‘Significant Downside’ Next After Breakdown (Uncut) 02-26-2025

Market Turmoil: ‘Significant Downside’ Next After Breakdown | Gareth Soloway

Garrett Soloway is back. He is the president of Verified Investing and we’ll be talking about his market updates. A lot to go over.

Garrett, it’s been a long time. How are you doing? I’m doing great. Lots of action in the markets on the crypto side, on the gold side, and on the stock market side.

So we got a lot to cover. A lot to cover. Let’s start with the fact that the stock market’s been shopping sideways for a couple of weeks now.

The S&P 500 peaked a while ago, the Nasdaq peaked a while ago, and it’s just trading sideways. Let’s start there. Then we have to talk about, like you said, crypto action, gold action, almost at $3,000 today, 2907.

It’s just inching towards that round number. I don’t know if it’s seeing resistance or people are selling right before the $3,000 mark because they’re anticipating it. We’ll get there.

Let’s talk about the stock markets first. Can you pull up an S&P 500 chart? And I think the question everybody has on their mind right now is whether or not the markets have peaked, which is why we’re seeing this consolidation pattern. Yeah, yeah.

And that’s really what is going on here. In fact, the last time I was on it was in kind of early December with you, and we talked about how we were coming up to the cycle date, which again are major trend changes in the markets, right? So when you have a cycle date, you expect a major trend change. That date was December 16th, right over here.

And you can see that while we have popped around here and shopped, we’ve barely been able to go up and you can see the market starting to come down. So the cycle is the change in kind of the atmosphere of the markets. And you can see from that point, we’ve really gone sideways.

And another great chart to show this is on the Nasdaq 100. Here was exactly December 16th, the cycle date. And if you look, we came up, we did a double top and you can see the Nasdaq has now broken major uptrend support right here, this low going back to the August lows.

And now we are headed lower and listen, there will be bounces by the dippers aren’t going to vanish, but ultimately this should be the bigger change in the markets where instead of chopping sideways now, which we’ve done for a couple months, it should start being, you know, sell the rip type rallies. It’s broken below that trend line. Does that mean it’s been oversold for the last couple of sessions or does that mean it’s on its way down some more? So just in the very short term, it is getting a little oversold.

So you start to think about bounces on key names like Palantir that have dropped 30% in the last week. But the breakdown here is significant because usually what ends up happening is when you break a major uptrend, that is now major technical damage. So you’ll get bounces, but oftentimes they bounce back to the line and then get rejected.

And instead of rallying to new highs, now you get stuck at resistance and it gets rejected to making new short term lows. So I would in general, the fact that we’ve broken this, say, yeah, you’ll bounce here maybe over the next couple of days, but look to sell into that and the market should be headed lower. Well, are you concerned about the fact that it’s been stalling for quite some time? Does the duration of this sideways action mean anything to you? Like usually when it’s, you know, trending sideways for a couple of trading sessions, that’s one thing.

If it’s trending sideways for a couple of months now, that’s something else. Maybe that’s stabilization. Yeah.

So there’s two ways of looking at that. One is you’re getting bullish consolidation here, and that would be the case until you break one of the trend lines, right? So what you can see here is we have a double top line up here. In fact, I’m going to remove this one to just keep it as simple as possible.

You have this double top, which was your flat top, and then you have this upsloping line. So while we were in this, there was a question of, are we going to break out to the upside or are we going to break down? The market has now decided which direction by breaking this lower trend line, but you’re right up until that point, it could have been a bullish consolidation. Now it has failed, and now you’re looking at a failed breakout or potential breakout leading to significant downside in the markets.

So you actually were not too bearish a while ago when I had you on right before the new year, and it’s been chopping sideways. Generally speaking, how would you describe your sentiment now in just, you know, a sentence or less? Yeah. So sentence or less, you have to be more bearish now.

The trend has broken the trend again. Trend is your friend until the end, as they say. Well, it has now ended because we’ve broken below that line.

