How The Mother Of All Market Rallies Would End | Chris Vermeulen

Summary

In this financial discussion, the participants delve into market patterns, retracements, and potential corrections. They explore the use of Fibonacci extensions and retracements to predict market movements and discuss the current state of various assets, including stocks, gold, Bitcoin, and real estate. The conversation highlights the importance of understanding market trends and being mentally prepared for potential shifts. The guests share their strategies for navigating the markets, emphasizing the significance of risk management and the ability to adapt to changing conditions.

Takeaways

• 📉 Markets often exhibit patterns of correction to certain levels or percentages, such as 38%, 50%, or 68% retracements.
• 📈 The use of Fibonacci extensions and retracements can help determine potential market momentum and selling pressure.
• 💹 Despite general market optimism, not all sectors are performing well, with small-cap stocks lagging behind tech-heavy indexes.
• 🔄 The concept of market rotation suggests that money flows from one asset class to another, impacting overall market trends.
• 📊 Technical analysis, including trend following, can provide insights into market strength and potential turning points.
• 📈 Some assets, like gold and Bitcoin, have shown the tendency to reach new all-time highs, but history shows they often face significant corrections.
• 🏠 The real estate sector, including home builders and related industries, may be facing a high-risk period due to market over饱和和 and potential slowdown.
• 💰 A balanced portfolio strategy involves holding cash and assets, adjusting based on market conditions and risk tolerance.
• 🌐 Global economic factors, such as central bank policies and currency movements, can influence market directions and investor sentiment.
• 🔮 Seasonality patterns in the stock market suggest potential market stalls or declines after May, based on historical averages.

Q & A

What does the speaker suggest about market patterns and corrections?

The speaker suggests that markets do exhibit patterns and often correct to certain levels or percentages, such as 38%, 50%, or 68% of the initial rally. Fibonacci retracement is a method used to predict these corrections.

How does the speaker view the current state of the stock market?

The speaker believes that while certain indexes like the NASDAQ and S&P 500 may appear to be hitting new all-time highs, a deeper analysis reveals that many sectors are struggling and the market is in a topping phase, potentially leading to a significant correction.

What is the speaker's stance on small-cap stocks?

The speaker is not optimistic about small-cap stocks, specifically the Russell 2000, as it is currently at a major resistance area and他认为 it is part of a false rally.

What does the speaker think about the role of technical analysis in trading?

The speaker values technical analysis for its ability to identify trends, power, and strength behind market moves, and to understand money flows between different asset classes. It helps in following the market trend and making informed decisions.

What is the speaker's view on the potential for a market correction in the future?

The speaker is bearish on the market in the long term and believes that a significant correction is likely, possibly starting as a topping phase, but still sees potential for short-term rallies.

How does the speaker approach asset allocation in his strategy?

The speaker follows an asset rotation strategy, focusing on owning one asset at a time that is moving up and in favor of their risk tolerance, while also holding a portion of the portfolio in cash or short-term treasury notes for safety and income.

What is the speaker's opinion on the current performance of real estate and related sectors?

The speaker is bearish on real estate, believing that the market is softening and that sectors like home builders and lumber are at risk of a significant downturn.

How does the speaker use Fibonacci extension and retracement in his analysis?

The speaker uses Fibonacci extension to identify potential upside momentum and Fibonacci retracement to predict selling pressure and market corrections. These tools help to determine potential support and resistance levels.

What is the speaker's view on Bitcoin's recent performance?

The speaker is cautious about Bitcoin's parabolic rise, viewing it as a fear-based rally driven by FOMO. He notes that such sharp upward movements are often followed by significant corrections.

What does the speaker suggest about the US dollar trade?

The speaker expresses interest in a potential US dollar trade, as he observes that the US dollar is slowly building a base on the monthly chart, which could indicate an upcoming bullish movement.

What is the speaker's strategy for managing market risks?

The speaker's strategy involves being mentally prepared for potential market outcomes, managing positions carefully, and not trying to predict tops or bottoms. He emphasizes the importance of staying with the trend until it clearly reverses.

Outlines

00:00

📈 Market Patterns and Corrections

The paragraph discusses the patterns and habits of market corrections, referencing Fibonacci extensions and retracements to predict potential market behavior. It highlights the importance of understanding market momentum and selling pressure to anticipate pullbacks and identifies key levels such as 38%, 50%, or 68% of the initial rally. The speaker uses the S&P 500 futures as an example to illustrate potential market pullbacks and discusses the timing of buying, selling, or holding assets at market tops.

05:01

📊 Market Sentiment and Resistance

This section delves into the sentiment and resistance levels in the market, emphasizing that not all sectors are performing equally. It discusses the disparity between tech-heavy indexes like the NASDAQ and the S&P 500 and broader market indicators like the equal-weighted S&P 500 and Russell 2000. The speaker argues that the market is in a topping phase, with a false sense of a rally driven by complacency and a few big tech companies, rather than a broad-based market strength.

