Institutions are quietly unloading billions in stocks, signaling a potential market reset or recession ahead, warns Chris Vermeulen to host James Connor. In addition to his macro insights, Chris, the Founder and CIO of The Technical Traders, provides a chart trading analysis extravaganza of key investment sectors and equities like the S&P 500, NASDAQ, Nvidia, Gold, and many more that you can’t afford to miss!
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Chris Vermeulen 0:00
There’s some big institutions lightening their portfolios, dumping billions of dollars into the market, but they’re doing it in a controlled way. The market drips a little higher to resistance. They they unload, you know, few 100 million or a billion dollars worth, drive the market back down. Then they stop selling. They let the market repeat that. And we saw that all last week. So these are early warning signs that these huge institutions are starting to lighten their portfolios, reduce exposure, and they take months to unload portfolios. So all it is is an early warning sign, along with other things, gold and silver and miners are telling us that, you know, I think we’re very close to some type of black swan event, to a recession, to a big stock market reset. Obviously, oil taking off, all these things we’ll touch on are leading to, I think, a bigger bearish picture for the economy and the equities markets.
James Connor 0:53
Hi and welcome to wealthion. I’m James Connor. Well, here we are in the last quarter of the year, and there’s so much happening in the world. The financial markets are showing no signs of weakness. The S P is making new highs every other day. Every central bank throughout the world is cutting interest rates with the hopes of stimulating economic growth. So do we just keep riding this wave until it breaks? Or should we take a more defensive stance to help answer this question? My guest today is Chris Vermeulen, of the technical traders Chris, thank you very much for joining us today. The last time we spoke, it was early August when global markets got hit. The S P was at 5100 now it’s at 5700 and at that time, you were a little bit concerned and thought the market was topping out. But here we are, two months later, in the market’s much higher. And as I mentioned this s, p, continues to make new highs every other day. And we recently saw a very strong non farms number last week. And before we start looking at the charts, maybe you can just give us your view of the big macro picture.
Chris Vermeulen 1:56
Sure. Yeah. Well, thanks for having me, James, overall, like when I look at the big macro picture, kind of the overall view of what’s going on. I believe we are getting closer and closer to a major market reset. But as you just stated, the market is still in a very strong uptrend. In fact, that August shakeout that you and I talked about and we’re experiencing in our last talk, and the volatility that we’ve seen has really kind of cleansed the market. When the market has a sharp pullback and a pause a couple month pause, like we’ve just seen across the board, it re energizes the market that could have another push higher. So I do think overall equities have another three to 8% upside on the SP 500 or the NASDAQ, if this traction continues to follow suit. But in the big picture, I do feel like things are starting to slow. I think we’re seeing, you know, unemployment slowly creeping up, although it did dip a little bit last week, but we’re seeing delinquencies on credit cards. Cards are maxed out, and they’re they’re going delinquent. I think it’s one of the largest times ever we’ve seen maxed out credit cards that are delinquent. A lot of people will just have small, small amounts of debt and just not want to pay it. But cards are maxed out. We’ve got residential, commercial real estate. Mortgages are starting to default and take off. We’ve got a lot of defaults starting to happen, actually, in the multi family, which is like, not a good sign at all, because that’s the most affordable to build, has the most potential. So there’s a lot of stuff behind the scenes unfolding telling us that, you know, people are running out of money. People aren’t finishing projects. Everything’s costing more. And we’re seeing like leisure and activities, as we’ve seen, some of the biggest cuts in that area. People just aren’t spending the same amount of money as they used to travel. You know, all kinds of discretionary products are coming to a grinding halt, and we’ve seen the biggest layoffs in that space. So when people start closing their wallets and tightening up, it’s going to take a few months, a quarter or so, but it’ll ripple through. And we’re seeing, you know, cut in manufacturing, which manufacturing is like, three or four month lead time. They’re not getting the orders from the stores, so they’re laying off employees. So there’s a lot of stuff coming down that by the end of this year, I think we could be like, you know, getting very, very weak in terms of recession being a lot clearer down the road. So that’ll that’ll tip the scales and make people even more nervous. And it’s kind of a self fulfilling prophecy. I think we’ll see equities and things sell off and go from there. So I’m short term bullish, but longer term, I see the music coming to an end.
