As we wrap up the year and celebrate the festive season, we wanted to share some of our favorite moments from one of your favorite Wealthion interviews from 2024: Chris Vermeulen with James Connor. Enjoy!
All the best for a happy, healthy, and prosperous New Year!
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Original interview: https://youtu.be/5h4-ww9_Ip4
Andrew Brill 0:00
Happy Holidays from all of us here at wealthion. To all of you, I’m one of your hosts here at wealthion. Andrew brill, we took a look back at this year, and hope you enjoy these favorite guest moments from one of our best interviews of 2024
James Connor 0:18
before we start looking at the charts, maybe you can just give us your view of the big macro picture?
Chris Vermeulen 0:23
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 2:54
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,
Chris Vermeulen 3:07
I think there’s, there’s 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 two 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 is 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 lightning 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 the. 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 5:27
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 by the end of the year. Yeah, roughly about 6000 Yep. 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 highs like the S P is,
Chris Vermeulen 6:05
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 net for the NASDAQ going forward, so there is still upside potential, but definitely had there’s been some damage done. People who were 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.
James Connor 7:11
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 7:32
Yeah, I mean, I’m, 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 the Middle East, 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 8:54
It’s amazing, with everything that’s going on in the world, that oil is hanging in where it is. And you got to wonder if we didn’t have these hostilities, and we didn’t have the war in Ukraine, oil would probably be at 40 or 50 bucks.
Chris Vermeulen 9:07
Yeah, and I think, though, I think the world has really changed law. 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. Picture back in, you know, back a long time ago, when there was, 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, okay,
James Connor 10:25
Chris, I want to ask you about one more medal before we move on, and that’s uranium. I, 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 10:46
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 you can get some traction here.
James Connor 11:52
The second largest uranium producer in the world is chemical. It’s based in Canada. Why don’t we take a look at that?
Chris Vermeulen 11:59
Yeah, chemicals 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 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, 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 sprout 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.
Andrew Brill 13:20
Thanks again for watching these favorite moments of 2024 and we hope we can continue to provide you with information that will help you invest wisely and be financially resilient. Wishing all of you a healthy, happy, safe and prosperous 2025.
