down or sideways.
James Connor 45:48
Chris, once again, thank you. Thanks, James. Take care. As Chris mentioned, there is a lot going on in the world right now, and you better buckle up, because things are going to get very volatile in the coming months. If you need help making sense of it all, and if you would like to have a discussion with a vetted financial advisor, go to wealthion.com/free once again, That’s wealthion.com/free and wealthion will put you in touch with the right person to discuss your financial future. Thank you very much for being with us today, and I look forward to seeing you again soon.