James Connor 4:28
Okay, so why don’t we start looking at charts, and why don’t we take a look at the S, P to begin with. It’s up 20% on the year, and it’s currently trading around 5700 you think there’s another three to 4% upside? Yeah, I think there’s, there’s
Chris Vermeulen 4:41
still some pretty good upside. I like to use Fibonacci extension as a technical trader, which gages how much momentum there is. And this big correction that we saw back July, August, if we use a Fibonacci extension, which I find is the most accurate tool to project upside targets, I only use. Measurements on this I use a 618, so meaning this rally and this pullback. If the market rallies 61% of this first leg here and takes a pause, which it has, we almost always go up and hit this 100% measured move. So there’s about 4% upside here on the SP, 500 to the upside. The NASDAQ has about an 8% upside potential based on its chart pattern. But is this whole consolidation right through here, where the VIX spiked like 175% we saw all kinds of fear. When the market has one of these fear driven events, it cleanses the market. Anybody who’s who’s going to get shaken out, got shaken out. That’s what all of these are. This one isn’t quite as severe, but it led to the next major leg up. And of course, this is another one of these little pauses. The smaller they are, the smaller the potential upside. But when we have one of these big ones, it can push the markets to have a pretty big move. But we’re definitely seeing some warning signs. All last week, we saw distribution selling on the indexes, meaning every time the market drifted higher on light volume, we’d see heavy volume step in and hammer the price. There’s some big institutions lightening their portfolios, dumping billions of dollars into the market, but they’re doing it in a controlled way. The market drifts a little higher to resistance. They They unload, you know, few 100 million or a billion dollars worth, drive the market back down. Then they stop selling. They let the market repeat that. And we saw that all last week. So these are early warning signs that these huge institutions are starting to lighten their portfolios, reduce exposure, and they take months to unload portfolios. So all it is is an early warning sign, along with other things, gold and silver and miners are telling us that, you know, I think we’re very close to some type of black swan event, to a recession, to a big stock market reset. Obviously, oil taking off, all these things we’ll touch on are leading to, I think, a bigger bearish picture for the economy and the equities markets.
James Connor 7:00
Yeah. Well, to your point, it’s going to be interesting to see we’re going to start seeing q3 numbers coming out here in earnest in the next couple of weeks. The big, first big one is JP Morgan at the end of this week. And it’s going to be interesting to see the narrative coming out of these companies, just in terms of the consumer and the health of the consumer. So just to recap, here, your short term target on the S P would be 6000
Chris Vermeulen 7:24
by the end of the year. Yeah, roughly about 6000 Yep.
James Connor 7:27
And why don’t we move over to the NASDAQ now? And let’s get your thoughts on that. It’s also up 20% on the year, but it’s not making new hives like the S P is,
Chris Vermeulen 7:38
yeah. So it’s struggling a little bit more. Obviously, everybody, the masses, always pile into the big, Magnificent Seven, whatever is in the news and moving. For some reason, the masses all want to own it. And so when the market starts to correct, they’re all they all dump the same stock. So the NASDAQ really got hit. And people are nervous. We saw like a 20 plus percent drop in the markets and Nvidia. But we have seen, you know, a rally. We had a pullback, and now we’re playing around this 618, level, and it’s got about enough to go up to about 21,000 or pretty much a double top for the NAT, for the NASDAQ going forward. So there is still upside potential, but definitely had, there’s been some damage done, people who are involved in the Magnificent Seven really went for a roller coaster ride, and now they’re a little gun shy, and that’s why we’re not seeing it go high, making new highs like the SP 500 it’s just people are nervous and they’re worried that it’s going to be another collapse. So this is not a good sign. We want to see the tech leading the way, because where tech goes is pretty much going to drag the rest of the market with it, but it’s not quite as strong as the overall broad market here. So
James Connor 8:44
you mentioned Nvidia, we got to take a look at this. This is the poster child now for the NASDAQ. It’s up 150% on the year, not too far off its all time highs. It’s had a massive recovery from that low we saw back in August.
Chris Vermeulen 8:59
Yeah. I mean, I still like Nvidia. I mean, it had that huge pullback. I mean, that’s enough to shake most investors out, and lots of panic and 30, almost 35% pullback. But overall it is, it is a very strong pattern. I mean, this is how the market moves. It trades sideways. It has a rally, it has a pullback. It usually has some type of shakeout, where investors finally give up. And then, of course, once they bail out because they think it’s breaking down, it shoots up for the next leg, and it’s creating another one of these big pauses. And this definitely shook people out right into this area. Now it’s trying to build a base, and we could see Nvidia continue to go higher. I mean, the CEO’s saying there’s insane demand, I think is specifically what he said for their product. And of course, if, if that’s the case, Nvidia is going to be going higher. And where Nvidia goes, pretty much the whole market goes, or at least the large major indexes are going to get dragged up with it. So while it’s, you know, it’s not making new highs, it’s definitely building a launch pad, and it. Looks like this week. This week, it could really start to break and run higher. I think the overall equities market wants to break and run higher this week, it looks kind of primed and ready. And actually, if we were to just kind of take a look at the spy or the SP 500 index over the last few sessions, here, this, this indicator, right here is our short term 30 minute chart, and it tells us when the stock market is dipping into an oversold territory. It’s usually when we see these lows. That’s usually when bargain hunters step in and the market will start another leg higher. So the fact that we’ve got these lime green bars, and it found support at this 20 day moving average, this is a very, very bullish sign. This market is primed and ready for that pop. And Nvidia has a very similar vibe. Nvidia’s ready to pop as as well in terms of the price action. And hopefully we’ll see Nvidia really scream higher here and break out. Which will which will lead things up. You can see if we zoom in on the chart, it just dipped into an oversold territory a few sessions ago, and now it’s screaming to the upside. So these lime green are kind of like little market resets. People panicked out and they bail out. The shares become short term oversold for a momentum trader, and then you usually see the market pop and rip the other way once it’s spooked out short term traders and investors, yeah,
James Connor 11:22
and I’m sure there’s people trying to short this thing every day, and yeah, they’re just going to get sucked in. And this thing looks like it just wants to rip. So we have to take a look at China now, because we had massive news out of China a couple of weeks ago. And every one of those markets, the the Shanghai, the Hong Kong and, yeah, the CS, 300 they, they’re all up like 20% here in a very short period of time. What’s your take here? Do these markets keep going higher? Yeah.
