How The Mother Of All Market Rallies Would End | Chris Vermeulen
Summary
TLDRIn 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
📈 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.
📊 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.
🤔 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.
📈 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.
📉 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.
🚀 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.
🏠 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.
Mindmap
Keywords
💡Market Correction
💡Fibonacci Retracement
💡Asset Allocation
💡Technical Analysis
💡Market Sentiment
💡Sector Performance
💡Real Estate Market
💡Stock Market Indices
💡Complacency
💡Trend Following
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
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