And I think it’s important to note that we have some very big negatives that are concerning investors. You have profit forecasts starting to slow down. So again, that’s an issue.

You have inflation, tariffs, all of these negatives here. And lately, and you know this, I’m sure you’ve covered it quite a bit. There is economic data that is pointing to a slowdown.

So now you have the potential for stagflation, which is slowing growth with higher inflation. And that’s really a very big negative for stocks out there. Can you actually highlight a few of these economic data points that you’re referencing? Yeah, sure.

So we’ve seen recently the Michigan sentiment numbers coming in much weaker than expected. Consumer sentiment numbers coming in weaker than expected. We have Walmart earnings, which I think were a major turning point in the market because Walmart, everyone was trading down to Walmart, but you didn’t have a lot of people going below Walmart.

And we saw people spending lots at Walmart until this latest guidance that they just gave about a week ago, where we saw Walmart breaking to the downside. In fact, let’s go take a look at that chart. And what we can see is Walmart was up here at these crazy levels, valuation 40 forward PE, which again, Walmart should never be trading at.

They just gave a slightly weaker guide, which tells you the consumer is slowing. And before you know it, we saw a big drop. We’re getting a bounce today, but this is not over if the consumer is stopping.

And you know this as well as I do, David, the consumer is the backbone of the US economy. And if that player is slowing and even the mid tier to upper tier is slowing, this economy is in some trouble. Is Walmart indicative of the broader stock market right now? Or do you think that the tech stocks are a better indicator? Yeah.

So I think Walmart has been an indicator of institutional money, meaning that, you know, you don’t find a lot of smaller investors that are so excited to go in Walmart because they’re going to make double or triple their money. That would be more reserved for a Palantir, PLTR here. And what we can see on Palantir is that it has now dropped from 125 back to about $85 in a matter of five trading days.

Other names to watch, take a look at APP, another cult following here. Look at this beautiful parallel channel, by the way, it goes right up there on earnings, gets rejected and comes in hard negating that entire move. And then you have other names like OKLO, huge moves to the upside in the short term, but retracing these type of moves.

And lastly, I’ll mention HIMS and HERS. This one, again, collapsing to the downside after these meteoric runs. So you have two kind of tones to the market, the institutional side, which has been going into the names like Walmart.

They’re the types of players that are in some of these bigger high flyers like Amazon and the big caps. And then you have the smaller kind of Robinhood investors, speaking of which, take a look at Robinhood’s collapse lately. And these now are getting punished.

So it’s both sides of the spectrum. And that tells you that money is now exiting the It’s not necessarily rotating like what we saw over the last couple of months. Before we continue with the video, I’d like to tell you about the precious metal sector.

Now, gold, as you know, hit record highs. So the question on everybody’s minds is what should we be following and tracking in relation to gold? Well, I’m here to tell you that Stellar Gold is a name to watch. Stellar is a leading gold developer with two cornerstone gold projects in Canada, the Tower Gold Project in the prolific Timmins Mining Camp and the Colomac Gold Project in the Northwest Territories.

The company has a massive global mineral resource estimate, one of the largest in Canada for a gold developer. Its young and ambitious management team, with a track record of success, is aggressively advancing its projects and is determined to unlock significant value. If you’re looking for a team who is as enthusiastic about gold’s future as you are, then check out stllrgold.com slash David Lin in the link down below or scan the QR code here where David Lin viewers can sign up for their macro gold newsletter to get inside knowledge and updates for free.

So let’s just go back to the Broad Index one more time before we move on to any other specific security. So now the trend is your friend. It’s pointing to the downside.

Do we have a downside target for us, which at that point you would be comfortable getting back into the market? Yeah, so in the short term, this is the SPY chart and I think this is worth noting. If you take the low from October now and you connect it through the August 2024, so this is the October low of 2023 to the August low of 2024, you hit here and this is where we are. And this is why I’m short term thinking, okay, we might get a one or two day bounce because you’re into this support level.

