Will the S&P 500 Crash By 50%? How Gold Could Protect Your Portfolio | Chris Vermuelen

James Connor 0:05
Hi and welcome to Wealthion I’m James Connor. When examining the economy and financial markets, I like to study both fundamental research and also technical research to provide insights on where the market might be going. Fundamental research examines the macro and the micro elements, as well as the financial statements of a company, where his technical research examines the price action of an asset and where the trend is going. My guest today falls into the latter category. Chris Vermuelen is the chief Market Strategist at the technical traders, and we’re going to get his thoughts and where he thinks the markets are going in q2, and beyond. Hi, Chris, thank you very much for joining us today.

Chris Vermeulen 0:42
Hey, thanks, James. Pleasure to be on the show.

James Connor 0:44
So why don’t we look at both the s&p and the Nasdaq on your charts.

Chris Vermeulen 0:48
If you take a look at the charts, more or less, if you kind of step back for one view here and actually look at the stages that the markets go through, because this is where all my analysis really comes down to is understanding where the markets are, in terms of which stage it’s in. And this is based on Stan Weinstein’s book, How to profit from bull and bear markets, he breaks the market down in four stages. And where where I believe we are right now, you know, from a high level is stage three topping phase. And this is this is very difficult phase for, especially for those trading sectors or individual stocks because they’re all over the place. And the overall stock market when we look at the s&p 500, and the NASDAQ, for example, they are hitting new all time highs, and they don’t reflect this blow off top that we saw in growth stocks in 2021. And they don’t reflect this kind of bear flag this pause before the markets go even lower. So the markets are pretty masked right now. And so if we do take a look over at the SP 500, for example, we can see we are hitting new all time highs, we’re pushing higher. And as we just mentioned here, this pink line is the 20 day moving average and and so the s&p 500 is just keeps bouncing up this 20 day moving average. And today we’ve got a pretty big gap down or, as you and I are recording this. And we’ve seen these big moves to the downside over and over again. And I have an indicator that shows us when there’s panic selling when the average investor is dumping shares using the New York Stock Exchange up and down volume ratio. And we’re seeing that today we have panic selling in the market. It’s not huge volume to the downside is just people are thinking the market is topping and they’re getting out. And typically every time we see this, and we tend to see the put call ratio spike up and pop, which we are seeing right now as well. The markets want to go higher, more or less people are dumping their shares. They’re scared and they’re buying downside leverage, like put options to profit from falling pricing, and they seem to always get caught off guard. Because the market we’re in an uptrend they are betting against the market. So you know, when we look at this chart, we’re at support. I would not be surprised if we see the stock market hitting new all time highs, you know, two or three, four days from now potentially very easily.

James Connor 4:12
And what about the NASDAQ?

Chris Vermeulen 4:15
Yeah, if we take if we take a look at the NASDAQ, it has been struggling a little bit more in terms of price action, it’s really been trading sideways quite a bit longer. And you know, if we kind of look at it from a couple different views, I have some different indicators and analysis that if we look at the bottom of this table down here, the QQ Q it says risk off and what this is taking a lot of things into account a lot of technicals is taking price action is taking momentum, it’s taking cycles, sentiment, volume flows for orders, it’s taking a lot of different stuff that’s telling us people are actually getting out of this sector and this is a little bit of a warning sign. And when we compare it to the SP 500 For example, we had A new trend start back in November for the SP 500. The SP 500 is up roughly 17% So the SP 500 has been doing very well if we compare that to the NASDAQ from when the uptrend started, the NASDAQ isn’t performing quite as well it’s it well it’s it’s down very sharply today it’s it’s picked up speed, but overall the s&p 500 Over the past week has been outperforming the NASDAQ by several percent. And typically the NASDAQ should be blasting past and outperforming so and it was earlier throughout this this this trend. So the NASDAQ and the tech stocks are starting to lag they’re starting to pull back. And that is a sign that it’s running out of steam. And a really good way to look at this James is I’ve got this hot list of stocks and more or less the top performing the strongest sectors are at the top and the worst end up going down down near the bottom. And but what’s really interesting over the past week and change is if we look at all these top ones pretty much from from Beto, which is Bitcoin. We’ve got Bitcoin, which is an alternate currency, people are scared of the stock market. So they’re moving to a different currency, different asset class, we got resources, which is and then we’ve got energy, more energy, energy, gold miners, copper miners, marijuana, silver miners, these are all commodity based or alternate currencies, gold miners, you can say is based around gold. And that’s an alternate currency as well. So what I have found is typically when we get very close to a stock market, top and economic cycle, like the economy slowing down, we tend to see precious metals commodities do well, energy is on fire, energy stocks are ripping higher, they’re leading the way. And we also see industrial capital goods like industry, the industrial sector, equipment, people upgrading their the factories and things because they don’t realize there’s a cycle at play here, they think they’re going to keep growing this COVID bubble is going to continue. But that’s not really the case. And, and all those things are taking off. And if we look at xL AI, for example, which is industrial, it has been, you know, ripping to the upside hitting new all time highs, and that is because companies CEOs, they don’t understand the cycles of really the economy of the stock market and they’re they’re expanding their factories, they’re buying new equipment, all of these capital, capital goods, and they don’t realize the music probably going to come to an end we’re gonna hit a recession. And so this is a we’re seeing this in the homebuilder sector as well, a lot of people piling into homebuilder stocks, because they believe we’re going to start another real estate bubble. And another big rally, they think the softness in real estate is just an opportunity. But the reality is they’re they’re loading up and buying all these things and expanding their companies probably at the worst possible time. So when you put all these together, all the fact that these commodities and the mindset of everybody’s super bullish on things, is usually a sign that we’re coming to an end. And I think I might have shared this with you once before but you know, Barron’s came out in March saying bet on the bowl, you know, markets poised to go higher, we got the AI bubble is now in toothbrush. I’m in two toothbrush machines. I just feel like we are in this frothy level. And the signs that precious metals are coming to life energies coming to life is, you know, telling us we are very close to a major stock market peak. And then the economy will follow after it’ll, it’ll get into that official recession at some point.

James Connor 8:44
So you made

And what about the NASDAQ?

The last time we spoke in q1, you were bullish in the short term, but bearish in the longer term. And now that we’re in the early parts of q2, is that still the case?

Chris Vermeulen 8:52
Yeah, so Apple’s definitely right down here testing a pretty major support level, we could argue this might be a technical a double top, which is not a good sign. If we if it starts to break down here we could see a very precipitous fall in apple. This will take a lot of the wind out of the sails for the stock market. Surprisingly, the stock Mark has gone up even though Apple has been you know, moving lower, pretty much all year. So that just goes to show how much power Nvidia has in some of the semiconductor space. But Apple is not looking good just based on this chart pattern. We could get a really rough gauge of the downside potential which is which is roughly going to be about 15 to 17%. Apple could fall very quickly. If it breaks this kind of 169 you know 166 level and starts to go low. All right now the chart is pretty bearish. It is at support right now. But if it breaks, it is, you know, it’s going to start a pretty big fall. And that is going to, you know, I think really put a grind on the markets because this type of breakdown from a double top pattern is going to be very sharp, it’s not going to be one of these slow dissents that takes several weeks, several months to unfold. And Nvidia can inch its way up and counter these moves. This will probably be like a couple of huge red bars and huge gaps, and it’ll pull the market down, have some big down days, and spook a lot of people.

James Connor 9:04
So you made mention of how strong commodities are and I want to I want to go there, but I still want to stay on technology just to provide the viewers with what’s happening here. And I guess the one name that’s leading the downs, leading on the downside is apple. It’s currently down 10% on the year, and this is the year when the NASDAQ is up around 10%. So can we just take a look at that chart and just tell us where you think that might be going?

Chris Vermeulen 9:09
Yeah, so Apple’s definitely right down here testing a pretty major support level, we could argue this might be a technical a double top, which is not a good sign. If we if it starts to break down here we could see a very precipitous fall in apple. This will take a lot of the wind out of the sails for the stock market. Surprisingly, the stock Mark has gone up even though Apple has been you know, moving lower, pretty much all year. So that just goes to show how much power Nvidia has in some of the semiconductor space. But Apple is not looking good just based on this chart pattern. We could get a really rough gauge of the downside potential which is which is roughly going to be about 15 to 17%. Apple could fall very quickly. If it breaks this kind of 169 you know 166 level and starts to go low. Yeah, so Apple’s definitely right down here testing a pretty major support level, we could argue this might be a technical a double top, which is not a good sign. If we if it starts to break down here we could see a very precipitous fall in apple. This will take a lot of the wind out of the sails for the stock market. Surprisingly, the stock Mark has gone up even though Apple has been you know, moving lower, pretty much all year. So that just goes to show how much power Nvidia has in some of the semiconductor space. But Apple is not looking good just based on this chart pattern. We could get a really rough gauge of the downside potential which is which is roughly going to be about 15 to 17%. Apple could fall very quickly. If it breaks this kind of 169 you know 166 level and starts to go low. All right now the chart is pretty bearish. It is at support right now. But if it breaks, it is, you know, it’s going to start a pretty big fall. And that is going to, you know, I think really put a grind on the markets because this type of breakdown from a double top pattern is going to be very sharp, it’s not going to be one of these slow dissents that takes several weeks, several months to unfold. And Nvidia can inch its way up and counter these moves. This will probably be like a couple of huge red bars and huge gaps, and it’ll pull the market down, have some big down days, and spook a lot of people.

