Stocks In Trouble? Silver’s SLV Short Squeeze, Gold’s Breakout!

Craig Hemke: Hello again, SprottMoney at SprottMoney.com. Hey, it is now the month of February. What a month it's already starting out to be. It is time for your precious metals projection video where we get a chance to talk to one of the best technical analysts in the business and find out where he thinks the markets are heading. I'm your host, Craig Hemke, and joining us is that technical analyst, Chris Vermeulen of the TechnicalTraders.com. Chris, always so good to see you, my friend.

Chris Vermeulen: Same, Craig. Yeah, pleasure.

Craig Hemke: Hey, we're rolling in February and there's a lot going on, a lot going on in the metals markets. And can't wait to hear what Chris thinks about it from a technical perspective. But of course, we're always talking about adding physical metal, right? And this content comes from Sprott Money. So let's keep them in mind every time you're in the market for physical metal. And you might want to check out Sprott Money's latest promotion. They call it the Our Choice Gold and Silver Box for gold and silver bars and coins. When you select the Our Choice product on the SprottMoney.com website, Sprott Money hand-picks the item for you, ensuring that you get the best price available. Each piece contains a minimum of 99.9% pure silver or pure gold, giving you the best value for your dollar. And again, always free shipping and insurance on any order over $500. Go to SprottMoney.com or give them a call at 888-861-0775.

Look at my boy Chris, got the website right up there so you know what it looks like. And again, keep them in mind every time you're in the market for physical metal while you can still get your hands on some. We'll talk about that in a second. Chris, though, let's start. You don’t just simply focus on the precious metals. That’s important for people to understand. In all your daily briefings and all that you do for your subscribers, you're always looking for the best sector, the best asset. That includes, from time to time, equities, obviously, NASDAQ, the triple Q's, whatever. Let's start there. How do the markets in general, the U.S. markets specifically, equity markets, look to you here as February begins?

Chris Vermeulen: Yeah, sure. Well, understanding the equities market like the S&P 500, where we stand in terms of its trend, where it stands within its stages. Are we in a major topping phase or a bull market phase? Understanding where we are in the equities market helps us navigate the precious metals market. We're in what I believe is a major topping phase in the stock market where gold comes to life. And we've seen that—you and I have talked about this many times. But when we look at the equities market and the daily chart of the S&P 500, we have this very strong chart pattern. We've had a pretty big correction over the last month and a half, two months. And now the market has rallied up and we've got this little bull flag formation forming on the S&P 500. It's also the same with the NASDAQ, and it looks like it's primed and ready to start another push and squeeze to the upside. So that's kind of where we are. The short-term trend is still up.

If we look at the long-term investing trend, we are still in these green bars. The weekly chart of the S&P 500 here is showing that we are still in a bull market phase. It's not a really strong bull market. Again, the majority of stocks aren't performing very well. It's just a handful of large techs dragging the indexes up to make people think it's a very strong market, but we don't wanna fight the trend. So this looks like we want to push higher. I think there's another 5% on the S&P 500, maybe about 8% on the QQQ.

If we were to look at the shorter-term chart, when we look at this 30-minute chart here on the left, over the past couple sessions, we've seen the market create these lime green areas. This is when the market is oversold within an uptrend. Usually, that's when everybody's panicking, and then we see the market have this strong rebound. We had this again just this week. The market opened sharply lower, got oversold, and we've been seeing the market rip higher, recouping pretty much all of that and then some to the upside. These oversold conditions are telling us that, hey, this market is still intact. When we have panic selling in the stock market, when people are dumping shares, people are stepping back in and buying them up. So the buy-the-dip mentality is still here, and it looks like the market wants to go higher. We had a positive close on the month. That generally means the market wants to close or trade higher for the year.

There are sectors within the equity market that currently qualify as best assets now. Believe it or not, gold miners—GDX—have gone to the top of our list as the best asset right now in terms of price action. It was at the bottom of the list along with silver miners not that long ago, and now it's back at the top. You can see this huge screaming rally to the upside. Money's piling in. This blue line on the volume is telling us on-balance volume. People are accumulating it and holding it, which is why it's going up.

Gold specifically holds up the best. And this is why I've been saying, physical gold is the best way to go. Don’t get into miners. Don’t get into those because they're probably going to underperform versus gold. I see this all the time with subscribers and followers. They all pile into gold miners because they want to make more money. But the reality is, silver miners are like 20% off the highs while gold is making new all-time highs. Just move to the asset class that is moving higher and in the trend that you want, which is physical gold.

There's all kinds of stuff going on in the precious metal space right now in terms of where gold is shuffling and whether you can even get physical gold. When we look at gold, it just had a series of rallies and pauses. The next move is about 3050. That’s the next upside move in the target.

If we look at silver, it has a similar pattern as gold, though much messier. I’ve never been a fan of the silver chart. It looks like it wants to run and push higher. But the only catch is there's not a whole lot of upside before major resistance kicks in. Gold’s got the same amount of upside potential without the crazy volatile risk. So you pick your poison: do you want the more wild ride or the steady Eddie type of move?

Chris, it's always so fascinating to talk to you. Tell everybody where they can find your work.

Chris Vermeulen: Sure, yeah. If they want, they can go to my website, thetechnicaltraders.com. My whole goal is to help people avoid bear markets and not give up their lifestyle, their retirement. I provide daily morning videos before the opening bell. If you want to tune in, you can copy my trades.

And just a reminder, everybody, please like or subscribe on whichever channel you’ve been watching this. There's going to be a lot more content coming here in February. All of it from SprottMoney.com. Be sure to check them out every time you're looking for physical while it's still out there. Call SprottMoney.com or give them a call at 888-861-0775. Thanks, Chris. I look forward to talking to you again next month.