Chris Vermeulen argues the market is late-cycle and close to a major inflection: he expects a short-term stock-market dip to be bought, but sees weeks-to-months risk of a broader equity top, a metals blowoff peak, and weakness in Bitcoin.
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This interview on David Lin’s channel centers on Chris Vermeulen’s technical-only read of a market that he thinks is losing momentum. He says the S&P 500 is still in an uptrend, but news-driven gaps lower, a VIX spike, and flattening upside slope suggest the market is starting to “run out of steam.” Near term, he expects gap-down weakness in equities to attract dip buyers, especially around the 50-day moving average and typical gap-fill behavior. However, he frames that as tactical only, not a change in his broader view. Vermeulen is more concerned about the intermediate setup. He argues small caps and micro caps leading higher is more of a late-cycle warning than a healthy broadening of the rally, and he repeatedly says the market is close to a major reset or top. …
Tactically, the immediate setup looks like an oversold equity dip that can bounce after a gap-down, while silver and related metals remain the most extended crowding trade. The main near-term risk is a continuation of news-driven selling that briefly undercuts support before buyers step in.
Over the next few weeks to months, the more important question is whether large-cap leadership finally rolls over and breadth deteriorates. If the Magnificent 7 break down and metals complete a blowoff, he expects a broader risk-off phase rather than a clean sector rotation.
Structurally, he is describing a late-cycle exhaustion regime: crowded winners, retail FOMO, and leverage eventually mark the end of a trend. His long-run implication is that technical trend strength can persist far longer than bearish narratives, but once it fails, the unwind can be abrupt and broad.
The S&P 500 is losing momentum and may be close to a major reset or top.
He says the market is running out of steam, the slope has flattened, and it is potentially coming into a big reset.
Near-term equity selloffs are likely to be bought because the market is oversold and the VIX spike can signal a bottom.
He expects gap-down weakness to be a buying opportunity for short-term traders.
Small caps and micro caps are leading in a way that looks more like late-cycle froth than a healthy broadening of the rally.
He cites prior episodes where a small-cap push preceded broader weakness.
How much lower does this gap have to go before you see it as a buying opportunity?
Chris doesn't buy dips himself since he's long the market, but notes the NASDAQ is technically oversold which is a short-term buying opportunity for a short-term trader. He'd buy into the gap on Tuesday and see how it recovers.
Do you think there's probably going to be a rotation away from equities into something else in 2026?
Chris sees small caps and micro caps leading the way, which he views as a potential bearish sign rather than bullish, noting a similar pattern before a prior bear market. He thinks metals, stocks, and most assets could end the year lower, with the dollar holding value. He views the precious metals and small cap frenzy as a feeding-frenzy top signal, and real estate REITs picking up speed as another sign of a major turning point potentially weeks away.
Why would you trade based on thematic or macro issues instead of charts?
He says he never does; he follows price and pure technicals because price usually leads the news. He argues macro fears like country collapse are unpredictable and can push traders into emotionally driven decisions.
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