But ultimately, again, you’re now looking at major signals of exodus from institutional money that’s now not rotating into, let’s say, oil stocks are not rotating into other players, but instead exiting the market and the retail investors also getting smoked. And so you’re looking at this trend line eventually breaks on the SPY around 590, which it looks like it will. Then you look at a much bigger corrective move here.

And then we talked about the QQQ, which is the NASDAQ 100 that has remained weaker here over the last couple of months, and that has officially broken trends. So again, you’re looking at some decent downside, even if we get a one or two day bounce. Interesting.

All right. Well, let’s take a look at some other asset classes first, and then we’ll compare asset classes at the end of the interview. Gareth, I know people like to get your outlook for the best and worst assets for the year or the semester or the quarter, whatever you want to call it.

Bitcoin first. Now, Bitcoin has breached $100,000 a couple of months ago, as you’re aware, actually around the same time that we spoke last. And I think the question is whether or not Bitcoin is just following the NASDAQ or it’s waiting for something else, because like the stock market indices that we’ve just talked about, Bitcoin has also traded sideways and range bound for a couple of months now.

Right. And so last time I was on was in early December. We were right over here rallying up into $108,000.

And I said, guys, this is going to be a likely top on Bitcoin. And I’ll show you guys why real quick, because I think it’s important to revisit these stats. So if we take a look at this chart on Bitcoin and we go to a bigger timeframe, this is the weekly timeframe going back to the bullish high, the bull market high in 2017.

Notice this trend line connects perfectly through the highs of 2021, both of them. And then it actually has the low of a parallel go right through the lows of the bear market here as well. Well, lo and behold, look at what we hit right there after our last discussion in mid-December.

And sure enough, you can see it came down, it retested, got rejected again by this major trend line and is now starting to break down, which is really, if you look at this, it’s either repeating this, which was a big correction from $65,000 to $30,000 or God forbid, right? For those of us that are in Bitcoin, it’s starting to do a bigger bear market to the downside that could be much nastier. Now, we don’t know which one it is right now here, which is it this down move before this next big move up or a much bigger bear market. But that was really what I was looking at in the last December when we talked about talking about how technicals were telling us Bitcoin was likely to be at a top.

Now, if we flip over to our other Bitcoin chart here, we’ll look at the one on Coinbase. This is a short-term daily chart. And what we can see is you had a double top on Bitcoin here.

It retested and pierced right there. And then you had this trend line right through the lows. Well, now this has broken.

And that tells me that we are likely headed lower on Bitcoin with bounces along the way. But you’re going to likely head back to this $73,000, $74,000 level, which again would be major technical support. So I’m basically sitting on the sidelines looking for Bitcoin to get back to $73,000, $74,000, $75,000.

And then I’ll start nibbling a little bit at that level. $73,000 divided by where we’re currently at right now, which is $86,000. Yeah, we’ve had a huge correction in Bitcoin since basically the beginning of last week.

Anyway, that’s about a 15% decline. I mean, for Bitcoin, that’s not a huge downside. In fact, Bitcoin has moved 10%, 15% in the day before.

So I don’t sense that you’re super bearish on Bitcoin because you’re going to $76,000. You’re not saying it’s going back to $30,000. No, at this point, I’m not saying that.

So yeah, for sure, I’m not going that far. I still am a big believer in the long-term viability of Bitcoin as a digital gold. But one of the things that is always something that I fight with some hardcore Bitcoiners and hodlers is that people want to say, oh, it doesn’t have anything to do with the stock market and risk on and risk off.

And in reality, it’s very clear. Stock market’s tanking the last couple of days. Bitcoin’s tanking the last couple of days.

Because when people get scared, they don’t care what assets they’re in. They’re just getting scared. And they react by selling Bitcoin or stocks.

