Talking Points From This Episode- Uncertainty in the equity markets and sector performance.- Dangers around chasing news and public interest.- Expectations for the dollar, gold and silver.- Outlook for energy and expectations for Bitcoin.
Time Stamp References:0:00 - Introduction0:32 - Market Leaders3:29 - Commodity Cycle5:20 - News Events6:47 - Smart Money9:26 - Sector Relationships11:24 - Volatility & VIX14:14 - Metals & Miners15:37 - Dollar Pop19:41 - Gold Charts21:43 - Behavior & Algos22:39 - Silver Chart25:58 - Basel III26:57 - GDX Outlook31:00 - Energy34:10 - Bitcoin & Bubbles39:40 - Bubble Indicators41:40 - Wrap Up
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Tom welcomes Chris, founder of Technical Traders, back to the show. Chris discusses how we see sector rotation and sideways action in the stock market this year. We're waiting on which sectors will move next, and the direction of the market is currently uncertain. We may be in a summer doldrum period.
When commodity markets begin to move in a serious way, that is often an indication that the equity markets are nearing a top. There could still, however, be a blow-off top in the equities.
Significant moves involving the public and based on the news are often quite dangerous. This is because the public tends to push the price on the information too fast and too quickly. The result is a crash in that equity as its price corrects. This is why it can be hazardous trading around the news.
Chris believes that smart money is now reallocating due to overall market uncertainty. As a result, we see flows into the bond markets. In addition, transportation is showing weakness due to a slowing economy and lack of orders.
Chris discusses the dollar and why he is waiting for it to briefly rally and a severe subsequent sell-off. He expects the metals and miners will go ballistic when this occurs. As a result, finding metals anywhere near spot prices may soon be very difficult.
Silver is showing relative strength, and it's likely to outperform in the next rally. It has some serious resistance, but it will head for $34 fairly quickly once it breaks out.
Chris outlines where the GDX is likely to head and notes there is excellent momentum to the upside. Over the coming weeks, he anticipates the miners heading higher.
Lastly, Chris discusses the energy markets and why he expects a continued rally for crude. He also touches on bitcoin and discusses what indicators to watch in bubble markets.
Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic.