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Chris Vermeulen: Dollar Collapse Could Trigger New Highs in the Metals

Tom welcomes Chris Vermeulen, founder of Technical Traders, back to the show.

Chris discusses the recent moves in the markets and why money has resumed the move into equities. We’re seeing a new rally in most equities and this could spill over to the metals. The Russell 2000 is responding well and it could move 25% up. He believes this cycle may come to an end in January. September and October are often weak for markets but it’s not unusual to see rallies in November. Once the momentum starts everyone tends to pile in.

The dollar is trading at the very significant 94 levels and should it collapse this could be the impetus to drive the metals higher. Precious metals are pushing on the dollar and we’re seeing a momentum shift in GDXJ. This pressure may be a sign that the dollar is failing.

He prefers to focus on price but if other indicators and fundamentals line up those just act as a confidence booster.

Chris discusses the potential for silver to have an explosive move at some point. It appears to be putting in a bottom but it still has a ways to go before we’re through resistance.

Energy prices may cause problems for miners since fuel costs are a big factor in mining. This may place pressure on metals and miners for a while. Energy sector stocks are likely to do very well but a rally may be short-lived.

He expects elevated prices for commodities for the next couple of years before everything normalizes. Prices will likely never come down to where they were a few years ago. Many things will remain more expensive.

Time Stamp References:
0:00 – Introduction
0:35 – Powell QE Taper
1:53 – Risk-On in Equities
4:57 – Seasonal Rallies
6:10 – Dollar Effects & Gold
10:13 – Dollar Confidence
12:26 – Focus on Price
13:56 – Silver
16:23 – Energy & The Miners
19:54 – Dr. Copper & Commodities
21:27 – Inflation & Input Costs
23:01 – News & Pullbacks
25:06 – Equity Bull Run & Risk
26:40 – Trailing Stops
27:51 – Wrap Up

Talking Points From This Episode

  • Recent moves in the markets and equity outlook.
  • Dollar at a key level and the implications for metals.
  • Thoughts on silver and the next rally.
  • Inflation expectations and where prices will remain.

Guest Links:

Chris Vermeulen is the Founder of The Technical Traders Ltd. Chris has been involved in the markets since 1997. He is an internationally recognized technical analyst, trader, and author.

Years of research, trading, and helping individual traders worldwide have taught him that many traders have great trading ideas, but they lack one thing. As a result, they struggle to execute trades systematically for consistent results. Chris helps educate traders, and his mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He has also been on the cover of AmalgaTrader Magazine and featured in Futures Magazine, Gold-Eagle, Safe Haven, The Street, Kitco, Financial Sense, Dick Davis Investment Digest, and dozens of other financial websites.

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