10:02

🤔 Short-Term Bullish vs. Long-Term Bearish Stance

The speaker shares his nuanced stance on the market, being short-term bullish but long-term bearish. He explains that despite a positive outlook on the market for the next few weeks, he anticipates a significant market downturn later in the year. This perspective is based on technical analysis, intermarket analysis, and the observation of market trends and money flows. The speaker emphasizes the importance of not trying to time the market but instead following the trend and adjusting positions based on technical signals.

15:03

📈 Analyzing Nvidia's Chart and Market Dynamics

The focus shifts to an analysis of Nvidia's stock performance, using Fibonacci extension as a tool to identify potential upside targets. The speaker discusses the company's strong fundamentals and its position in the AI space, suggesting that it could defy broader market corrections. The conversation also touches on the potential overreach of AI in various industries and the importance of being mentally prepared for market seasonality and potential corrections.

20:07

📉 Predicting Market Corrections and Key Levels

The discussion continues with predictions of market corrections, using Fibonacci retracement to estimate potential pullback levels based on historical data. The speaker considers the possibility of a significant market correction, potentially reaching levels near the COVID lows. The conversation also includes an analysis of gold, silver, and miners, suggesting that these sectors may be indicative of a market turning point as investors rotate into these assets.

25:07

🚀 Bitcoin's Parabolic Rise and Market Behavior

The speaker expresses caution about Bitcoin's parabolic rise, suggesting that such sharp increases are often followed by significant corrections. He discusses the fear, uncertainty, and greed (FOMO) that drive market behavior, particularly in the context of cryptocurrencies. The speaker notes historical patterns where Bitcoin has corrected after reaching new all-time highs and cautions that the current trend may be due for a similar pullback.

30:08

🏠 Real Estate Market Outlook and Risk Assessment

The conversation turns to the real estate market, with the speaker expressing a bearish outlook due to signs of softening in the sector. He discusses the risks associated with the current market sentiment and the potential for a significant downturn in the housing market. The speaker also touches on related sectors like home builders and the lumber industry, suggesting that they may face challenges as the housing market slows down.

💡 Strategy Update and Market Positioning

The speaker provides an update on his investment strategy, revealing a 50/50 split between the stock market and cash. He explains that this position reflects a combination of remaining bullish on the stock market while also being prepared for potential corrections. The speaker's strategy focuses on asset rotation, holding one asset at a time that is moving up and in favor of risk tolerance, while also maintaining a cash position for safety and opportunity.

Keywords

💡Market Correction

A market correction refers to a decline in the price of stocks or other assets, typically by a significant percentage, after a period of sustained increases. In the video, the speaker discusses the possibility of a market correction based on historical patterns and technical analysis, such as Fibonacci retracement levels. The speaker mentions potential pullbacks to certain levels, like 38%, 50%, or 68% of the initial rally, indicating a reversion towards the mean or a consolidation phase after a strong upward trend.

💡Fibonacci Retracement

Fibonacci retracement is a technical analysis tool used to identify potential support and resistance levels in the price action of a stock or other traded assets. It is based on the Fibonacci sequence, where significant numbers like 38.2%, 50%, and 61.8% are used to predict the extent of a correction or rally. In the video, the speaker uses Fibonacci retracement to estimate how much the market might pull back after a rally, suggesting that the market likes to retrace to these key Fibonacci levels.

💡Asset Allocation

Asset allocation is the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. The goal is to balance risk and reward by distributing investments across various asset classes. In the video, the speaker discusses their strategy of being long on the stock market and having a portion of the portfolio in cash, reflecting a balanced approach to managing risk in anticipation of a potential market correction.

💡Technical Analysis

Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing historical price activity, primarily through the use of charts and statistical tools. It is based on the premise that historical price movements tend to repeat themselves, and by studying these patterns, traders can predict future price movements. In the video, the speaker uses technical analysis to identify trends, support and resistance levels, and potential market corrections or rallies.

💡Market Sentiment

Market sentiment refers to the overall attitude or feeling of investors toward a particular security or financial market. It can be broadly categorized as positive, negative, or neutral and is often used to gauge the likelihood of a bullish or bearish market. In the video, the speaker discusses how market sentiment can influence investor behavior, such as the fear of missing out (FOMO) leading to parabolic rallies and subsequent corrections.

💡Sector Performance

Sector performance refers to the overall market performance of a specific group of stocks that share a common business or industry. Sectors are often categorized based on economic segments like technology, finance, healthcare, and energy. In the video, the speaker discusses the varied performance of different sectors, highlighting that while some may be struggling, others like technology stocks may be hitting new highs.

💡Real Estate Market

The real estate market refers to the economic sector involving the buying, selling, and development of land and property. It includes various types of properties such as residential, commercial, and industrial real estate. In the video, the speaker expresses a bearish view on the real estate market, citing signs of softening and potential risks for investors who are overly bullish on the sector.

💡Stock Market Indices

Stock market indices are statistical measures of the performance of a segment of the stock market. They are often used as proxies for the overall health and performance of the market. Well-known indices include the S&P 500, NASDAQ, and Dow Jones Industrial Average. In the video, the speaker discusses being long on stock market indices, particularly the S&P 500 and NASDAQ, as part of their investment strategy.

💡Complacency

Complacency in a financial context refers to a state of overconfidence or lack of concern among investors, often leading to risky behavior and potential market bubbles. It is characterized by a belief that good times will continue indefinitely, ignoring potential warning signs of a downturn. In the video, the speaker warns about the dangers of complacency in the market, suggesting that it can lead to investors missing signs of an impending correction.

💡Trend Following

Trend following is an investment strategy that involves identifying and following the direction of the market trend, whether up or down, and remaining in that position as long as the trend continues. It is based on the idea that trends persist and can provide profitable opportunities for traders. In the video, the speaker emphasizes their trend-following strategy, which involves staying invested in the market as long as the trend is upward, and only exiting when the trend reverses.

Highlights

Markets often exhibit patterns or habits of correcting to certain levels or percentages, such as Fibonacci retracement levels.

Fibonacci extension can be used to determine the potential momentum to the upside in market movements.

The market has a tendency to pull back to sweet spots like 38%, 50%, or 68% of the initial rally.

The sell signal or market top can be identified by observing asset behavior and market sentiment.

The current market situation is not uniform, with tech-heavy indexes like the NASDAQ and S&P 500 showing strength, while others like the Russell 2000 are struggling.

The perception of a market reaching new all-time highs can be misleading, as it may mask underlying weaknesses in various sectors.

Small-cap stocks lagging may not necessarily indicate a good buying opportunity, as market trends and technical analysis should be considered.

The false sense of market strength can lead to complacency among investors, potentially setting the stage for a significant correction.

Technical analysis, including intermarket analysis, can provide insights into the strength behind market moves and potential trends.

Trend following is a key strategy in navigating the market, avoiding the pitfalls of trying to time the market or pick tops or bottoms.

Nvidia's chart illustrates the importance of technical analysis in evaluating stock performance, despite strong fundamentals.

The AI space, led by companies like Nvidia, is expected to have significant growth potential in the future.

Seasonality can play a role in market movements, with historical data suggesting a tendency for the market to stall or decline after May.

Market corrections often follow a pattern of retracing to a certain percentage above the start of the rally.

Gold has reached new all-time highs, potentially indicating a shift in investor sentiment and economic concerns.

Bitcoin's parabolic rise to new all-time highs may not be sustainable and could be followed by a significant correction, as seen in past cycles.

Real estate and related sectors like home builders and lumber may be facing a high-risk situation due to a potential downtrend in the housing market.

The strategy of focusing on one asset at a time, moving up in favor of risk tolerance, can help sidestep market weaknesses and capitalize on strengths.

Maintaining a portion of the portfolio in cash or short-term treasuries can provide stability and income while waiting for new market setups.

Transcripts

do markets have a have a pattern or a

habit of correcting to a certain level

or a certain percentage decline or to a

certain past key level here yeah yeah

they do there's there's um you know

Fibonacci Works in all kinds of ways we

can extend it higher so a Fibonacci

extension figure out the momentum to the

upside but we can also use a Fibonacci

retracement which is figuring out hey if

the market rolls over from here how much

energy how much selling pressure is

going to hit so we could look at the

market from a few different uh depending

on how how far back you want to go we

could look at the the rally we saw from

October of last year which would more or

less um you know I'll grab the SP 500

futures and if we were to pull that up

we can see how far this Market could

actually uh pull back over the next you

know maybe sometime over the next few

months um it's got potential to pull

back to roughly uh

$4,700 which is uh right into this

middle of this consolidation right here

it's kind of hard to see on this chart

but it's right here so the market likes

to pull back 38% of whatever the initial

rally was so 38% or 50% or 68 so this is

kind of that sweet spot where the market

likes to pull back what happens when an

asset reaches a market top should we buy

sell or hold what is the sell signal

let's talk about these topics with our

next guest Chris M Mulan Chief Market

strategist at thetechnicaltraders decom

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crypto returns Chris welcome back to the