James Connor 10:35
So one of the names that’s kind of leading to the downside today, or it’s also bringing down the broader market is Tesla, and they came up with their q1 numbers, they were lower than expected. Maybe we can take a look at that. And give us your thoughts on Tesla.

Chris Vermeulen 10:49
Yeah, Tesla is clearly in a downtrend as well, it’s got we’ll zoom way out here, it’s got a much uglier chart, it has kind of, if we were to kind of put it where Apple was Apple kind of you know, had has a support level. And then right now Apple would be trading equivalent to somewhere around here. And this is the type of precipitous fall we could see in apple. Now, if we take a look at Tesla, it is clearly in a downtrend. That’s making a series of lower highs, lower lows, and longer term picture, it’s even got bigger, bigger downtrend at play. So we could see, Tesla very quickly dropped down to the 121 15 mark. The chart pattern is pretty darn bearish. It is a series of bear flags meaning price sells off. And then it flags in the opposite direction. This is known as a pause and then it continues down whichever the direction was into that flag. And now it’s forming a another bear flag, which is pointing to another move down. So these two heavyweights are both on the verge of breaking down. And we can see that there’s a support level from back in last April, that if it’s broken, it’s going to be just like Apple, both of these could break critical supports and have a very, very sharp drop. And that could turn the tides on the market and stall stall them from wanting to rally going into May. Okay, one more technique before we move on. Let’s look at Nvidia. It’s up. I think it’s up 80% on the year and which means it’s added another trillion dollars in market cap. So let me let me hear your views on Nvidia. Yeah, so Nvidia I mean, it’s still in a very strong uptrend, it’s pulling back to this pink line, which is the 20 day moving average, which if we’re in a really strong uptrend, it should it should hold. I do believe we’re in kind of a nosebleed territory. We had a lot of people getting nervous around earnings. And then we had this good earnings and a huge blow off move. But now we’re getting into volatility and we had a big gap up price ran up and then got hammered down. And now it’s trying to it’s digesting this is still a very bullish chart pattern for an NVIDIA The question is, is this going to be a little double top and we kind of break down below this level, if it starts to break down, we could see a very, very quick, it’ll be a very precipitous fall as well. There’s a lot of momentum traders and Nvidia. People who just keep piling in and they got their eye on it that when it starts to roll over, they’re all going to want to get out. And there’s a lot of general public people who don’t really know much about trading or investing who have been chasing in video higher. And once they start to lose a bunch of money, they have really no real strategy at play, they all start to panic out and it just creates a wipeout effect and massive volume. So that’s the problem with these kind of these huge brand names and these huge kind of bubble ish moves, it sucks in everybody that they all panic at the same time. So what goes straight up could very quickly come straight back down. And a lot of people will take a beating but it’s holding up we need to see if we’re going to have one more big push and blast through 1000 and maybe have one push into May or has the market topped and are we going to see it pull back and as you and I are speaking to me today is a very good very important pivot point because everything is now at critical support including Tesla and apple and NVIDIA the stock indexes. We’ve got panic selling on the on the on the market, which is telling us usually that’s oversold, we’re ready for a bounce. People are buying put options. They’re betting on lower pricing. So we’re you know, we’re at this turning point is the market gonna break down and claps or are we about to shoot up and have another rally and that’s where money position management comes in. Whatever happens we need to make sure we you know manage those positions protect our capital going forward.

James Connor 14:48
So having said all that, why don’t we take a look at gold because this is one of the ways that people use to fortify their portfolios. I want to get your thoughts on gold. We’ve it’s finally up on the year. First up here We’re in quite some time even though we’re only three or four months into the year. But what’s your view on gold here?