Chris Vermeulen 11:52
I mean, I don’t follow it too closely, but I’m never a huge fan of something that screams higher on massive volume based on on news. I mean, obviously there’s stimulus, but if we go and we look at the monthly chart, it’s always really good to take like that 35,000 foot view, if we just kind of draw a line across here, you know, we’ve got pivot highs, we’ve got pivot lows. We’ve got a lot of price through here, a lot of highs and lows. Tagging this horizontal blue line, there’s a ton of volume that’s traded through here since 2008 and really it’s popping back up, and it’s going to be running right into this, what I would call a ceiling a resistance zone. So I think most of the upside is done. We’ll we’ll see this is, to me, this is chasing a trade. It’s a news driven move. I’m not a huge fan of trying to chase bubbles like this and because they can reverse just as quick as they happen. But I would say, hey, most of the move is done. It’s running into resistance. It’s probably going to start to stall out here. But definitely, we’ve seen life. I mean, when when you look at it like China, is like the ultimate in stimulus. It makes like the US look like nothing. China just does all kinds of stuff to instantly fix major scenarios where, in the States, it’s a slow dribble, and they’re trying not to upset everybody, but they support things. But China, just like puts their foot on the gas pedal and does things that dramatically turns things or tries to turn things around. They’ve got a lot of issues over there, but I would say Chinese stocks have had their fast, easy run if you didn’t catch it, which would have almost been a fluke, because it happened just on news, and you can never predict when news is coming out. I would say most of that upside is done at this point, and the Chinese market starts to roll over here, or trade sideways. Then it might, it might slow down the overall equities market in general as well, because this is definitely muscling up some some pretty big stocks and some heavy weightings. I
James Connor 13:49
don’t know if you saw that interview with David Tepper from apolosa, but he was on CNBC, I believe, last week, and he’s all in on China, and he’s pretty positive on the markets overall. And he thinks these two economies, the US and China, together, they represent 45% of the global GDP. And he thinks this is just going to propel things higher. So you’re, it sounds like you have a little bit of concern about China. Yeah.
Chris Vermeulen 14:14
I mean, if you, if you, I did this with a bunch of investors last week in a mentoring session, so we pull up all the major indexes, Japan and Germany and all kinds of different indexes. We all laid them together. We looked at the monthly chart. And when the US economy goes into a recession, all other indexes go down. When they rally, they all rally together. I believe we’re coming into a major market top I think this stimulus plan is trying to kick start things in China. But overall, they pretty much all collapse and go into into bear markets together. So I’m not one to try and pick the one horse that might go the opposite direction as the rest of the market. I’d much rather just be like, hey, if the whole economy, global economy, is slowly, slowing and weakening, a pop like this is is very temporarily. I think it’ll eventually just get sold into. Again, it’s a stimulus plan. It’s manipulation, manipulation and news driven moves are usually shaken out and reevaluated after the momentum is done. A lot of people follow China and huge these big stimulus plans definitely move things. But I believe we’re coming into more so over a recession, a global recession, and this is just roll over and fizzle out as we work up to this 38 level, which is that major blue line across that chart. So I’m not really that bullish on it. I mean, the markets are still in an uptrend. We are long equities here. But if you were to look forward a year from now, I believe everything’s going to be trading substantially lower.
James Connor 15:41
Okay, so one of the things that’s driving these global markets are interest rates, and every major central bank of the world has been cutting, with the exception of Japan. So why don’t we take a look at the TLT? That’s a good measure of what’s happening with interest rates and in the US, the 10 year has just gone from 360 up to 4% now a big, a big part of this move has just come on the back of these strong jobless numbers we saw to the US. But what do you see here when you look at the TLT?