show good to see you hey thanks David

always a pleasure uh everything's moving

up to new all-time highs stocks the

NASDAQ gold Bitcoin

what I don't remember last the last time

we had everything move up together to

new alltime highs was in 2020 um that I

can recall when the Fed was releasing

unlimited quantitative easing that's not

what's going on today there's no

unlimited QE in fact the FED is

initiating QT quantitative tightening to

the reverse people are talking about a f

pivot um cut so so you know uh cutting

rates later but that's that's later

that's not now my point is Chris what is

driving everything up at the same time

do you have a

theory yeah well to be honest I think I

would argue that I wouldn't say

everything is actually going up I I

think you you rhymed off the things that

are going up but if we peel it back and

and get away from just the NASDAQ the

the SP 500 which is super tech heavy if

if you look at the equal weighted sp500

it's really just come up to a double top

you look at the Russell 2000 it's

nowhere near all-time highs most sectors

are struggling so to me the market has

got this whole this this this you know

it it's masking what's really happening

most a lot of portfolios aren't doing

that well unless you are super tech

heavy and focusing on on the indexes the

big indexes themselves because we're

seeing the majority of sectors

floundering there they've had a rally

they've done well but they're not near

all-time highs so there's there's kind

of a mixed bag depending how you look at

it but really the markets have that Vibe

like they are hitting new all-time highs

um but those who are heavy into stocks

and smaller cap stocks are really

struggling they're not actually doing

all that well okay I do want to come

back to specific assets and markets so

we'll talk about gold today we'll talk

about the tech stocks we'll talk a

little bit about Bitcoin the dollar um

and any other trades are following but

just to come back to what you're saying

so yes the small caps have lagging some

people have told me that because they're

lagging now is a good time to buy the

laggers because eventually either the

large caps come down to meet the small

Caps or the small caps go up and meet

everything halfway so what's your take

is this a good buying opportunity for

the

Russell uh I I really I don't believe it

is I if I I'll show you the chart so if

we take a look at the uh the chart here

this is the Russell

2000 and more or less uh it kind of put

in a pretty major major top back in 2020

uh 2021 um right through that whole

window and it's broken down it has a

it's had a very nice rally we could

argue it's it's got a base uh and it it

might want to Rally higher but overall

it's at a major major resistance area I

believe this is still kind of more so um

last people moving into the stock market

as you and I are recording this we're

seeing the major indexes are down but

the Russell 2000 is up today and that I

think we're seeing the Russell 2000 is

the market is attracting a lot of small

aggressive Traders people who missed out

on the big moves people who haven't been

involved in the markets and I think

we're seeing them move back into a very

aggressive stocks we have been seeing

like the AR ETFs move up and and the

Russell 2000 they're all kind of moving

actually pretty much in sync together um

but but in the grand scheme of things I

think this Market is is is actually kind

of at resistance I think it's a false

kind of Rally or it's not one that's

supported for something really big

I I still believe we're in this stage

three topping phase and this is what the

the pattern of the Russell 2000 is doing

this is what a lot of different sectors

are doing and uh we're nowhere really

near the highs and and this is what

happens from an emotional standpoint

right now people are in this complacency

mode you just mentioned people think

it's it's an opportunity to buy they

think we're starting something new and

the market has put in a big base it's

held its ground the NASDAQ and sp500 are

hitting new all-time highs giving people

this false sense of oh the markets are

really strong but underneath if you peel

back the layers from those big uh big

indexes and take the seven big Tech comp

companies out of there the market is

struggling in a topping phase but it's

making people think hey the Market's

cooling off it's taking a breather this

is an opportunity to get in and it's

going to go higher and I believe it's

going to go the other way eventually now

don't get me wrong I'm long the markets

I'm strong I still think we're actually

going to Rally higher here for I think

several more weeks uh but but I do think

it it is getting very close to the end

it feels like the last people are just

little bit of money squeezing into this

market we've had a couple big days where

we've seen heavy heavy selling volume

across all asset classes so that to me

is a distribution day there's some big

funds out there starting to lighten

their portfolios because I think they

see the music kind of coming to an end

so that's how that's how I kind of see

the market at this point I think that's

the key you think there's going to be a

correction at some point but you're

still long there's still some juice to

be squeezed out I see this in the

comments in our prior interviews by the

way you know check out Chris's prior

interviews with me I'll put a few in the

link and in the links down in the

description below uh but people have

been asking is Chris bullish or bearish

like he sounds like he's both like what

what is his actual stance I think you're

shortterm bullish your longer term

bearish is

that yeah exactly and and this is what a

lot of people need to try to understand

because you and I are we talking on many

different levels and so my opinion what

I think what you and I are talking about

is is just my opinion I I'm bearish on

the market I think shortterm we're going

higher long term I think late this year

could be very very ugly for the stock

market um but just because I'm bearish

does not mean I am betting against this

Market again we are long we ride the

trend so there's a big difference

between what I say and think is going to

happen versus maybe the you know the PO

positions we actually have going on okay

and people who are perhaps new to your

work you know Follow Chris we'll talk

about your work in just a bit they might

think okay that just sounds like a

contradiction now can you explain that

thought process why would he be bearish

why would he think a certain way but do

the exact

opposite right so trying to time a

market as everyone knows is pretty

difficult it's a it's a pretty high

gamble so technical analysis which means

