Chris Vermeulen: The Next Bear Market Could Last 7-10 Years
Tom welcomes Chris, the founder of The Technical Traders, back to the show. Chris strictly follows price action and provides his thoughts on the SPY: he believes we are in a stage three topping pattern, which likely portents a further market decline.
It has been a long time since we witnessed a broad stage four decline, so people have forgotten what this could entail: a twenty to forty percent drop. He uses the SPY as an indicator for the trend much of the market is experiencing. When a bear market arrives, people are oftentimes scared and forced to liquidate positions; everything falls – including oil and precious metals. Though, they tend to recover quickly once a bottom is reached, potentially by the end of the year. Chris explains the pitfalls and risks people should be aware of if they intend to stay invested during a bear market, which can take a long time to fully recover from. His method of counteracting this is utilizing inverse ETFs during declines, helping individuals maximize profits when the bull phase resumes. He and his firm make few trades and only utilize the most liquid ETFs. He terms coin re-vesting as reinvesting into the next best asset classes.
We typically see bearish trends in the fall, with much market movement in the last quarter; a good opportunity for investors. Assets remain overvalued, thus would benefit from a correction. Unfortunately, many people get caught on the wrong side of these markets, so it is essential to protect your capital.
Time Stamp References:
0:00 – Introduction
0:32 – Capital Flows & Metals
4:31 – Stage Analysis & Averages
7:53 – PM Performance & Capital
13:03 – Dollar Performance & Gold
15:59 – Energy & Oil Outlook
23:49 – Rate Cycles & Hodling
27:50 – Rate Hikes & Chart Watching
30:42 – More Trades Vs. Risk
34:18 – Asset Revestor
35:46 – Managing Risk & Flows
37:58 – Concluding Thoughts
Talking Points From This Episode
- Get prepared for a potentially large market decline of up to 40%, with everything dropping including oil and precious metals.
- Advantages of inverse ETFs to maximize profits in declines.
- Watch for opportunity in the last quarter of the year when markets tend to have bigger movements.
Chris Vermeulen is the Founder of 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. 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.