Chris Vermeulen 16:10
Yeah, I mean, there’s, there’s a definitely huge move taking place in TLT, like, obviously we’ve seen a huge, massive correction in bonds with a huge rise in interest rates. But I believe the equities market, more or less, is starting to put in a major top and will eventually sell off. And usually when one asset class falls out of favor, a new one will rise, kind of from the ashes. And so I believe the type of price action we have on TLT is indicative of a bottom. All of this stuff, to me is, you know, a year from now, I think we’re going to be substantially higher overall. If we go into a recession and things get weak, the Fed’s going to probably continue to cut rates, and I guess there’s going to be inflation that’s going to be the wild card of how much do they cut. But overall, usually we see the stock market sell off, and then we’ll see the Fed step in trying to stimulate and start to drop rates. And of course, that will send bonds higher. So I think there’s some pretty good upside potential, maybe 15, 20% in TLT to the upside over the next year or so. Obviously it won’t go in a straight line, but I believe, I believe we’re going to see bonds become that defensive play. We’re actually seeing this more now, just in the last couple of months, finally, bonds have gone back to how they moved the previous 40 years, which is, stock market goes up, bonds kind of go down a bit. If stocks fall, then bonds tend to move up. So starting to get back to the way everybody’s kind of used to how they move. Obviously, the last three, four years haven’t been quite that way, but I think we’ve turned that corner. We’re back into somewhat of the norm. So I like bonds. I do. I do like bonds. I The price of bonds, because I think rates will slowly drift sideways and lower, which means bonds will probably slowly rise and eventually rally.
James Connor 18:05
So as you mentioned, one of the big unknowns is inflation, and one of the things that’s really been helping us here in the past year is the price of oil, and it’s been kind of hovering in between the 70 $80 a barrel and but recently with the hostilities in the Middle East, it has caught a bit of a bid. But what’s your take on oil here?
Chris Vermeulen 18:26
Yeah, I mean, I’m, I’m bearish on oil. To me, the chart pattern is, you know, we’ve got a sell off and we’ve got a pause. And usually this pause, or this pennant formation, is usually known as a halfway point, and so whatever this first leg down was measures where, you know, the next one should go. So I believe we’re going to probably see like 40, $45 per barrel at some point, which a lot of people say there’s no way. But in reality, we’ve hit this $40 per barrel a ton of times, going going back over the last, you know, 1015, years or so, it’s not that significant. In fact, we went negative. So, I mean, you can’t really argue anything anymore in terms of where price could go. So I do think that is probably going to be the case. Now, obviously we have the wild card, the black swan of, you know, the Middle East. You know, World War Three going on, and bombs start flying, then all bets are off. Oil will probably skyrocket. Gold will probably want to move higher as well. Typically, those two go up in sync during a massive war. So other than that, I do think most things are stalling out and weak. And I’m bearish on oil unless there is, you know, unless bombs start flying around and oil refineries start getting hit, that’ll probably completely make oil take off.
James Connor 19:48
It’s amazing, with everything that’s going on in the world, that oil is hanging in where it is. And you gotta wonder, if we didn’t have these hostilities, and we didn’t have the war in Ukraine, oil would probably be at Four. Or 50 bucks,
Chris Vermeulen 20:00
yeah. And I think, though, I think the world has really changed a lot. I remember back in the Gulf War and all that stuff going on, it was such a different time. Now, I mean, when we hear war, we’re all I’m picturing are all those tracers across the skies and jets and bombs going off. I mean that to me is like, that’s obviously what I picture in my head as war. Now it’s just like a digital and, like, you know, a digital war of zeros and ones and, you know, interviews and people bashing each other and people trading, trade swapping trade policies. Who can buy this who can’t buy that. So it’s really, really different. I think, I think if we saw explosions in a big way, in terms of refineries on fire and all that stuff. It would probably dramatically change oil. But I think, you know, war right now is so it’s very different. I think, I mean, I’m not in that space. I don’t know it, but it’s just not the same as what we picture back in, you know, back a long time ago, and there’s, like, really, guns going off and missiles going off. So if those start to fly, I think oil will do what we’re expecting. But I think people don’t realize maybe how bad things are, because it’s all just information, and we hear news all the time, so we’re all kind of, like, pretty numb to like, Oh, there’s another more tension in the Middle East. And I mean, we have, we’ve heard that forever, so it doesn’t really spark huge fear, in my opinion,
James Connor 21:20
yes. And the other big difference, too is the US is the world’s largest oil producer now. So right, yeah, it’s also having a big impact. And so why don’t we also take a look at Exxon, given that’s the largest oil company in the world, the largest publicly traded oil company, I can’t get over the strength of this thing. It’s a beast. Yeah,
Chris Vermeulen 21:42