Doesn’t really matter. Now, longer term, do I think that the Doge team in the government is actually going to really cut significant amounts of money from the U.S. debt? No, I don’t believe that. So I think that there’s a viability towards having an alternative to the U.S. dollar or to fiat currencies.

That’s where Bitcoin comes in. So for me, it’s never all in or all out. It’s a kind of a let’s buy a little around 75.

If it goes to 50, I’ll buy some more kind of doing like that and accumulating. But I, for one, would be a buyer, at least as a swing trade around 75. So today, all asset classes, actually, risk assets and gold.

We’ll talk about gold in just a minute. Bitcoin’s down about two percent. Treasury yields are down one point seven percent.

The stock market we talked about, NASDAQ’s down one point nine percent. It was on the back of apparently a lower or weaker consumer confidence report. Is that the reason why everything’s tumbling today? That among other things, right? So we’ve had a string of these weaker consumer confidence numbers, concerns about inflation, which is now pulling the consumer back, worries about tariffs, about new stuff in the government.

And I mean, think about it like this, is that as a lot of us might be a fan of cutting, you know, kind of irrational spending in the government, but there’s millions of government employees that are now saying, wait, I better not go spend some money because I don’t know if I’m going to have a job. Well, guess what? That has an impact on the U.S. economy. And ultimately, we’re seeing it here.

But I think what’s important to note here, David, is if we look at the 10-year yield, it used to be that when the 10-year yield would come down, the stock market would rally. It would say, oh, cheap money. This is great.

The U.S. economy is strong. So cheaper money is a benefit. Now we’re seeing, uh-oh, the U.S. economy is weakening.

So that is why yields are going down. And weakening economy means lower profits from these big players out there that drive the S&P. And that’s why we’re seeing the stock market coming in sharply.

And it’s interesting how tariff news, which has been ongoing, hasn’t really moved the market to the downside dramatically until maybe now, arguably whether or not this today’s big drop had to do with the fact that Trump just said, we’re going ahead with tariffs on Canada, Mexico next month. I know it’s been delayed for a month, but now that month is almost over. You think maybe now the rooster has come to crow, so to speak, on the tariffs factoring in, or the markets factoring in tariffs, rather? I do.

And I think the reason why it hadn’t had a bigger impact previously is because the market is so used to now Trump threatening something as a bargaining tool and then backing off once he gets a little bit of a give from the other party that people didn’t really think, oh, well, these tariffs probably won’t ever come into play. It’s looking more and more like they will. And therefore, the market is now saying, okay, we have to factor this in as fact now, not as just a bargaining tool.

Okay. All right. Let’s talk about gold.

Gold is nearing $3,000 an ounce. And like the other asset classes, it’s recently seen this big red bar down as well. And same question before we move on to some of the technical aspects of gold.

Is this rally over for now? For the short term? Yes. I mean, if you’re talking the next couple of weeks, it probably is. I still think gold is going to $3,000 an ounce.

But I think you mentioned something very, very poignant early on in our discussion, which is that maybe everyone was expecting it to hit $3,000 and ready to sell there. So instead, it’s stopping just a little shy. Markets behave like that.

When there’s a big wall of sellers and everyone’s anticipating it, oftentimes that will create a top before it gets there and you’ll get a pullback. And then once people start throwing in the towel and saying, oh, gold is over, right? I still remember in 2022 or so, 2023, everyone was saying, oh, gold is over. No one wants gold.

It’s all about Bitcoin. And then what happens? Gold goes on an epic run. So I think you’re kind of using that psychology here in the right way.

And in the short term, we know that gold sells off when there’s panic in the markets. We’re starting to see a little bit of that. Remember in COVID, gold sold off as well in March of 2020.

And so it rebounded very quickly. And I think that’ll be what happens here. But in the near term, it likely is going to pull back.

I have my downside target. You can see very clearly this was your high pivot right here. We chopped around, we broke out.

