Silver Explosion Ahead? Gold Pullback & Stock Market Melt-Up | Chris Vermeulen

Hello again from your friends at Sprott Money, SprottMoney.com. We are now into the month of June, and it promises to be a rather volatile headline driven month. At least that's how it's starting. Who knows how it's going to end. And we're going to be here for you all month with all sorts of content on this channel, wherever you're watching it. So keep an eye on it as we make our way through the month. As we begin the month though, we started out how we always started out with our good friend Chris Vermeulen of The Technical Traders to walk us through the technicals of the market. I'm Craig Hempke to kind of facilitate the discussion. Chris, good to see you. Hey, good to see you, Craig. Always a pleasure. It is always a pleasure. And boy, it's going to be an interesting month. As we get things started, just make sure you make a mental note. If there are some dips and you plan on buying the dip, be sure to visit SprottMoney.com. Always the best deals you're going to find on precious metals, storing safely and securely that precious metal. They can help you with that too. They're always just a click or a phone call away at 888-861-0775. There's my friend, Chris, picking up the ball and running with it, showing you what that site looks like and that phone number right up there in the upper right. All right. So, we try to do this every month to start the month. The month, like I said, it's probably going to be pretty volatile, be driven by headlines, geopolitics. We've got Kevin Warsh's first FOMC meeting in two weeks. It'll be the first FOMC meeting in eight years that wasn't run by Jerry Powell. So, we'll see how that fits in as the month goes along. But we're not here to talk fundamentals or headlines or anything like that. This is always a discussion of purely the technicals. What do we see? What are the charts telling us? And that's where Chris excels, again, at TheTechnicalTraders.com. Chris, you're watching this stuff every day for yourself and for all your customers. I think on top of most everyone's mind is not necessarily the precious metals at this point. They're still slightly green on the year, but what is a dark flashing green is the stock market here in the US. Why don't we begin there? It's been just a ferocious rally from the lows back around the 1st of April. You've got the chart right there. I think what's that, the NASDAQ? Yeah. Tell us what you see. Yeah. Well, I mean, I think it's pretty obvious we're in a bullish market, we're in a strong uptrend. Technology is just screaming higher today as you and I are talking, which is the 1st of the month. We've got the NASDAQ and the S&P 500 are positive, the NASDAQ specifically. The rest of the market is down very sharply, and this just goes to show how strong the tech and how big the tech space is. It is dragging the stock indices higher. We have got small caps and utilities and consumer stable. All the other sectors are down actually pretty sharply. Most of them 1% or more, but one sector tech is doing pretty much all the heavy lifting. So there's no doubt it's a bit of a warning sign when one sector is doing all the heavy lifting, but it is such a big group. I mean, it's going to keep dragging the market. You can't fight this. And when we look at this trend, we can look at it from a 30-minute chart here on the left-hand side all the way down to these lime green lows here on this chart. This was back right at the beginning of May. We kind of had this, or not the beginning of May, but on May 19th, we had this pivot low. The market got short-term oversold, and it has just screamed higher ever since. And that low, if we were to carry that over on the daily chart just to see, it's this low right here. So we've seen this very strong move up. The market is doing exactly what it does when it's in a bull market. It gets short-term oversold, creates these lime green oversold market conditions, and then bargain hunters step back in, accumulate shares, and drive it higher. And so, I mean, we're just riding this market higher, that NASDAQ and the S&P 500. And we just have to be aware that at any point there could be some bad piece of news in the tech space, and it's going to hit the NASDAQ fairly hard. But overall, I mean, the market just continues to ramp higher. And we are starting to see, Craig, when we look at the RSP ETF, now this is the equal-weighted S&P 500. So if I zoom out, it doesn't quite look the same as the NASDAQ and the S&P 500, because it's taken out a lot of that technology weighting in there. And what's interesting is we had this pullback, put in a little bull flag or a handle, and it broke out over the past week. So we are seeing a little bit more broad market movement, meaning it's not just tech. We are starting to see some other stocks, the majority of stocks, just starting to come to life. And so that is a bullish sign that it's not just one sector doing it all, it's the rest of the market is now starting to move higher with excitement. And we can see this. Money's piling into, has been moving into small caps, has been moving into micro caps, like IWC, this is a micro cap ETF. You can see there's a big wave of volume of a lot of people that are very excited in micro caps. And I can see this in those stocks. A lot of these companies, the shares have been popping and taking off, and that's speculative. People are getting excited, right? Back to that, maybe the NASDAQ chart or that equal-weighted chart, maybe that'd be a good one to go back to, Chris. I look at that as just a regular guy, and I see that breaking out, a couple of attempts to go up to that level there. If someone to just kind of follow this on their own, would you expect that to kind of pull back and test that old area of support? And then if it goes higher, that's something to be excited about. If it breaks back down, that might be a warning sign. How would you look at that? If it pulls back to test it, that