I know it’s, I mean, it’s on fire. It’s doing really well. And this is one of those wolves warning signs when energy stocks are doing really well. I think Exxon Mobil, like, I think people are, are definitely into energy stocks. They’re doing very well. They’re trading up near, I mean, all time highs. There’s even the energy sector stocks. If we were to go back using this monthly chart as well, it’s up at levels that we’ve seen during major market tops or recession peaks. And a good view of that is, if we go back to the stage analysis of the markets, there’s these four stages of the markets. I believe we’re in this stage three, which means after this, we go into a major financial reset. But if we go down and look at the overall stock market cycles, which is this blue cycle? We tend to see gold, like precious metals, do very well. Which we are gold’s hitting new all time highs. Energy stocks tend to do exceptionally well. Which they’re hitting as Exxon Mobil’s new all time highs. The energy sector space is up near all time highs, and industrial capital goods, and all of these are early warning sign. I think, you know, precious metals, to me, like we’re gold’s moving up. I look at gold as, like the world is like a beehive, the whole planet. And so when everybody starts to buy gold, it’s the whole mentality of everybody saying, Okay, there’s bubbles everywhere, there’s uncertainty. People don’t trust stocks, they don’t trust currencies, and so they move to physical metals. That’s a huge red sign, red flag that I think something bad is coming. Energy is more like there’s some huge uncertainty in terms of war going on. So energy stocks are taking off anticipating, you know, oil skyrocketing because there’s all kinds of, you know, negative things starting to unfold. The capital in capital goods, all kinds of companies have had really good earnings. Manufacturers are upgrading their assembly lines, and they usually upgrade everything right after a strong business cycle, and then we go into a recession. So all those things are starting to show. And as you mentioned, ExxonMobil, the strength here is is amazing. This is a very strong chart pattern. It’s breaking out. It’s rallying up, and it’s got potential to want to keep on going. This is a very strong chart pattern, but eventually, when the stock market does start to top out, all of these will fall. Gold will fall, industrials, energy stocks, they’ll all get hammered and clobbered pretty good, but right now, they’re leading the way, and it’s actually a warning sign of the markets late stages of a bull market coming to an end. Okay,
James Connor 24:15
so you mentioned gold a couple of times. Why don’t we take a look at the gold chart here. It’s up 25% on the year, give or take, where do you see gold going?
Chris Vermeulen 24:24
Gold has pretty much made its run. So gold’s got these massive Super Cycle waves. And really, if we were to look at the last super cycle that started in early 2000s to the 2011 peak and down into this 2015 low, we can carry that forward. And this kind of goes back to one thing we talked about earlier, which is, you know, Fibonacci tells us how much momentum there is. So we had this first run up, and then we had the pullback. And based on this power, we can gage where it should run to next. And here is that, 618, level. And you hit 618, and usually take a pause. We almost always run up. It doesn’t matter the asset class. I find this works on absolutely everything. You’ll run up and you’ll hit that 100% one is 100% measured move. So this run up is equivalent to this run up. And so we’re pretty much there. And last time you and I talked James, I was saying, hey, if gold hits like 2700 or 2750 I think we are bloody close to a major market top because this is the 20 year chart pattern, or a more or less a 12 or 14 year chart pattern, pointing to where we should land here. And everything is unfolded exactly as we’ve been anticipating for the last several years. And now we’re at this level, and gold’s at all time highs, energy stocks at all time highs. You know, all kinds of chaos is happening, wars happening. And this, this big, strong rally that we’ve got in gold, is very similar to what happened. Let me just clear this chart. What happened just before 2008 financial crisis. We saw gold after had broken into a bull market phase. It it paused. Well, stock market rallied, and then everybody started to pile in the gold. There were bubbles everywhere. In 2007 stocks were overvalued, homes were overvalued, all kinds of global concerns. And then the stock market took a correction, and gold pulled back about 34% Well, we’ve had the same we had a new Super Cycle Start. We just had a multi year pause in gold. Well, stocks skyrocketed for the last several years, and they’re still going up. But now gold is is doing what it did in 2007 it’s outperforming. It’s caught up, outperformed the stock market, and this is telling us, the world knows something bad is coming, and we’re probably going to go into some type of sharp pullback and reset before we see things go go higher. I do think we’re going to see gold 35 5000 and change over the next several years, but I do think this whole move has played out. I don’t think there’s a lot of upside, much upside at all in the precious metal space, very little until it resets. And then, obviously the wildcard will be, if there’s like a full on war, then gold could squeeze up and really shoot parabolic even higher. But again, as soon as that fizzles out, we’re going to see gold pull back and probably have a 1520, or 30% pullback, and that would bring it right back down into this consolidation, which happens to be, percentage wise, the same as this one here. It pulled all the way back down to the multi year consolidation. So I’m really bullish on gold long term. This whole thing has played out as even you and I have talked about over the last several months, when we since we’ve been talking, and now I think we’re at the point where it’s like, okay, I’m stepping away. I’m not looking to really take advantage of precious metals at all anymore. Now I’m letting them going to cleanse themselves. There’ll be a new opportunity to the upside, I think, after we have the markets reset.