So in general, you would expect charts to bring it back to that level and then make your next move up. And the next move up will probably everyone will expect it to hit $3,000 and stop. My guess is it’ll go through $3,000 and continue.

Continue where? Wow. Now you’re getting into some serious stuff here, but it’s always hard to say. But for this year coming into this year, I said $3,000 was where we were headed.

I would generally raise that target by year end probably to about $3,300. I still think it’s going to have a lot more upside in the coming years as the debt fiasco doesn’t get under control. So I would be looking at $4,000 or $5,000 within a couple of years.

But I think again, let’s keep it conservative this year. Let’s raise it from $3,000 target to $3,300 on gold this year. Yeah, that’s quite reasonable.

And that’s actually in line with a lot of expectations from big banks, for example. Goldman had a $3,000 target earlier last year, I think. Anyway, so $3,000 implies a 50% upside over the course of the last 12 months already.

That’s already a huge move. And the fact that you’re upgrading that to $3,000 from $3,000 to $3,300 is quite significant in itself because you’re saying that a 50% move in one year for gold still has room to climb. My answer is why? Why do we have even more than 50% on an asset that traditionally has not moved 50% in a year? Yeah, so it’s a great question.

And there’s a couple of things to look at in the chart. So number one, you have to go back to the previous bull market. So if we go back on the weekly chart and we look at the last bull run, which really started back in 2003 or so, we can see that gold actually went a lot further.

Now, granted it took about 10 years, but it had a 500% move up in that period. So that would imply that we could easily do more than just 50% in one single year, especially over the next few years. And if we go back even further, we can see here in the 1970s, during a very similar time of inflation, we went up 700%.

So you can see the percentages as price goes up and gold go down a little bit, but this still implies, let’s say 300, 400% of upside this bull run. And I think that’s very logical to think about over the next year, next couple of years. The other thing to keep in mind is that I’m just not a believer that the US is going to get their debt situation under control.

I think that as soon as we start to see the economy stuttering and the stock market coming down, Trump, which gauges his presidency on how the stock market is doing, is going to start telling the team at Doge to stop doing what they’re doing and stop cutting jobs and cut, stop doing this type of thing to get the economy back on track. And then ultimately, I think that, again, a safe haven asset like gold, if the economy kind of stalls out and you think about how much money is in stock still right now, there’s a certain amount of that money will come out and look for a safe haven. The bond market might be a recipient, but also gold will be a recipient of a lot of that money coming out of stocks.

And I think that’s another reason. And we’ll talk about Doge in just a minute, because you and I haven’t talked about that. Well, you referenced earlier bull cycles for gold.

I wonder what’s different this time. This is a huge move from where it was just a year and a half ago. And you talked about the debt level rising.

Is that the reason for why gold moved so much in the last 18 months, this rising debt level? Keep in mind the rising debt issue is not a new phenomenon. It didn’t start last year. So I wonder if there has been another catalyst for why gold just shot to the moon.

Yeah, I think part of it is the fact that people are much more aware of the U.S. deficit and the debt. It’s become much more mainstream in a lot of the media, and it’s worrying a lot more people. So a lot more people than maybe 10 years ago are saying, wait a minute, what’s going on here? I need to diversify away.

And I think that also gave rise to why crypto became so, so popular as well, specifically Bitcoin. So I think all of those factors are involved. I also think it’s important to recognize that if you go back to the all-time high previously on gold and adjust it for inflation, we still are not technically at all-time highs on gold, again, adjusted for inflation.

So what that tells us is that gold has still underperformed, even if it’s at its current levels, is not at an all-time high again when adjusted for inflation. Okay. Now, if we were to compare the asset classes that we’ve talked about so far that we can get maybe some other things that we haven’t talked about, which is your favorite or most bullish asset class for the remainder of the year? That’s a great question.

All right. So you remember, I was a big fan of the Chinese stocks, right? So China stocks, I even talked about it in December here. Look at, this is where Alibaba was in December.