Chris Vermeulen 15:05
Yeah, I really like gold. I mean, I love to use Fibonacci extensions, which give us a really good gauge of the momentum, the upside targets, the downside targets. And just based on this last rally in this bull flag pattern, we can get a really good gauge of where it should find some of these support levels here now, or the next resistance areas. And more or less gold came up just the other day it hit this, this measured move oops, of 61% extension. Now, the way Fibonacci extension works as it measures the momentum of the first leg, and then it figures out where that pause and pullback is. And when price does reverse, whatever the power of this first leg up should be the power of the second leg. And what I have found is whenever price comes up to the 618 level, and pauses for a day or pulls back, which it did just a second ago, we pretty much always go up and hit the 100% measured move, which is about 2355 2360. So I think the next upside target is, is this 2355 area for gold. And then it’s going to have basically this first this little pattern measured out. And I believe we’re going to probably see that over the next few sessions because people are moving into gold, people are nervous, and it is a different defensive play during certain market conditions. And we are in that prime time where precious metals should come to life which they have. And they could carry the torch the stock market could for example, James it could it could start to pull back, it could sell off. But gold silver miners could continue to rally and become the leader. We saw this back in 2008. Before the market tops. So this, this is nothing out of the norm. And what’s interesting is if we step back and look at the bigger picture, the monthly chart of gold. And we use Fibonacci extension based on this most recent, the low from 2015 to this recent high this bull flag low over here, we are pretty much right at the 618. So this huge multi year pattern also has 618 at the same spot of our short term pattern. And then it shows where that next upside target is, which is 2670, which is a pretty exciting level for us to reach. And I believe we’re actually very similar. So we had we had the gold start a new supercycle back in early 2000s. And then we went into a multi year consolidation. And this was back in 22,006 to 2007. And then we saw gold, silver and miners rally into the stock market top into the beginning of the recession. And so we’ve done the same we started a new supercycle 2019, multi year consolidation, now gold is running, and it could run all the way to 26 2700. Over the next couple of months, remember, this is the monthly chart, so few more bars. And the stock market could could be topping out here. And even if the stock market tops out gold, silver miners could continue to claw their way higher as that alternate currency that defensive play. And then we just need to be aware of that, when there is massive selling in the stock market. And people are having all kinds of panic and real forced liquidation margin calls, gold will most likely pull back and have some type of correction, just like it did in 2008. We saw a 34% pullback in gold before it started that next multi year cycle. So as you and I talked about this to sum it up, because I know you’re gonna ask me to sum this up. To sum it up, I’m bullish on gold to like 26 2700. And then I think we’re going to see a pullback with the overall economy with the stock market because I believe there’s a financial reset coming. And then that’ll be like the ultimate opportunity for a multi year rally to the upside. So that’s kind of like gold in a nutshell from the short term view, which perfectly aligns with this big multi year supercycle view as well. 2600 is quite respectable. I think people would be quite happy with that move in the next couple of months.

James Connor 19:13
Yeah, now why don’t we take a look at some equities and what to look at Newmont is the world’s largest gold producer. And it’s a very unique case. It’s been massively underperforming the market here and take a look at that. Let me know your views.

Chris Vermeulen 19:27
Yeah. So I mean, I don’t I don’t I don’t cover too much on individual stocks because they can do this they can. They kind of dance to the beat of their own drum, they can be dormant for decades like Newmont is just oscillating back and forth. I like to try and catch the tides and a whole sector as a whole. But when you look at Newmont, I mean it’s just been beat up really hard. I mean, we’re going I don’t know how far back this goes, but it is a long time. It is right back to where it wasn’t when I was born 1981 Well Like, that’s not Yeah, they pay dividends. But, you know, you could say they’re getting oversold there at support. I think the precious metal space is about to start a little bit of a run before we go into a bigger correction. But there really is no love in miners. There’s not a whole lot of love and gold and silver either. I think the big. I think we’re seeing countries and loading up on gold. And but no one else is really interested in gold. I think I can talk to pretty much almost any random person and nobody’s interested in buying gold or silver, or even really, miners, because the only people we’re interested in are people like us who kind of live and breathe it and are waiting for this next big leg, which is a bullish sign. If nobody wants something, that means it’s out of favor, that means it’s getting undervalued. And it means there’s gonna be a ton of upside when things turn around the keys, you know, waiting for the turnaround, identifying it and jumping on board for that next run. So yeah, Newmont definitely a struggle. It’s been kind of dead money other than just the dividends it’s paid for the last 25 years.

James Connor 21:06
Yeah, it’s interesting to see the divergence between the physical gold and then when you look at the world’s largest gold miner, Newmont, it’s a unique situation. They just acquired a company earlier this year called Newcrest. So I think it’s still digesting that. And maybe they have a few issues. But massive divergence here. Why don’t we take a look at barrack, the second largest gold miner in the world, and then we’ll move on.

Chris Vermeulen 21:30
Yeah, so barrack has got a much I liked this chart much better. I mean, it really, you know, hasn’t performed very well you can go back 2030 years. But overall, I like I liked the chart pattern of barrack a lot more simply because I feel like it’s trying to build a base here. It kind of had a level through here that it created a bottom it kind of broke through that it ended up coming kind of right up into resistance, this kind of break down level. And now it’s fading back down. I like this fade. Silver has got a very similar chart to this or very, very similar. This fade is just be there’s no interest, it’s just fading out and that is perfectly fine. It’s actually a very strong pattern. Last time we saw a fade like this, we saw a huge rally in Barrick Gold. And I think you know, we’ll eventually see the same thing and it’ll work its way higher. I like it more than Newmont just just because I prefer a bottoming formation where Newmont is more like it’s just keeps falling it’s more like a V shaped bottom. V shaped bottoms are difficult, because they reverse so quickly, you can miss a huge chunk right off the bat. I like something that unfolds over time as a process not just you know, straight down straight back up. So I like the chart um, this very similar to like, just if we look at the overall general basket of gold stocks, you look at gold miners, I mean, it’s pretty much the same as Barrick Gold, it’s put in this bottom how to pop up and it’s just fizzling out of favor and just kind of waiting for its time to shine and the keys just patience. These are these are super cycles, these take like 1015 years to unfold. We’re getting there. I think the bottom is in for gold and silver and miners. It’s just we just need to wait for this multi year rally to the upside.

James Connor 23:18
So we can’t have a discussion on gold without talking about Bitcoin. Many people refer to it as new gold or digital gold. What are your views on Bitcoin?

Chris Vermeulen 23:27
They believe it was up 160% in 2023 it’s already up 50% this year? Yeah, I mean, I’m not a huge follower of Bitcoin. But to me, it feels like it’s in this nosebleed territory as well, in terms of I think it’s poked to a nominal new high a lot. You know, Fibonacci theory as the markets always, always searching to make a new little high or a new low. And that’s how it cleanses the market. Anybody you know, if you’ve got a high here, for example, anybody who’s short and hits a new high, they’re gonna have to cover their shorts, and then they’re probably going to get long. And because they’re expecting it to keep going and then the market goes the opposite way. And the market loves to do things like that. And we have just hit this new kind of nominal high, and now it’s starting to pull back. And of course, it’s gone into this parabolic kind of feeding frenzy these bars that go straight up, and when something goes straight up, and it’s headline news and everybody’s talking about it. It makes me nervous. There’s no doubt let’s just drop down to a daily chart just so we can get a closer view of this. There is no doubt bitcoin is in a is in an uptrend. It is consolidating, actually just a lot like Nvidia, it’s just it’s had a huge run. It’s just chopping around its building potentially a bull flag or a pennant formation. And if this resolves, with the underlying trend, which is up we could see another big rally it could go up to $100,000 You know, per Bitcoin fairly easily. So this I mean, there’s you don’t want to pick a top I’m not a fan. And of ever picking it up, the trend is up. It’s digesting with volatility. Just keep in mind whenever you have a huge move, and it’s digesting, with, with big pops and drops, so this pattern here looks very similar to what we have here. Lots of volatility here, it’s usually a sign it’s short term weakness. The question is, is it just a pause? Or is it a break down? And that is where you need to have a strategy in place saying, Okay, if it starts to break break down between some of these lows, do you get out? And wait? Do you bet on the downside to profit from it, or you know what it what are you going to do, and that’s where most people fail. Most people don’t have a game plan. They just buy into something and they hope and then they ride that roller coaster, until generally somebody will hold something until it becomes a huge loss. So they can be huge right now. But it’ll start to break down, it collapses and it goes down. And then they have so much pain that they have to just get out. People don’t realize you should be scaling out you should be locking in gains when things get overbought. And that resistance like they are right now. And if it starts to break and run higher, you just you can buy back in and play the next leg up. That’s how I play it. Everybody’s got their own strategy and timeframe.

James Connor 26:08
But so you mentioned earlier that oil has been very strong this year. Why don’t we take a look at oil, I believe it’s up 15% on the year, a lot of that move has come in the last month.