James Connor 27:52
So one of the big differences between what’s happening now in the gold sector and what happened back in the early 2000s was the move in the gold equities, and we’re really not seeing that now. And why don’t we take a look at Newmont uses as an example, back in the early 2000 the gold equities were trading at a big premium to their navs, and now there’s very few names that are trading at premiums to their navs. When you look at Newmont, for example, what do you see here?
Chris Vermeulen 28:21
Yeah, I mean, it’s a pretty ugly chart. I’m not a fan of something that’s, you know, really just oscillated in big, volatile ranges for the last, you know, 24 years overall. To me, it’s a pretty ugly chart. It obviously has had a this is the monthly chart. It’s had a very nice run. It is definitely stuck at resistance, if we just connect these from a technical standpoint, you know, usually you have a floor support level, but once you break it, it becomes resistance. We’ve just had a very strong move up to this level. And if I was to just draw a line right across here as well, you can see it’s significant highs, significant lows, a breakout, a high, a couple highs, a topping phase. So Newmont is running into resistance. And, you know, it’s, it’s definitely struggling. It actually, you can see on the on the monthly chart here, we zoom into this bar had a little bit of a run, and push up, and then it’s, it’s getting sold into so there’s sellers lurking up there. Again, not a whole lot of upside potential. Maybe it has a little bit of a squeeze up or something, a little shake out. But overall, I think, you know, the pressure smell space is not really going to be that exciting until we go into a financial reset and everything gets cleansed, and we’ll probably see gold stocks trading dramatically lower, back down the lower end of this range, probably down in the mid 20s or down in the 30 level for Newmont and and then from there, it could go into a huge run in rally. But I’m not a huge fan of this stock. I mean, obviously it’s huge in terms of the company itself, but percentage wise, it’s, it’s, I think there’s other places you could get into. Do It and trade without a lot of this chopping noise I do, like, you know, GDX, or any of the gold mine or ETF baskets, kind of as a whole, I find they’re a little bit cleaner when we look at the precious metal space. You know, they have formed a much cleaner pattern in terms of, they’ve put in, like, a rounding bottom here, a pretty major base through here, and they kind of broke through. Now they’re sitting on top finding this traction. I think there might be a little bit of upside, but overall, we need to wait for the stock market and everything to reset, and then I think we’re going to see these really take off going forward. So again, everything is kind of waiting. We’re in that wait and see mode. Long the stock indexes, the precious metal space, I think, is pretty much run its course for a little while. Let it reset, and then it’ll be like all hands on deck when that super cycle comes into play, very similar to 2000 2008 where we could see miners and everything really take off. And that’s kind of, this is what we’re waiting for. So this opportunity right here that a lot of us played, it’s a life changing move in a lot of gold mining stocks that’ll be like over here. I believe we’re getting closer. And this is the monthly chart, so this could still be six, 812, months out. But we’re actually getting very, very close to, I think, that type of scenario where we can get into the, you know, any type of precious metal miner at that point.
James Connor 31:26
So yeah, so this is a better example of what’s happening in the gold sector, as opposed to new month, because this is comprised of a back basket of stocks. But once again, physical Gold is trading at all time highs, but these gold equities are nowhere near, yeah,
Chris Vermeulen 31:42
they’re just not participating. There isn’t the light like they’ve had a nice run, but in the grand scheme of things like gold, gold is a trading equivalent to like up here and and miners are way off. They’re just it’s not the right time for them. And this is the problem with, you know, a lot of people will follow one specific sector or asset class, and then they wait, like, a decade for them to come back to life. This is the problem. There’s the windows where specific asset like this come to life is very short. It only lasts a few years. If you catch those few years, they’re life changing in terms of financial returns. But you need to, like, step away and let them reset and build and we’re just not at that phase yet, but we’re very close to them wanting to take take action, and we’ll start to see a lot of action, a lot of money, start moving in, you know? And that’ll be a big red, a big flag saying, hey, it’s starting to come to life, but we’re not quite there yet.
James Connor 32:38
All right, so we gold’s trading at all time highs, but silver is nowhere near let’s take a look at the silver chart and get your views on that.