This is a classic technical analysis pattern. It’s a breakout of a wedge pattern and then a retrace to the scene of the crime. This has now gone from $80 all the way up to a high recently, just days ago of $145.

Those need a break. The China stocks need a break. But I would start now looking at defensive names.

I have a couple for you. Like I’m looking at accumulating Pfizer. Pfizer pays a relatively high dividend, I think 5%, 6%.

It’s at the low end of a chart. You can see how beaten down it is. These are going to be the names that are going to perform.

In fact, look at what it’s doing today. It’s up 32 cents, which is about 1.2%. Now, listen, a lot of us would say, oh, what’s 1.2%, but the stock market is down over 1%. So it’s outperforming.

Another name I love is this one, Biogen. So these are a lot of biotechs, trades at a forward PE of 8.7, breaking out of a downsloping trend line right here. And again, trades at a low valuation.

So again, for me, I think the best performers are going to be ones that are low risk to most investors, meaning that they’re stable companies. They don’t get hit quite as bad during a recession. People still need their drugs over a recession, right? And those ones that pay a dividend, that’s going to be where a lot of money is going to rotate.

Just to leave that up there for a minute, people have asked me, and I guess it’s just a general question, how trend lines are drawn, because presumably you could move that trend line over a few degrees and it would not be breaking above that trend line anymore. So I’m wondering how you approach this. Yeah, it’s a great question.

And it’s something that takes a lot of practice. And even when you practice it as many years as I have, you still find little things and you’re like, oh, well, maybe I should adjust it here. In general, a trend line should connect through as many highs as possible where it still makes sense.

So for me, I’m looking at this downtrend here, which started back in mid 2024, and I’m connecting it from that beginning point to the highest points right through here. And then I notice it kisses right here, touches right here, right here, right through there, and now it’s broken above. Now, again, if we have it on a point where if we’re kind of rotating this here and we rotate it up, it’s still okay.

Like, you can still move it around a little bit, because granted, I could be off by a fraction. But in general, think about it like this. It should make common sense.

It should make sense ultimately. What other technical tools do you use besides trend lines, since we’re talking about technical analysis? Yeah, so in general… Let me rephrase that question, Gareth. Does the asset class determine the tools you use, or not so much? Yeah, so the asset class doesn’t really determine it.

I’m a very simple trader in that the trend lines are my friends. They give me support and resistance. I look at bull flags, bear flags.

I keep it so simple. Like, you’ll see some of these traders out there, and they use so many complex algorithms and all this stuff. I just need the charts.

You give me the chart. I’ll draw some lines on it. I’ll tell you where support is, where resistance is.

The probability of the next move is going to be to which target. That’s really all I do, just as simple as can be. Okay, perfect.

All right, so we talked about Bitcoin, gold and stocks and bonds and a bunch of other things now, Gareth. Let’s talk about crude oil. That’s something we haven’t touched on yet.

I will get to Doge, but crude oil and the energy policies that Treasury Secretary Scott Pescent and the Trump administration want to implement, which is to drill, baby, drill, more oil production. Lower oil is what they want. Is that what you see? It is what I see, and unfortunately, it might not be for the right reasons, right? So we see oil today coming down hard, mainly because, again, there’s more concerns about the US economy.

We know China’s trying to recover a little bit, but it is far from a recovery, and if the US slips into a recession, China will probably struggle as well. But we can see, again, oil down today, it’s reattacking this short-term trend line. But the biggest concern I have is this, and if we zoom out on this chart, there’s a trend line that goes back to 2021, and you can see every time we kind of hit it, we bounce, hit it, bounce, and then over and over again, we just continue to hit this 65 to 66 level and then bounce.

My concern is that if this trend line ever breaks, oil could end up going to $35 a barrel, and it’s not going there because it’s drill, baby, drill. It’s going there because the US economy is in a very bad recession. So just be aware, if we break 65, 66, it’ll have bounces, but again, look for that 35 level over the next six months or so.