pullback could be bought. Ideally, it really just wants to keep running. If we were to look at this momentum, when you look at the previous leg, whatever this previous run-up was, you kind of want that to be mirrored on the second leg. If it does pull back, it means actually it's not as strong as a move. As a technical trader, when you look at this rally up and then price flags sideways, this creates a bull flag. The next leg starting up should try to mirror this. I would kind of like to think this breakout and pause, this first run, is kind of like this one here and right here. Ideally, this is broken out. This is a big bull flag chart pattern, and we should hopefully see this actually just continue to pop and run higher. If we use a Fibonacci extension, we can actually gauge where those resistance levels are going to be based on the move. Here is telling us we should see RSP, the equal-weighted stock market, based on the current price at 208. It should actually run up to about 217. It's about a 4% move. It's not huge. This is a bit slower moving of an index, but that's where it should run. Ideally, this should just be a pause, and it should continue to pop. If it pulls back, I'll be a little more nervous that the overall market isn't as strong as it should be. Right now, we've got the NASDAQ breaking out and really starting to run. Again, if we go back to the NASDAQ, it just broke out from this high, and it is showing signs that it wants to keep melting up. We are in a crazy melt-up. Look at Micron, the memory sector. Please go to that, pull up Micron, because that was the next thing I was going to ask you about, Chris. We get something like silver last year, it goes up 3x, and everybody loses their mind and talks about, oh, it's this huge, massive bubble, and it has to go down, and all this stuff. Of course, we know what happened since the end of January, but what about that? Maybe you have to be some kind of addicted gambler to want to trade that, but how do you trade something like that? That's crazy what it's done. I know, and this is what makes trading and investing so difficult. Something this big naturally lures you in, it's like, how do you trade it? Because we want to trade it, right? I mean, it's really difficult getting in on something like this, you're literally just riding like a rocket ship. You know when you're a kid, maybe there's those rocket ships with those little fuel cells that shoot straight up, and their little parachute pops out, and they come back down? You got to be aware. When something goes like this, parabolic, you just don't know when it's going to run out of fuel. When it does, it's going to be a big red bar. I always like to kind of zoom out, go to maybe a weekly chart and get a bigger view. This move, there's no doubt. Let's just go way back in time and see if there's ... Out of curiosity, what was this? Dude, I was a stockbroker 30 years ago. I remember Micron. The thing is crazy. Yeah. I mean, these are all huge moves, thousands of percent. There's no doubt it could keep going, right? I think ... I mean, that's the nice thing about owning the broad market, like the NASDAQ and the S&P 500, is you don't get this type of return, but at least you're like, I got a piece of this. I think a lot of people who are trying to get in and chase this, I mean, it's scary. This could reverse at any point. I feel like there's so much good news and things going on in the AI space that we're just waiting for one, something to break, something to buckle in the AI space, and we're going to see a very quick unwinding and a lot of positions reset. I mean, we're still ... Memory is going to be needed more and more. The better the AIs get, the more memory they need, and the faster they're going to need it. So Micron, this still could be like the infant stage for it, but it's just ... It really is an unbelievable move, almost, of just how powerful all these companies are that support AI. Everybody's buying into the AI companies, but it's the little parts needed to create the memories, all the stuff to make AI work is where they're really the bottlenecks. Those are the ones taking off. I'm thinking about changing the name of my website to tfmetalreport.ai. Do you think that would help drive the ... Yeah. Really remarkable stuff. Well, did you ... I don't know if you and I talked about it. There was a company called Bird Company or something. It was traded. It was traded on the NASDAQ. This only happened a couple months ago. It was a shoe company, Bird, and anyways, it went all the way down and it ended up going to almost zero dollars. It was like at $20 at some point. Then they changed the name to Bird AI. They threw AI on it and it shot up like 800% in four or five days because everybody thought it was an AI ... They're getting into AI, but they have no computers, no technologists or anything. They just switched the name. I don't remember exactly what the ... Something like ... Remember the Long Island Iced Tea dot blockchain or something like that? Remember that one? I don't remember that one. That was a couple of years ago when blockchain was all the rage. Anyway, I digress, but you can see what's happened since. Yeah, from $2 to $24 because they changed to AI. It just goes to show we're in a feeding frenzy. This just comes back to the AI, the memory space. We are in a phase here where eventually we're going to run out of momentum, but the question is where's the top? You can't pick it. You got to just ride this and wait for it to happen. I'm going to segue that into silver because that's where we're going to hear talk about now next. Again, yeah, that was a great run in silver with a lot of interesting fundamental things going on in the background. Everybody piling in, blah, blah, blah, and yeah, way to win. Then you got the big red candle that you're talking about with Micron that it's probably an eventuality. It's just a matter of when and then what happens after that. Now, I look at that