Chris Vermeulen 32:46
Yeah, Silver’s got a really nice looking chart. It’s it’s been moving up. I’ve been expecting it to go to about 34 to 36 somewhere in this this area, bring it back up into these kind of highs over here. So silver very similar to the gold miners. I find gold miners and silver are kind of same mentality. It’s the same waves and fear. It had that kind of bottoming formation. You know, more or less it’s kind of created that launch pad, and it’s moving up now. It is a little bit. It’s a little higher than the miners, because I find it’s disconnected from the stock market. People are moving into silver, so there’s still some more upside this. This has got a nice little chart pattern. We still might see a squeeze up, but once it gets into this resistance zone, where we’ve got a significant lows, we’ve got a couple significant highs, three through three highs through here, this is going to act as a major resistance zone. So I do think we could still, still see silver and miners and gold have one more little squeeze and pop up. But I do feel like, after that, you know, we’re going to see some type of reset and pullback, but silver obviously moving up. I like, I like metals in this situation more than the miners, because they’re disconnected from the stock market. So if the stock market starts to sell off the precious metal space. They’re a physical asset. They’re outside of the equities market. They can actually keep moving up, and that’s what we’ve seen before, where gold continues to rally and moves higher dramatically, while gold miners actually trade sideways because the stock market goes down. And as everybody knows who follows me, I look at the stock market like the ocean tide. When the tide goes down, all boats go down, so you don’t and when the stock market goes down, all stocks go down. So you don’t want to hold gold miners, even though they’re in a favorable environment, there’s still a stock. They’re a boat on the water getting pulled down with the rest. You got to get out of the equities and then go to physical silver or gold. They’re the ones that can kind of drift and continue to move higher while their equities market is under pressure, and people don’t want to move to gold, because it’s like, you know, people who trade miners because they want the volatility. But the reality is, you actually can make more with a really conservative play, because it’ll naturally buck the trend and want to move higher. Well, miners are subject to selling pressures in the equities market, but. Data. That’s the problem. If you try and chase big returns all the time, believe it or not, some of the best returns are actually in the slower moving assets. But people just don’t see that. They want the volatility. They want to try and swing for the fences.
James Connor 35:14
Okay, Chris, I want to ask you about one more medal before we move on, and that’s uranium. In my opinion. I don’t think there’s another commodity that has a more positive backdrop than what’s happening within the nuclear energy sector, and uranium. And when you look at the sprite physical uranium trust or spot, what do you think of this chart?
Chris Vermeulen 35:35
Yeah. I mean, this is a really strong chart, just using Fibonacci extension based off this last level. Here we can, we can get a gage of where this could run. This is a super strong looking bull flag pattern. As a technical trader, a bull flag pattern is, you creates a flag pole, so a move up, and then a flag usually flags in the opposite direction in the wind, flagging downward. And then here’s the second half of this move should bring us up to 618, level, and then from there, it can run all the way up to 32 so 2650 to 3250 is the upside potential based on on this chart, and from where that is, that’s a 60% upside move 61 potential, if this was to unfold. Now this is the monthly chart, so obviously this could take very similar to this one, which is a 12345677, or eight months, minus two here. So you know, in five months, it could potentially run up there. So it does have a very strong chart pattern, and it is pointing to higher pricing and see if it can get some traction here,
James Connor 36:41
the second largest uranium producer in the world is Cameco. It’s based in Canada. Why don’t we take a look at that?
Chris Vermeulen 36:47
Yeah, Cameco has got a little bit of volatility. I think the big sell off we saw kind of this summer in the overall stock market created a little bit of a pattern I don’t like, which is a broadening formation. You got higher highs, lower lows. It’s known as a megaphone pattern. It just means volatility is increasing. It’s rallying up, but it’s it’s to higher highs, but it’s also selling off to lower lows. It’s a sign of, you know, indecision increased volatility generally means you’re the previous move, which would be this move up, is running out of steam, and eventually, you know, it could roll over. So there is definitely a little bit of weakness in this megaphone pattern. It’s much better when price consolidates into like a narrowing pattern, so it rallies up and then pauses and then breaks out. So increased volatility, obviously, you need to be aware it’s gonna can probably continue to be more volatile, so you have to take smaller positions, manage those. I’m not a huge fan of this chart pattern. I like the other chart we just looked at, the Sprott one, much more than this, just because this, at any point, could sell right back down, or it might push up to higher highs. It just doesn’t have a very super strong chart pattern. It looks like a sign of kind of exhaustion. That’s not my, my favorite type of pattern. Do
James Connor 38:10
you see a potential double top forming here? $56 level? Yeah. So
Chris Vermeulen 38:18
let’s, we’ll just drop down to the daily chart real quick and kind of get a bit more of a granular look. You could argue a few different things, like you could say there’s a shoulder and a head and a shoulder forming, and it’s usually known as a major topping pattern, and it’s got a sloping down neckline, which isn’t good. It’s to Yeah. I mean, it’s hard to say to me, this is a pretty ugly chart. I just don’t, I wouldn’t trade this. I would look for a different uranium stock to trade. But it’s definitely right up into resistance. It’s at a very strong move. Yeah, to me, it’s just kind of an ugly chart. I wouldn’t, I wouldn’t trade it. I don’t know what to do here. That’s why I wouldn’t touch it. Is because it doesn’t give you any clear direction. You’re really just taking a stab at it, you know, a random, total, random guess of which way we go.