Chris Vermeulen 26:18
Yeah, I like oil. I mean, that’s kind of the kind of space that I grew up in is the golden oil guy. But we see oil is put in this rounding bottom, it kind of tried to eat through resistance here. And now it’s breaking out and it’s running higher. Naturally, we see energy and energy stocks do well, just before the stock market for the economy kind of tops out. And you know, oil only broke out a couple of weeks ago. If we look at the energies and the energy sector stocks like XL E. This is a really good view, like we had a bottom here in kind of energy stocks, and they broke out like a month and a half ago and just screaming to the upside. And this to me is this is what gold miners should be doing. Typically you see, for example, energy stocks, the leverage play around a commodity. So energy stocks usually break out first. And then the underlying commodity follows suit a few days later or a couple of weeks later. And so energy stocks broke out and ran and then oil broke out a couple of weeks later, as a delay. Gold in the precious metal space isn’t doing that which is telling me that this isn’t I don’t think the start of a huge run in the precious metal space, because we should see gold miners and silver miners breaking out and running. And then gold limps around and breaks out afterwards. But we’re not seeing that. So we’ve had about a 25% run in GDX. It’s had a very nice run, we’re seeing a very big run in energy stocks. I think, again, this is just a sign that we’re in those last legs, but energy is on fire and the energy stocks are really threatening to start another huge move. If you look at this massive pattern, we go way back in time here. This is a giant pennant formation, a big pause a launchpad for potentially another big run a big push higher in the space. So why don’t we go back to the oil chart again, because I want to get your thoughts on where you think it’s going. It’s around $85 a barrel.

James Connor 28:19
And when you look out the next couple of months, do you see it going to 100 or higher?

Chris Vermeulen 28:25
I think it’s going to run into some resistance probably somewhere up around this high and kind of these highs right through here simply because you know, if we were to just kind of take the depth of this, this the depth of this volatility here, if I was to just take that, and it was a super rough drawing and just stack it on top of his breakout, it actually brings us the volatility and a bottoming and a topping phase is usually the run of the breakout or the breakdown. And so it brings us right up into these these highs which you can see back over in 2022, or some highs. We had a lot of volume kind of through it and pivot lows, more pivot lows, we’re stuck under it. So to me, I feel like resistance will be somewhere around that 90 to about the $95 area, which is a nice move from where are we that’s $10 a barrel. So there’s there’s some good upside, gold energy miners will probably break out of that big pattern I just showed you and start to scream higher. So yeah, I’m bullish on the energy space. This is their time, believe it or not, it’s their time to shine even though I see, you know, bleak times ahead. People are expecting oil prices to go up because most people think we’re in a strong economy, and it’s gonna get stronger. But you know, that’s all the isaa how everybody perceives information. Well, it’s also worth noting that we are in an election year, of course, the current government is trying to keep the oil price down because they don’t want higher inflation. But then you have these external forces, let’s just say Russia and also Saudi Arabia. They want the oil price higher. So it looks like there’s a bit of The battle going on here. And it looks like Russia and Saudi Arabia are winning right now.

James Connor 30:05
So that’s a good overview of oil and what your thoughts are there, we also got to take a look at Copper, you made mention that it’s been very strong this year, I believe it’s up around 5% on the year, it’s firmly above $4 a pound, what are your views on copper?

Chris Vermeulen 30:20
I mean, copper is a good broad indicator of what people think the economy is going to do. If we take a look at it, it has been, you know, really trading sideways. Over the past year and a half, it’s, it’s kind of starting to make some higher lows and higher highs. Let’s just look at the big picture of it, though, if we look at the big picture of copper, to me, it has a bit more of a bearish space, a bearish bias. And this goes back to our stage, our economy, our stock market stage analysis, where you have, you know, you’ve got to basing stage one, stage two, and then we go into this giant kind of stage three topping phase, which is more or less you put in a tarp, and then it breaks down and you put in this complacency move, where people think this is just a pause before it’s going higher. And you know, eventually, we have another break down and reset. So I’m not a fan of this simply because it has broken down copper is below its topping pattern. And when we look at the broad stock market of the majority of stocks and equal weighted stocks, they’re also forming this pattern. And so I’m expecting copper, it might push up a little bit, come on, this is a strong time for commodity. So it might push a little higher, maybe even get to 425 or 450. But I believe it’s going to resolve to the downside. And I think there’s a good way to shows James is actually this, this kind of blended these two blended indexes. So this is the RSP, which is the equal weighted s&p 500. So every stocks got the same weighting, the tech doesn’t have a heavy weighting in it. And it’s the Russell 2000, which is kind of the next, the 2000 kind of majority, a good gauge of stocks. And so if we look at what the majority of the stock market is doing, we we put in a major top here, and now we’re kind of just this market is in this kind of complacency move, it’s working its way back up. The majority of stocks are not doing very well at all. And I think we were going to eventually see this breakdown. And this is a really good gauge of what the economy or the stock market in general is doing just because it’s a larger basket of stocks, it’s more or less 2500 stocks, and they’re all and more or less the big top 500 are equal weighted. So this this is very similar to copper to me this is we’re just in a rally, it’s just a matter of time for fizzles out. And we see the stock market had a lot lower.