chart, Chris, again, I'm just a dope with a MacBook, and I see it's still above its 200-day moving average. I mean, it's below many of the others, but maybe more importantly on the long-term chart, Chris, in my lifetime, it's gone to 50 three times. The previous two times, it immediately went back to 20 or lower. This time, it went to 50 in October, and we're still 50% above that, it's 75. What do you think? You look at that chart, is this ... Well, I'll just be quiet. That's the end of my question. What do you think? Yeah, I mean, it's difficult because it has mixed signals. So this is the weekly chart. I'll just go back to the daily. So when something has mixed signals, you really just have to let the asset mature, let it work itself out. Time will kind of work that out. So when we look at this, we got the green moving average, that's the 150-day moving average, which most people use the 200-day, I like the 150. It's sloping up. So it has long-term, the trend is going up. Short-term though, the trend is actually more so coming down or trading relatively flat. You know, when you zoom out on the chart, you could say, hey, this is a huge bull flag. Next move, next stop for silver, technically, based on this chart, is actually $175 per ounce. So there's a lot of potential. If silver hooks up and gets traction here over the next couple weeks or months, as long as it doesn't break this low, silver, next target is $175. So that's really exciting. The short-term chart points to kind of a bit of a dramatic opposite direction, which is actually all the way down to about 40. It actually is $39 per ounce is the next wave down, which would be, to me, would be a final – Yeah. So if we take a look – How did it come up with 40? Sure. Yeah. So Fibonacci extension gives us this. So we have this initial ride down, and then we have the bounce, and then we just carry this forward. And so the way Fibonacci works, I only use two levels. I use the 6-1-8 extension, which is the golden ratio, and I use the 100% measured move. So based on this drop and then based on the reaction bounce, the way this particular setup works and how I teach it and use it is usually you're going to come down, and if you hit the 6-1-8 and you take a pause, you almost always come down and hit the 100% measured move. And so that is the downward momentum is pointing to $40 per ounce, which will obviously cleanse the market. A lot of people will bail out. Cleanse more than that, let me tell you. And so that's what the downside. But I mean, we can go and look at the upside for silver, depending on how far we want to go back. Well, hold on. Let me stop you again. Sure. Because I remember on the way up, we were always talking about that 6-1-8 line. And it'd be like, well, if it gets through there, it's going to make that 100% measured move. And you were repeatedly correct. Yeah. Like, well, this now signals this level, now this, and bang, bang, bang, and it worked almost every time. So that 6-1-8 to me looks like it's right there at the early February and mid-March lows. Is that about right? Yeah. So would that be... We start taking those out and trading down to 60, that's when it's like, oh, okay, here comes 40. Yeah. Okay. And it'll... I mean, this isn't what you want to hear, most people, but I think this is an amazing opportunity. Like, I mean, keep in mind, I did sell my silver at 111. I sold my gold at like 5,100. I mean, I do want metals to fall because I want to pick it up at one of these reactionary measured move lows. And I think this is only a temporary... If you're a long-term gold investor, who gives a... Yeah, but five more. This is the best thing that could happen because if we hit our Fibonacci targets on the way up and then it falls and creates a retracement pullback, this is like a very good... This is an A, B, C correction within a huge super cycle in gold. This level here is a measured move. If it gets back down here, this is like back the truck up and pick up a ton of physical metals because this should go higher for probably the next 10 years after that. And so that's the way I see it. My only concern is we see metals trade sideways for several years. For some reason, it just doesn't get traction. And I just don't want my money stuck in a metal that's costing money to store versus something generating dividends and returns and interest and all that stuff. I think this is a great opportunity. I think if you're a long-term investor, you just turn a blind eye like you always do. If you do the buy and hold, you turn a blind eye, let this thing do what it's going to do. You still have faith. I mean, silver's had a big correction, but it still doesn't change the underlying story for metals. I mean, the story for metals is they should keep going higher and take off and become the dominant currency, I think. So there's still good stuff. I think just short-term wise, we just need to be aware that, hey, there could be a flush down, which is actually just an opportunity to add more because I think it'll rebound and take off for a long time after that. So Chris, that 618 level for people to watch, we want to call that 63, 65, something like that? Yeah. 62 or 60 area. It's just an area, right? There's no precision numbers. Right. All right. For our last chart, let's do that with gold. Sure. Which is flirting with that 200 day. It's probably below its 150. What are we looking at there? Yeah. So gold has a slightly different chart pattern. Silver initially had the Fibonacci drawn from this drop and the bounce, which actually we had done. Once we saw this bounce take place, we actually have that move and it tells us where price was supposed to go. So we did see gold complete its first move. It sold all the way off. It then had the bounce, and then it came all the way down to this 100% measured move. And of course it pierced through it because these aren't specific levels. It's just the zone. So gold hit that move, but now it has, because it's hit that move and it's had a