Interesting. And you would not be shorting oil right now at current levels? No, not right now. If it gets down to that level and gets another bounce, I would at that point, but at that point, then I would stay away until it breaks.

Once it breaks 65, 66 and confirms, I think that’s where I jump on because we don’t know, right? I mean, I might have thought it was going to break over here back at, you know, in 2023, and then it goes all the way up to $90. And so you really, when you have a trend line like this, you got to be sure it’s breaking before you jump on that short bandwagon. Generally, when something, anything is trading within a band like it is right now that you’re showing right now, above support, below the trend line, what do you do with that? Do you just wait? Yeah, so a couple of things.

I mean, you know, there’s been levels like I shorted oil with members of my commodity service right up here, and we were able to capture a decent amount of alpha to the downside on it. But again, we got out kind of once you get into this chop, it’s like, okay, is it going to bounce up again? Is it going to come down? Right now it’s coming down, but there are shorter term trades to be done out here at various levels on these pops and then these drops. But again, it’s more the bigger break when you’re saying, okay, are we going to see this 50% potential drop in oil? We got to look for that bigger trend line to break, and then that’s the bigger move.

Otherwise, you know, you’re playing with 5, 10% moves where you’re pocketing smaller gains in the short term. Okay, moving on to doge. My question with doge is pretty simple.

Is it bearish or bullish for the economy? Is it bullish or bearish for the markets, short term and or medium term? I ask this because if you were to look at the government like a company, which I guess is what Elon Musk is doing, he’s going to make it more efficient. If you were to cut unnecessary waste or trim deadwood in a company, presumably making it more efficient, more lean, improving margins, that’s bullish for the stock. Can the same logically be applied at the government level? Does it make sense to you? So I think early on it was looked at as being bullish because it was a matter of getting the debt under control and cutting wasteful spending.

The problem is, is that over time, cutting wasteful spending is essentially taking away stimulus, right? So again, you know, you say, okay, there’s X amount of millions of federal workers. Well, if you lay off a million of those workers, now that’s a million unemployed that don’t have money in their pocket every month to go spend and buy goods. And so ultimately, I think it is a net negative here.

Listen, if you ask me, is it a good thing in the next 20 years? Yes, unbelievable. But there’s so much kind of stimulus that’s been injected from the federal reserve as well as from the government, that it’s almost like a patient that is on drugs. And you’re going to go through a withdrawal period.

There’s no doubt about it. And that withdrawal can be very, very painful and will be. So again, near term, not so good.

Next six months, year, two years, probably very negative if they continue with this. If you ask me, it doesn’t make for a healthier patient in 10 years. Absolutely.

So again, it’s a matter of, we want to take our medicine now and go through it, or do we want to just prolong the patient being injected with drugs and eventually the patient dies anyways? It’s to me, it’s a no brainer. You’ve got to do it. It’s not going to be super popular over the next six to 12 months once the economy tanks.

Okay. Gareth, your least favorite asset class. We talked about your most bullish one.

What about something that we discussed or maybe we haven’t discussed yet that you are most bearish on? Yeah. So for me, at least it would, it would definitely be more along the lines of big cap tech. Uh, we’re already seeing breakdowns in some of these names, but you know, you look at a Google, for instance, Google actually interesting.

And they enough, I had annotated this chart before you can see it’s actually into support. This actually tells me we’re probably going to get a bounce in this market. Like we discussed, um, just earlier in this interview.

Uh, but that’s a great level right here at one 75 Amazon. If we look at Amazon, look at this roll over here. So I think you wait for bounces and then you get the heck out of the big cap tech and technology names.

I even think a name like Nvidia has a lot of downside back to the nineties or below in the coming months. And so you got to just look at it very simply like slower economic growth means less earnings growth stocks right now are priced historically near levels that has been, have been historically very, very overdone. And there’s going to have to be this flush out of money as the economy slows.