James Connor 32:44
Chris, I want to get your opinion on free pour, which is one of the largest copper producers in the world because it’s been leading copper on the upside. I believe it’s up around 15% on the year versus copper, which is only up five. What’s your thoughts on Freeport?

Chris Vermeulen 32:58
Yeah, I mean, the chart has been holding up very well. I’m just gonna look at the monthly charts this week and go back in time a bit here. Yeah, so it is leading copper, it’s starting to break out above some of these these highs from over the past year. It’s muscling its way up. And again, I think I think a lot of people are moving into sectors and commodities or stocks based around commodities like this. Because I think a lot of people think the economy is going to continue to grow, it’s going to continue to get stronger. Housing is going to take off copper is going to be needed all those things. So the fact that it’s breaking out and moving is a strong sign for copper. I think there’s there’s upside potential. But overall, I mean, this is a very big volatile chart pattern has been really struggling for the past four years. And it is at the upper end of its range, which each time it’s got up here it’s had a very big sell off. So I’m not I’m not too excited about it at this point. I think we’re going to see copper miners in general. You know, we can look at the copper x which is actually a top performing sector right now. If we look at the copper miners, which is got this stock included in it and we kind of zoom out a bit we can see that it is breaking above these highs and it has a bunch of volume starting to move into it. And people are people are bullish. So short term I’m bullish on on the copper miners, their top performing third best performing sector right now on our list, they’re pushing higher. But I don’t think there’s I don’t think it’s gonna be a huge massive move. I really do think the stock market is on its last legs last few weeks last month or so. And I think we run into some big headwinds for the stock market and it will eventually pull even commodities down with it. And why don’t you just expand on that when you say we’re in for a big pullback in the stock market? When you look at the s&p for example, or the NASDAQ. Where do you see it going as we go into q3 q4, yeah, so I have a feeling we’ll use Fibonacci retracement here. So there’s a few different levels we could look at. So if we take the the low that we saw back in October, I think the stock market could very easily this is the this is the SP y, I think it could pull back roughly to both the 460 $470 per per share, which based on where we are right now is really only about an eight 9% pullback. Now, I do think we could see a much, much bigger pullback as we as things unfold. I think, I don’t know if this, I think this, this could very easily happen this year, I think we could see the markets pull back 15 20% down into this, this, these this range where it rallied up and pulled back. It also happens to be a Fibonacci retracement zone between the the 618. And the point three, eight. And this is the window where whatever the run up is, this is where the market typically in this box tends to pull back to which is also going to act as support because that’s where it also had a pause before. So I think there’s quite a bit of potential this year of a 20% pullback. And then from here, who knows. I mean, I think we could go a whole lot further, we go down to the COVID lows. That brings us even further now this this is getting pretty bleak this is this is getting into like full on stage for financial reset a lot of things breaking lots of unemployment, we’ve got lots of bankruptcies, I think this market could pull back and come down to this low. And this if it does come down to this low, I think it’s going to form a major topping phase. And this is that neckline that you and I kind of touched on the support level that like Apple is threatening right now Apple is down here, Tesla is down here. If we break that level, that’s when all hell breaks loose. And we go into a major stage four decline, which we could go to the beginning of the last stock market bottom major bottom. And that brings us a lot lower down into this range of 40 to 50% correction, which brings us back down to the 2018 to 2020. Lows. So that’s kind of how I step step things back we got it’s kind of take it one wave at a time, one bar at a time. But there is very, I think very likely possibility of a 50% correction. And I don’t know if that’s going to happen this year, I think this could bleed out over next year as well. I feel like it’s more a little bit more like a 22,000 tech bubble where it could actually take two or three years to slowly work itself out. A lot of people don’t think that’s going to happen, the average investor thinks things are good. And typically when everything is really good, and everybody’s got you know, as much money as they’ve ever had in their life, typically things go the other way and catch everybody off guard. And this will do exactly that.

James Connor 37:50
So just to summarize, you think the s&p and the Nasdaq are going to move higher in the next month or so at which point they’re going to top both, they’re going to start to pull back. And then we can easily see a pullback of 10 to 20% In the ensuing months. And then as we head into 2025, you think that pullback is going to accelerate, it could go down to as much as 40 to 50%. Right?

