Investor Called Chips Crash, Now Warns ‘We’re Nearing The End’ Of Stock Rally | Jim Welsh
Speakers
Jim Welsh
— Founder, Macro Tides
Summary
Jim Welsh reviews the technical and fundamental setup for equities, semiconductors, gold, and bonds. He expects a near-term S&P 500 pullback, sees the semiconductor rally as a selling opportunity, and remains bullish on gold and gold miners for the medium term. He also forecasts long-term Treasury yields rising above 5%.
- S&P 500 completing a thrust from a triangle pattern; weak breadth signals a 4–7% pullback is likely soon.
- Semiconductors (SMH) are in a retracement rally and expected to roll over and break the 503 low.
- Gold is in a corrective wave four, with a near-term high near $4,350–$4,400 before a pullback and a subsequent move toward $4,575–$4,750.
- Gold miners (GDX) recommended on pullbacks, targeting $88–91 initially and potentially $102 or new all-time highs above $117.
- U.S. Treasury yields are in a long-term uptrend; 10-year yield seen exceeding 5% as global yields rise.
- Federal Reserve likely to hike once more; Powell’s shift away from forward guidance is a key dynamic.
- A potential rebound in the dollar index could trigger short-term profit-taking in gold and gold stocks.
- Oil and Strait of Hormuz tensions remain a low-confidence wildcard; markets may struggle to price a resolution.
Ideas
Buy gold on pullbacks, target $4500-$4700
Gold is in a corrective wave-four retracement, not yet the start of the move above $6,000. A near-term high is approaching around $4,350–$4,400, after which a pullback will provide a buying opportunity for the next leg toward $4,575–$4,750. Longer-term, after a C-wave below $3,945, gold will make new all-time highs.
Sell semiconductors, SMH to break 503 low
Bearish view on SMH as a retracement rally in a larger downtrend; even “sell into strength” is not an explicit short/puts/borrowed-stock trade.
S&P 500 pullback 4-7% imminent
The S&P 500 has completed a wave-five thrust out of a triangle pattern but market breadth on this thrust is weak relative to price, and bullish sentiment has surged. This suggests the rally is nearing an end and a 4–7% pullback is developing in coming weeks.
Short Treasuries, yields to rise above 5%
Bearish/downside view on long-duration Treasuries as yields rise; no explicit short, puts, or actionable short trade.
Buy GDX on pullbacks, target 102-117
GDX formed a falling wedge and displayed a large positive RSI divergence near the $70 low. His call from $72–80 targets $88–91 and potentially $102, with a chance of new all-time highs above $117 if gold reaches higher targets. A near-term pullback is likely, and he would buy gold stocks on any dip over the next 1–2 weeks.