Listen, if the economy doesn’t enter a recession, can the party continue? I guess it can, but it’s almost inevitable, especially if they’re cutting spending in the government that we are headed towards a recession. Let me just end on, uh, this question. So leave that Amazon chart up, please.

If you look at that chart, which is indicative of a lot of other markers that we discussed already 20 and 25, just looks like it’s not off to a good start. You’ve got things just breaking below their three month, um, highs, uh, like Bitcoin, for example, reaching a three month low below $90,000 today. And it just looks like risk off is the trend right now.

What could turn this around? If I were to ask Gareth, something bullish were to happen in the next quarter that could reignite this bullish sentiment we saw in the last year, what could in theory that be? Wow. So, so I think the best case scenario is that a slowdown in the economy, and I know this doesn’t sound good at first, but a slowdown in the economy brings inflation in dramatically enabling the fed to cut interest rates drastically. And then that could get the bull market going again.

But aside from that, it’s at a point where, you know, with the inflated valuations in stocks, you’re going to have to see some sort of trigger. And by the way, I think it’s important for everyone to understand is there’s a reason why inflation has been ticking up recently in the CPI data. And we’ll probably see it in the PCE data on Friday.

And that’s simply that the stock market created such a wealth effect when it was continuing to make new highs that people didn’t feel like they had to cut back on spending. They just continued. They said, oh, my 401k is up another 5% this month.

Let’s go buy another TV. Let’s go on vacation. That’s inflationary.

So we saw Jerome Powell call that out. He said, the S&P is too hot. That’s been again, since he said that, honestly, it’s been pretty much a market top.

I wonder if just sidetracking, because I’m actually on vacation now. I wonder if vacations are actually inflationary for the U.S. because you’re spending money abroad. I’m just taking that out loud.

I get your point. People are spending a lot of money on discretionary things. OK, well, the scenario you just described doesn’t look likely right now because the Federal Reserve has actually factored in tariffs now.

They’re saying inflation looks like it’s going to probably be sticky to the upside. The market certainly doesn’t think that there’s going to be any rate cuts anytime soon. If you look at the CME Fed watch tool, there’s no chance of a cut by the next meeting in March.

Right. So that’s true. That’s true.

But I will go on. So it looks like June, June or July is the first cut. That’s the only one factored in this year.

I will go on record and say I think there’ll at least be two cuts this year, possibly even three by year end, which tells you what I think about the U.S. economy by year end. Which, well, two, three cuts. Is that enough to turn the S&P 500 around? Are we going to, you know? No, no, it won’t be.

Unfortunately, it won’t be. It won’t be enough to turn the S&P around, but it will give us significant bounces along the way, which as a trader myself, being in and out, being a swing trader, that will be amazing opportunities to go long at key technical supports when these type of vibes and factors are taken into account. Great.

Tell us about verified investing, Gareth. Great interview. Tell us where we can find you.

Yeah. So verified investing is all about data and charts. You guys saw the charts that I was showing here, the trend lines taking into account key breakpoints and what ends up happening.

Verified investing, I brought it to the world essentially and created it to give people an outlet where it’s not about the mainstream media’s narratives being pushed. It’s not about the social media hype or fear. It’s just facts based on charts.

And when we do that, what we find is that probability takes over and we can determine and say, yes, this is a good investment at this level or it’s not. And you make very logical decisions that can then have a great impact on buying at the right times or selling at the right times. And that’s all about verified investing, what I’ve tried to create here.

And David, it’s always so awesome to talk to you. Yeah. Let’s do this again soon.

A lot of volatility I’m sensing in the coming months or weeks, not even months, but weeks. So let’s do a follow up sometime soon. Thanks a lot, Gareth.

Appreciate your time as always. Thank you, buddy. Take care.

Thanks for watching. Don’t forget to follow Gareth in the link down below and don’t forget to like and subscribe.