I follow price I follow Cycles sentiment

money flows all kinds of different

things technical analysis gives me the

insight to see what kind of power and

strength is behind certain moves and

everything in the stock market well in

the financial industry is linked in some

way it's called intermarket analysis so

if one asset class is going down it

could be gold could be uh stocks could

be whatever that money that's coming out

of that asset is going to be flowing

into another asset so um depending where

money is Flowing between all of these

assets we can get an idea as majority of

money coming out of say the stock market

and flowing into a bunch of defensive

sectors or Commodities like gold things

like that um and so the nice thing about

technical analysis is we follow Trends

we we we can identify when something's

going up down or sideways and if we want

to take advantage of that asset we

follow we jump on and we follow that

Trend now we might be long the markets

which we've been long since November and

we're deep in the money and I feel like

we're getting real close to a top but

we're not going to get out of a trade

just because we think um the Market's

going to top out and the technicals are

slowly starting to weaken telling us hey

we're getting closer but we never jump

ship until the ship actually turns a

corner once it's turned then we get off

and go okay it is actually going down

let's get off so you know we don't ever

try to pick a top or a bottom uh that

becomes a very painful game especially

if the market keeps going up like right

now a lot of people try and pick a top

they get out they think it's done it

just keeps going higher and then they

get left behind so we're more of a trend

following strategy and have a very good

way to identify when that trend is

breaking down through a lot of different

layers of analysis can we um take a

stock and illustrate that point using an

actual chart let's take Nvidia for

example it's breaking headlines making

the news it's consistently it's a stock

that's consistently defied not just

gravity but also expectations for their

earnings um the sales numbers are going

through the roof um they're just they've

just come out with a new chip and the

point I'm trying to make is that the

company may have solid fundamentals to

back this chart pattern but despite even

what may seem like solid fundamentals

you you're a charter you take a look at

what's going on or what has happened in

the last four weeks and you might think

to yourself that looks strange would you

you know if I were in would I should I

be taking profits should I be cutting my

should I be cutting my losses if I were

short you know a lot of questions might

come into your mind looking at that

chart what are some questions you have

as a Trader just looking at that chart

what would you like to learn a bit more

or what more information would you need

to gather about that particular stock

before you either make a sell or buy or

hold decision so let's all right so if

we take a look at the daily chart of

Nvidia and we look at this this big

rally that really took place from mid uh

2022 I like to use Fibonacci extension I

find this is one of the most powerful

tools for identifying how much momentum

how much upside potential is in a trade

and so if we were to take this low and

go up to this high that we saw in 2023

and come down to this low and carry it

forward it gives us an idea of where

this Market should run to and um you and

I I think talked about this a while back

long story short is if the market

rallies up to this Orange Line the 618

and it has a little bit of a pause we

almost always see it rally up to the

100% measured move and how that all that

how that works really is just based on

the strength that it took in this first

run if this continues this chart pattern

it should have the same strength to run

that same amount to the upside and this

is a very large chart pattern the fact

that we hit that once we go beyond it

we're kind of in in shortterm kind of

kind of bubble phase now nvidia's got a

really good story I mean they're kind of

leading in the AI space they have a new

chip I mean the AI space it has moved a

lot in the last year it's in everything

in fact I think you might have saw a

flash of of this image here uh a minute

ago on my screen like AI is now in

toothbrushes like like where is it going

to end but all this stuff all this AI

stuff most of it now to me is really

just that must be a marketing gimmick I

mean what

Ai and toothbrushes what what what is it

going to do figure out your brush

pattern and then like adjust it

sensitivity like what is it and this is

what I mean like AI is now getting

squished into everything as a marketing

tool we're really but we're really just

scratching the service I'm going to look

that up or be with AI I'm going to look

that up later any exactly but AI has got

so much room to go in the in the film

industry and every industry like we're

really just tip of the iceberg so

there's a lot of you know uh

fundamentally Nvidia or even anything in

the AI space fundamentally his this

Market is just starting I mean it's

going to be absolutely massive so there

could be one sector that bucks say a

much larger market correction and that's

probably going to be the AI space

because it's really like infinite at at

this point in my mind of how far ai ai

can actually go but you wanted to know

what would I KN need right now to take

advantage of this trade so we could look

at a couple different things here on

this chart say for example like right

now it's starting to look pretty strong

it is coming up you could you could

argue this is a bit of a double top but

if we take a look at this last run that

really broke down from this low pre-

earnings we had a run up I'm using

Fibonacci extension here I'm going to

Mark the high and then Mark this low

this is going to tell us where the next

upside targets are for NVIDIA and that

is the 100 or the 1025 Mark and then the

1130 uh 39 Mark so there's another

fairly easy potentially 20% upside in

Nvidia and I've been kind of picturing

this in my head for a while that we're

going to see this one final push kind of

going into May or near may just because

seasonality wise is when we usually see

the market start to stall out uh and

people are really going to Pile in like

hearing Nvidia break to new highs uh and

and this push for some reason I feel

like people are Super Hyper sensitive to

it and they're going to Pile in and

we're going to see the stock market and

and potentially the Russell 2000 really

kind of pop and squeeze higher and

really get a lot of people involved and

then this summer people are going to be

