8% Interest Rates? Chris Vermeulen Warns the Bond Market Could Break
Speakers
Chris Vermeulen
— Chief Market Strategist, TheTechnicalTraders
Summary
Chris Vermeulen discusses the current market landscape, highlighting a melt-up in equities and semiconductors while warning of a potential bond market break. He advises waiting for corrections in gold and silver, avoids oil due to volatility, and is bullish on energy stocks. The dollar's direction is a key risk signal.
- Equities and semiconductors are in strong uptrends, with money flowing in.
- Gold and silver have long-term bullish potential but expected short-term corrections.
- Oil is volatile and avoided despite potential for elevated prices.
- Energy stocks (XOP, XLE) are in a renewed uptrend and worth owning.
- Bonds (TLT) are dangerously crowded, with risk of a sharp price collapse if yields rise.
- The dollar index breakout or breakdown will determine risk-on vs risk-off flows.
- Uranium and AI-related energy plays are intriguing but not yet actionable.
- Overall, Chris follows price trends rather than predicting tops or bottoms.
Trade Ideas
Bullish on S&P and NASDAQ.
Equities are in a new uptrend with strong money flows. The S&P 500 and NASDAQ could rally another 6-7% or more. He is long and following the trend.
Semiconductors have massive long-term upside.
Semiconductors are in a sweet spot as suppliers to AI buildout. The sector has massive momentum and could double or triple over several years, despite short-term overbought conditions.
Wait for gold correction to buy.
Gold is in a long-term bull super cycle but short-term trends are down. He expects a correction to around $3,600 before the next leg up to $8,800. He is waiting for the correction to buy.
Silver: wait for correction to buy.
Silver has a similar setup to gold: long-term target $175, but short-term correction likely to $40. He is waiting for the correction to re-enter.
Avoid oil due to volatility.
Oil is too volatile and dangerous to trade. He steers clear despite believing it could stay elevated.
Bullish on energy stocks.
Energy stocks (XOP, XLE) are in an uptrend with huge volume and a supportive oil price. He is long XOP and sees further upside.
Avoid bonds; risk of collapse.
Bonds (TLT) are crowded long and at risk of a sharp collapse if yields spike toward 8%. He warns that the chart pattern is bearish for bond prices.