bounce, we can now actually redraw the more current price action. So if we were to take a look at where gold is, the new move is actually this high based on this sell-off and then this bounce. And we'll just drag that forward. And it tells us where gold should roughly go. And it's saying gold should drop to about 4,100 and then potentially plummet down to about 3,600. And both of these prices for this price for gold at 3,600 and that $40 gold price for silver are both like in the same spot. Both metals had paused and it's right where they started these parabolic moves. And so the parabolic moves, the way the market is very efficient, what it does is once we get into a parabolic move, like in micron where everybody's just piling in, if there's easy money to be made, if you make a lot of money fast, you better be aware because it can get taken away very quickly. The market loves to punish people who chase money, who are just going for pure returns or pure excitement. Whatever the reasons are, it's usually a blend of both. And so both of these charts are saying, hey, if you got in late and you just bought near these highs and when it was screaming higher, we're going to put you under some pressure. We're going to see if we can break you and get you out of this asset before we stabilize and start the next run up. And so that's what is happening here. Everybody who got in late is now getting put to the test and they're going to realize, oh man, I bought high and they're going to eventually panic and sell out low. And then they're going to hate the commodity for a long time and it's going to take off without them. This is what happens across the board over and over again with emotional traders who don't have a strategy, who don't understand these cycles and how the market works, right? So short term, I'm neutral and I have a bearish bias. I'd love to see metals go down, but because we have a long-term uptrend in both gold and silver and the short-term trends are both down, we have this mixed signal, right? So they're neutral. And all I'm pointing to you and to everybody watching this is just saying, these are the two directions and the price levels to watch. If gold and silver start to turn higher and start to make higher highs, higher lows, we're going to see gold go to about $8,800, we're going to see silver go to $175. If they start to break down, I mean, we're going to see $40 silver and probably $3,600 gold. And until it gives us a direction, you know, there's no point in, I don't want to throw money in the market here because it's really just a coin toss, right? I want to let it, let the train start moving and then jump on it when I know it's going in the direction I want. And so that's the space with precious metals. A long-term investor should love this chart. It is a very strong bullish chart over the long run. Even this, these big pullbacks I'm talking about are actually really good, healthy patterns for the, the big longer picture of gold. It's actually one of the best things that could happen. We don't really want gold and silver to just turn, turn around here and, and scream even higher because it means there'll be a lot more pain later. And that pain could last not only be a sharp pullback, but it could actually last a decade or two again. And, and so that's the problem with big, big moves is eventually they get wiped out or they take like a decade to like stabilize, but something that stair steps its way up with these types of corrections are actually much more sustainable and we could see it happen or continue for many years. Always good stuff, my friend. And I think this has been extraordinarily helpful because I just made a metal note, you know, I'm going to watch six to 64, whatever those lows are 63, 65 and silver and maybe 4,100, which was that intraday low back on about March the 23rd, you know, watch those babies like a hawk. We start breaking down and closing below there. Yeah. You better start, you'll be drooling for, uh, for picking up metals and miners, right? They'll all be beat up. There'll be, it'll be a great opportunity. For sure. Um, that's great stuff. I mean, you provide great stuff every day at the technical traders. Please tell everybody what they'll find when they hit that site. Yeah. If you go to my website, uh, the technical traders, I, I manage my own portfolio. That's what I've done since about, uh, 2008. I share my exact portfolio, my allocations, when I'm getting in and out of gold. Uh, I trade just ETFs other than physical metals and I help you navigate the markets more or less. If I don't think it's good for my money, I don't issue it. So everything I do is what I share with you and we actually navigate, learn these markets together. Oh yeah. We talk about navigate. All right. By the time we stock again in, in July, we might be off the edge of the map into where, you know, beyond there be dragons. So we'll just have to see how this month goes. Uh, but anyway, we'll just wrap it up there to get, I'll just remind everybody. Yeah. Please keep an eye on this channel. Hit the like or subscribe button so you don't miss any of the content here in this month of June. Cause it's going to be a crazy one. Uh, we'll have, uh, ask the expert and then we'll see if we can't track down, uh, Santa Claus who lives up there in the North pole. He's got that big gray beard, you know? Um, I've been able to talk him into about every, the semi-annual updates. So I'm going to see if maybe I can drag him in here by the end of the month too, and let him know, we'll find out what he thinks about all this. Um, in the meantime though, keep an eye on the channel. We'll see if we can get that done. There'll be more great content to come from the great folks at Sprott money. Chris, thank you for your time today. We sure appreciate it. Thanks Craig. Pleasure. And from all of us, Sprott money, Sprott money.com. Thanks for watching. But again, keep an eye on that channel as the volatile month of June begins to unfold.