shaking their heads when things start to

potentially plummet and uh they'll be

like I can't be believe I just bought

into this euphoric hype where I thought

I was going to like you know nail it so

the the the adage uh by a man go away is

there any truth to that speaking of

seasonality yeah there there is I mean

if we if we take a look at an average of

the last 30 years of the SP 500

typically after May so pretty much

starting in June the market wants to go

sideways or lower into the end of the

year in fact if you were to Overlay the

SP 500 chart on this from last year just

locking up last year's price action it's

exactly like this like almost to the te

so it is it is pretty powerful I

wouldn't use it for trading I would use

a real strategy this is just um it's

just interesting to have a bias of okay

you know we might be stalling out I like

to be mentally prepared for what could

happen so that when trades happen and

stops get hit or Trend reverses I'll be

like well I kind of knew that was likely

to come it's not going to be a shocker

it's when people are shocked and

something happens faster than they

expected they don't want to get out of

that trade and it usually costs them

because they kind of have analysis

paralysis and they're kind of just not

ready for it so being mentally prepared

is to me is one of the biggest parts of

trading um when for the next question

perhaps you'll need to pull up a chart

to illustrate your point but um when a

compl when the complacency phase is over

Chris and the market does eventually

start correcting whether it be a market

or just an individual stock or security

uh do we have any indication or um or

evidence from the past as to how far

that correction could go in other words

do markets have a have a pattern or a

habit of correcting to a certain level

or a certain percentage decline or to a

certain past key level here yeah yeah

they do there's there's um you you know

Fibonacci Works in all kinds of ways we

can extend it higher so a Fibonacci

extension figure out the momentum to the

upside but we can also use a Fibonacci

retracement which is figuring out hey if

the market rolls over from here how much

energy how much selling pressure is

going to hit so we could look at the

market from a few different uh depending

on how how far back you want to go we

could look at the the rally we saw from

October of last year which would more or

less um you know I'll grab the SP 500

futures and if we were to pull that up

we can see how far this Market could

actually uh pull back over the next you

know maybe sometime over the next few

months um it's got potential to pull

back to roughly

$4,700 which is uh right into this

middle of this consolidation right here

it's kind of hard to see on this chart

but it's right here so the market likes

to pull back 38% of whatever the initial

rally was so 38% or 50% or 68 so this is

kind of that sweet spot where the Market

likes to pull back but if we were to go

all the way back to the covid lows it'll

give us a much bigger picture of of

where those levels are and that brings

us all the way back down to more or less

um

$3,750 uh down to you know $3500 which

is right back down to those lows in 2022

and that's just that's just a typical

that's just a I mean that's just a a

correction that's I mean that's a big

correction percentage wise that is

roughly at this point I mean we're

looking at a 29

you know 30% pullback and to me that's

really just potentially the start of

something I think that could be more or

less a topping phase a bare Market phase

just starting and then we potentially

break down and go lower so I mean I've

been talking very bearish for a long

time on the market and it keeps going up

it's more so I'm trying to be mentally

prepared and let people realize hey

there is going to be Devastation and

it's way better to be prepared and and

on your game and uh managing positions

than to be caught off guard so um on

that note I think the key here is that

it it'll retrace to a certain percentage

uh above the start of the rally you

didn't say it's going to retrace to a

certain percentage from the top whatever

that top may be right so I think what

people have to be cognizant of is that

the higher where the the higher this

markets go the the more pronounced the

rally then the larger the correction

correct yeah yeah okay that makes sense

well let's take a look at something that

has reached new alltime highs a couple

of things gold first of all um reached

2200 not too long ago we at 2174 today

as we speak and I have to point out that

um on your in your chart showing the

phases in the complacency phase things

in that well from that particular chart

illustrating the example things don't

usually breach a the prior alltime high

right because you can see they just it

just I I I know that's just for

illustration purposes but um for the

complacency phase you don't see a new

high so can you say that gold is in a

different

phase yeah for sure T typically when we

get really close to the end of a major

stock market and more so economic cycle

we see we see energy stocks we usually

see crude oil energy come to life which

we energy stocks have been on fire over

the last couple of months um we you tend

to see gold silver and miners come to

life and they have gold has already come

to life it's a little more stable but

we're seeing Miners and silver big money

flows are starting to rotate into them

they're moving up um so I I would put

the precious metals in a bit different

space in a really I would say they're in

a they're in a well gold is more so in a

bullish space uh M Miners and silver are

still struggling but if we were to look

at the monthly chart and go back so we

had a um uh back over here we had a

month multi kind of like a multi-year

consolidation and then we saw Gold

Silver and miners rally up really well

they were in a bull market phase which

gold is in a bull market right now um

until the stock market topped and so as

the stock market was starting to stall

out sectors were were failing very

similar to what we we're having now um

gold did well but then gold corrected

with the bare Market well we've had a

multi-year consolidation and gold now is

is it's rallying it's pushing to new

all-time highs because I think a lot of

people investors see economic weakness

they see they're they're worried about

currencies they're worried about all

kinds of different things things and

people are moving into this space I

think it's just starting I think Gold

Silver and miners have some pretty good

room to run still over the next couple

of months and I think it's one of these

warning signs that we are slowly getting

closer to the end of this kind of

economic cycle and we're going to see a

bit of a reset so you don't think gold

is a uh is overbought compared to Silver

in the

miners no I I I I mean to me gold is

actually much stronger play it's in a

uptrend it's breaking to new all-time

highs with no overhead Supply it's seen

more as an investment people who buy it

are are everywhere around the world and

they buy it and they usually keep it um

silver and miners are more speculative

so they get you know pumped and dumped

and and dropped and you know they get

people get shaken out because they move

percentage wise a lot but to me gold is

is is more solid and it holds its ground

better and it's in a it's in a bull

market whereas the precious metal Miners

and silver are struggling they're just

starting to come to life they haven't

really broken out yet okay

uh can you say the same thing about

Bitcoin is that in new A Renewed bull

market I mean bitcoin's been ring ever

since last year so I'm wondering if this

is oh everyone's wondering not just me

everyone's wondering if this is just the

continuation of the momentum upwards or

are we about to see a top or correction

do we necessarily need to have a

correction uh once a new high has been

breached generally speaking what's your

take on bitcoin yeah I mean I'm I'm not

a fan of things that go very parabolic

things things that go straight up with

these these very strong bars I'm I'm not

a fan because it means everybody's

crowding into it at the same time um the

best chart is one that goes literally

across your chart on like a 45 degree

angle it can do that forever it can just

keep going up it has enough of a little

bit of a pause and pull back to reset

and keep going but something that goes

straight up usually Fizzles out and all

those people that chased and piled in

because they were emotional they had

fomo they have to get in they they want

to make sure they catch it well when it

starts to roll over they also have fear

of losing money more money so they bail

out and it comes right back down so I

consider very strong rallies like these

to be um to me they're more like

fear-based rallies fomo squeezes them up

and then fear of losing money gets

drives it right back down again as they

all just jump ship and give up um so I'm

not a fan like yes Bitcoin is in a very

strong uptrend it's got new all-time

highs it could keep going

um but again I'm I'm not a fan of

something that is ripping kind of

straight up two months you know back to

back uh it usually ends abruptly put it

that way what's interesting is that in

the prior bull cycles for Bitcoin every

time it's breached a new alltime high

it's immediately or almost immediately

retraced or saw a major correction not

saying it's not going to reach new

alltime highs I mean clearly it has but

um it's just in the past just just like

2021 uh double top both times has

breached a previous high it's come down

so if you were to assume history repeats

itself can you make the same assumption

again which is that it's about to

correct or it's about to see a major

some sort of major

pullback yeah I yeah that's true I mean

Fibonacci the way the markets like to

move is it new new Highs are always

wanted to be reached and new lows are

always wanted to re be reached it's just

the way the markets move and it's it's a

way to for example we have this high

right here and then suddenly we broke it

and uh it ended up running higher you

know the next month but by the end of

that month it's sold off and what it

does is when you hit a new high it's

everybody who is short gets squeezed out

they're like oh I do not want to hold

this it's like it's rocketing higher so

they get out and as they cover their

shorts it makes it creates more buying

pressure it goes up and then there's a

ton of people who see that quick sharp

move and they have to Pile in because

they're missing out on the next rally um

and then that's usually when there's a

lot of people buying buying into it we

we tend to see the big players say I got

to unload into this and then they unload

into the selling pressure they they kind

of get out and then all the emotional

Traders start to follow suit and bail

out after that but it's just the way the

markets move you'll notice the market

likes to just poke to it I call it it's

a nominal new high just high enough to

get the shorts out and get anybody who's

not in who who's been wanting to get in

in because they're now going to have

fomo so I'm not a fan of something goes

straight up hits a a nominal new high

you know next month could be a blood

bath it could be a very strong red

candle it could easily come back down to

50

$40,000 I mean that's just what this

this chart has done and and at this

point you know it's to me I think it's

more likely than it is it to keep going

straight up uh that's that's interesting

and important okay thank you anything

else you're watching uh or trading that

you have high conviction of either way

either bullish or very bearish on I mean

we're we're along the indexes I we're

along some leverage on the sp500 and the

NASDAQ um you know I'm getting excited

for potentially a US dollar trade um

when we look at the monthly chart of the

US dollar it's slowly building a base

now there's an ETF for that which is

uup um but right now I'm really just

interested in the indexes I find the

sectors are all over the place and I'm

not a fan of the sectors just because

they're super volatile they they can

perform really well for a couple weeks

and then they can perform really poorly

a perfect example of that is actually

the um uh the marijuana ETF it went from

the worst asset on our list of worst

asset in the whole pile of sectors to

the best one which it is now and it went

all the way back to the worst and now

it's back to the best and it just has

these percentage moves and when sectors

are all over the place like that which

I've seen a lot over the past year and a

half um it's just a difficult space

trying to pick sectors and jump around

so so I like to just focus on the stock

market it's like the tide if the Tide's

going up you know most it raises most

boats so I just jump in i r play the

tide with an index plate at this point

it's the easier safer money and if you

want you can use leverage to get more

movement out of it I think when we start

a a brand new Raging Bull market like a

stage two which whenever that happens I

don't believe we're in it yet um that

then sectors and stocks become very very

exciting again but right now index to me

is the safer easy way to pull money out

of the market confidently comfortably

and not take on too much risk uh so

you're right um my opening statement was

technically incorrect not everything's