Chris Vermeulen 38:15
And that and that big deceleration that big stage for bear market sell off. That will be pulling precious metals down miners down. And we we want that I mean, I want that as an investor, we need a cleanse, it’ll allow us to get into stocks with good dividends at fair value or below value. It allows us to buy gold silver miners, they’ll probably be beat up pretty hard. And it’s gonna be an opportunity. It’s it really is you just need to understand that, you know, you need to protect yourself from it and then preserve your capital or grow it as as the markets are falling, and then redeploy the capital when the strategy when when the market firms up in turns around.

James Connor 38:57
Chris, so far, our conversation has been focused on the US economy and the US markets. But you and I both reside in Canada. Anna, I’m curious to hear what your views are on the Canadian economy and the Canadian stock market?

Chris Vermeulen 39:10
Yeah, for sure. So I mean, obviously we’re pretty resource heavy. The Canadian markets. If we take a look at this is the the the Venture Exchange, you know, a good way to get a gauge. I’m not sure how familiar people are with the Canadian venture. It’s kind of like our small cap sector. If I was to overlap that with the ark, K ETF, for example, it’ll give people an idea if it will load back far enough here. All right. Well, it doesn’t quite load back far enough. Well, let’s take a look at the TSX here. The TSS TSX is the Toronto Stock Exchange and it is resource heavy, and more or less it has really been struggling for the past few years. It’s just starting to come up do a double top. I think we’re seeing energy stocks, we’re seeing gold stocks, have that rally and push. So we’re kind of getting that resource pop in the markets. The big question is, is this going to be a double top and we’re going to come back down. But overall, you know, this, the Toronto Stock Exchange has definitely struggled, it hasn’t had really massive gains over the past couple of years, like the s&p 500. It’s not breaking play over the last 10 or 20 years. Yeah, I mean, it’s yeah, it’s definitely it’s been a very slow grind. And, and I think a lot of that has to do with, with resources, obviously, 2011 2012, we saw gold and silver and a lot of things struggle. And really, it’s just been a grind every time it gets some good gains, it gets wiped out so quickly with some sell off. But overall, I mean, the this space, I think, I think we could see the Toronto Stock Exchange do fairly well after we have this financial reset, because I think we’re going to see that supercycle in commodities really take off gold is going to do well, I think energy is going to do very well. And this is very heavily weighted to those. So you know, we’re not the TSX is in crazy tech heavy. We need the next bottom in the stock market for resources to take off, and then the resource stocks will take off and drive the TSX up. But right now it is kind of right up at a double top. And it’s putting in a topping kind of potential phase right here that if it does break down below these lows here around this 18,000. Mark, you know, we’re going to be having a pretty quick haircut down to 15,000, maybe 14,000. Very quickly. So I’m not the most again, I’m not I’m short term bullish on pretty much the stock markets in general, I think they’re very close, they could be topping out any day here or over the next month or so. And then I think it’s going to be a downward battle protection of capital for potentially a few years.

James Connor 42:03
Yes. It’s interesting that you say that you’re negative on the Canadian markets, because I just had a conversation with David Rosenberg. He’s also negative on the Canadian economy in the markets. And if anybody wants to watch that, I will include a link to that in our show notes below. Chris, that was a great discussion of your views on the markets. And I want to thank you for spending time with us today. And as we wrap up, if someone would like to follow you or learn more about your various services, where can they go?

Chris Vermeulen 42:32
Sure, yeah, they can go to TheTechnicalTraders.com. And I share my charts analysis everyday there, I share all the trades that I do, I focus on ETFs. And if they’re interested in learning my style of investing, which I call asset investing, they can go to Amazon or chapters and pick up my book. It’s called asset investing. It’s how to hold only equities or assets that are rising in value, even during bear markets. So it’s, it’s a whole different way to invest and take advantage of both the upside and the downside in the markets.

James Connor 43:04
Well, once again, that was a great discussion. We’re going to have to have you back in a few months to see how things shake out in the markets. Once again. Thank you.

Chris Vermeulen 43:10
Thanks, James. Take care.

James Connor 43:12
Well, I hope you enjoyed that conversation with Chris Vermuelen and it gives you some insights on what to expect in the coming weeks and months. One of the things that really resonated with me was how bullish Chris was on the price of gold and where he thinks the price is going. Gold has been in a long slumber for many years and it looks like it’s finally starting to wake up. And if you would like to learn more about gold and how to buy gold, check out our website wealthion.com/howtobuy and you can see a free report where it will tell you everything you need to know about buying gold. If you have any suggestions on who you would like to see on the Wealthion channel, please let us know in the comment section below. Once again, thank you very much for spending time with us today and I look forward to seeing you again soon.