James Connor 39:09
Yeah. So that’s a good overview of the various markets. And in the last few minutes, Chris, I just want to spend a little bit of time summarizing what you think is going to happen here in the coming months. And you said you’re bullish on the S, P and the Nasdaq here as we go into year end. But then come q1 q2 you think the market’s going to top out and we’re going to see a downward spiral. What’s going to create this downward movement in the markets?
Chris Vermeulen 39:33
That’s a good question. I mean, pretty much whatever, whatever creates it. You know, we don’t know what it will be until it happens. And then after the bear market, everybody will label, label it as something like, you know, the tech bubble, or the global financial, you know, crisis. Usually it’s always the same thing. It’s buying momentum has stalled. Sales for companies are starting to slow. People start to sell stocks. We’re already seeing in the United States. People. Burnt through their cash reserves. Credit card debt is skyrocketing. People can’t pay them. Mortgages are going up. So to me, you know, somebody always wants to throw a label on it. Everybody’s like, what? What caused it? Everybody wants to know why it doesn’t really I wouldn’t throw one particular thing. I would just say, we’ve had an incredible bull market. I think there’s been a lot of different stimulus things going on. I think the cycle is just coming to an end. Things can only be pushed and stretched so far. And we’re starting to see, you know, all kinds of weakness in certain assets or certain economic data slowly starting to lose momentum or change direction. And so I really just think it’s just a cycle. I mean this, we go through these all the time, major cycles throughout the economy, in the stock market, so I just think we’re running out of steam. And once that momentum, once the things start to roll over, and the momentum shifts directions, that’s when things actually pick up speed. Because now businesses are like, oh, man, things have actually turned a corner. Businesses tighten up on spending. They start laying off, and people start, obviously employment starts to go up. So it’s just this whole string of things that kind of happen naturally. And we could say it’s going to be some AI bubble or whatever, you know, covid bubble has burst, or whatever they’re going to call it, but it really is just time has done its thing. We’ve all got super greedy everybody. There’s bubbles everywhere, and they just need to burst and reset. It’s, you know, things always get stretched too far in each direction, and eventually they kind of break and they revert to the mean or beyond, and then turn around again. So it’s just time. I think, in terms of what is doing. It is just a cycle. Well,
James Connor 41:43
I think it’s going to be very interesting to see what companies are saying with their q3 numbers. We had many companies during q2 they came out and they said they saw a lot of weakness within the the American consumer and numerous companies, Starbucks, McDonald’s, Nike, Airbnb and Home Depot and so many more. So it’s I think that could be a potential sign of trouble right there, for sure. So Chris, as we wrap up, I want to thank you very much for spending time with us today and sharing your thoughts on what’s going to happen here in the coming months. If somebody would like to follow you online or learn more about your services. Where can they go?
Chris Vermeulen 42:21
Yeah, they can. They can follow me on YouTube, at the technical traders, or they could go to my website, the technical traders.com and I run through the markets every morning pre market. So people before the markets open, you get a glimpse of what everything’s doing, how it’ll affect any positions we’re in. I share my trades. I do. I focus on just ETFs, whatever I’m trading with my own portfolio, I share in detail with everybody else what to buy, how much to buy, our targets, our stops. And the videos are super educational. You learn how all the markets are interwoven, and when there’s big days of panic buying or selling, you know, we’ll, I’ll be in there showing you how we can gage and see this and how each of those are actually very good indicators for us to take control of the markets and take advantage of people’s emotional swings. So yeah, they can ride my coattails, copy my trades, learn how to read the charts at the technical traders.com Well, that’s great. Thank
James Connor 43:15
you very much, Chris. Thanks, James.
Chris Vermeulen 43:17
Appreciate it. Take
James Connor 43:18
care. Well, I hope you enjoyed that discussion with Christopher Mulan and gave you some ideas on what might be happening in the capital markets in the coming months. As Chris mentioned, he’s very bullish on the gold price in the long term. And if you would like to learn more about gold and how it can benefit your portfolio during these uncertain times, visit our sister company, hard assets alliance.com. Hard assets Alliance is a trusted platform that’s being used by over 100,000 institutional and retail clients to buy and sell physical gold and silver. Once again, that’s hard assets. Alliance.com there’s a link below in the show notes, I want to thank you very much for spending time with us today, and if you have any ideas on who else you would like to see on our channel, please let us know in the show notes below, once again, thank you.