going up I I was exaggerating uh but one

thing that hasn't been going up to new

highs is actually um if you take a look

at certain real estate ETFs this there's

a lot of them out there for uh various

compositions so we can't make a

generalization but I'm just taking a

look at bnq which is a Vanguard real

estate have one of the largest uh

they've got a mix of a lot of different

stuff in there um are you surprised that

real estate as a as an asset class

hasn't been I guess outperforming the

stocks this

year Well real estate struggling I am

not I've been bearish on real estate for

quite a while I I think it's going to

get beat up pretty hard I I think the I

think the average investor or the the

basic real estate investor who's trying

to just get into the space and buy a

duplex or put in a you know accessory

apartment or something like that they're

all super bullish on the markets but the

reality is real estate is is softening

huge I know people with subdivisions who

are working with people subdivision

people are backing out they're breaching

contracts they do not want to walk into

this um prices are dropping in a lot of

places and and we can see that here on

on this now um if we take a look at for

example um H what is it um the home

builders H xhb here if we take a look at

this this is the Home Builders and this

is be people are piling into the home

builder stocks because they think we're

going to start another housing bubble

and so to me people are moving in

thinking the housing market is amazing

which I believe it's complete opposite I

think it's maximum risk and I think

these home builders are going to get

really really hit because they're going

to realize holy we're building all these

homes now we got to sell them try to

sell them and we got to give them away

and um people are going to be stuck and

it's the same with we can take a look at

people are piling into the wood industry

the lumber the wood ETF um we we've seen

in the last little bit it's actually had

a very strong run people are moving into

the the wood industry um just as much as

the home builders over the last little

bit but when we step back just like the

real estate chart that you had me pull

up there we're really seeing the lumber

industry is really at resistance and I

think in the grand scheme of things soon

as housing really kicks in and slows

down we're probably going to see lumber

prices fall the lumber companies are

going to suffer dramatically um so a lot

of charts this this is what a lot of

sectors look like they put in a major

top in 21 22 they're putting in this

this rounding bottom and or kind of base

or this bare flag really and they're all

stuck under this resistance so I believe

we're very close to a bigger leg down

and and real estate there's going to be

a lot of people caught off guard in real

estate I had lunch with somebody not

that long ago and they're like you know

super gung-ho they're looking to buy

everything they can and they think real

estate is this is a perfect time to buy

and to me it's the complacency I'm like

just because it's paused and starting to

weaken doesn't mean it's an opportunity

it could actually mean we're starting a

big downtrend but they don't see that

they just say I need to get more

properties and I think it's a highrisk

play we have a few minutes left I want

to talk a little bit about your service

first of all how much cash do you have

right now you said you're mostly long

the indices so I'm guessing not a lot of

cash relative to your overall position

we're we're 50% we're 50% in in cash

right now for those of us watching right

now who are not familiar with um Chris's

work I mean he's been on the show

several times at at various points

you've been either 100% in cash or 100%

in markets now you're

50/50 um if you were to summarize in one

or two sentences what your sentiment is

towards the markets you know why what

what is your sentiment and how does that

reflect in your cash

position right so long story short is we

were 100% invested in the stock market

uh half in the SP 500 half in the NASDAQ

we've got this beautiful Rally from the

November lows uh no November rally uh

last year and we've we've hit all all of

our key targets uh and usually

statistically when the market has done

what it has done we recently got out of

half half of the position uh the stock

market goes in into a pretty big

correction a multi-week multi-month

correction and uh so our strategy is

simply saying hey we've reached all of

our targets um the techn believe it or

not the technicals on the NASDAQ have

told us to get out and so we got out of

the N have you been taking profits on

the way up yeah

yeah yeah we we scale out on targets but

we're having a great year I mean we're

up like you know 10% on the year which

is actually outperforming the market

which is pretty pretty amazing oh

congrats and uh summarize your strategy

for us in uh in 90 seconds or less for

those of us who are just learning about

you super high level I focus on uh a

strategy what I call is asset Reves we

own one asset at a time so one ETF the

stock market is one asset you know it

doesn't matter how many stocks you own

equities is an asset bonds is one asset

a currency like the dollar Index is one

asset we only own one asset that is

moving up in favor of our risk tolerance

and right now we are in the stock market

because it's favorable it has the most

potential uh we also have half our

portfolio in B which is a um short-term

treasury note so we earn daily interest

in and monthly dividends for the other

Port portion of our cash until we get a

new setup so we just focus on only

holding the asset an asset that's going

up we don't hold anything going down or

sideways and um allows us to sidestep

the market when it's not strong and only

own the best assets uh when the Market's

moving well I'll put the link to your uh

to your website and your service down

below uh go click on the link to learn

more about Chris's uh asset Reves

strategy and of course there's prior

interviews I've done with Chris that

I'll also put in the description down

below we've talked about his strategy um

at length in some of these prior

interviews so check them out and uh

we'll go into a bit more detail next

time as well but I want to do a quick

market update uh for those of us

following the markets are wondering why

the things we spoke about not everything

but the things we spoke about are just

going through the roof so thanks for

that update um great great to see you

Chris we'll see you again soon yeah

thanks David take care take care and

thank you for watching don't forget to

like And subscribe and follow Chris in

the link down

below