‘Calm Before The Storm’: Violent Break Ahead, Here's What Moves First | Chris Vermeulen

**David Lin** (0:00)
It's Friday, August 31st, and markets are continuing to slide. The S&P and the Nasdaq are both down about half a percent. Each gold is continuing to go down one percent. Bitcoin is down more than one percent on the day. Treasury yields are up, especially the 10-year and 30-year. The 30-year is up one percent. What's happening? Chris Vermeulen, Chief Market Strategist at the technicaltraders.com is here to break down what is happening now and what's going to happen next. Importantly, gold and Bitcoin have been selling off since their highs last week, ever since Kevin Warsh fetched here. Kevin Warsh made a speech at Jackson Hole, indicating that a September rate hike may be on the table. Is gold going to outperform Bitcoin or the other way around by the end of the year? Well, that's a trade actually on Kalshi. You can actually place a trade on this exact scenario. Will Bitcoin outperform gold this year? Traders are predicting a 27 percent chance that Bitcoin will outperform gold by the end of the year. If you agree with markets, a $50 trade can yield a payoff of $169 if you're right and Bitcoin does top gold in year to day performance by the end of the year.
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More on that later. Welcome back, Chris. Good to see you again.

**Chris Vermeulen** (1:36)
Yeah, thanks for having me, David. And yeah, it's been a pretty wild few days with the news that came out last week, so should be interesting.

**David Lin** (1:42)
Talk about this news. Let's talk about your current sentiment. This CNBC article roughly supports what you told me off-line, which is that we're in this suspense mode. So this is Mike Santoli of CNBC. It markets us in movies, he said. Suspense builds through the slow, quiet scenes of the second act.
Given all this, I'd argue the reason to be alert now is not purely the turn of the month, but the fact that much like the S&P and the semis in August, various key metrics, market metrics are colliding or coiling, rather, near consequential thresholds, which, if they're crossed, could imply a change in market character.
The VIX index has slipped below 15, appropriately so, given the passive recent range in the clockwork mechanics of sector rotation and low correlation restraining index level volatility. You told me offline that we're kind of in this limbo mode, or suspense mode, he called it suspense mode, you called it limbo mode, but markets are watching for key metrics to collide, which is roughly what he said. What are you watching for? That's going to move the markets one way or another.

**Chris Vermeulen** (2:55)
Yeah, well, we'll pull up the charts and I'll kind of show you a visual of kind of what's going on. So when we take a look as the market has been going in limbo, we had obviously a very strong explosive move about a month ago.
And since then, the market really has just traded sideways. This is the S&P 500 If we look at the Nasdaq, it's pretty much the same thing. We had a very explosive move and it really is just trading sideways. Now there's been a bunch of news out there. And this is the market just digesting that big move and it's coiling. The longer something trades sideways, it's building up pressure. It's building up kind of momentum or not momentum, but pressure to go. It's kind of like the calm before the storm. Now, the trend for the equities market is still to the upside. We're definitely climbing this wall of worry. We're seeing investors get nervous. Semiconductors have been pulling back and they actually still have a fairly bullish chart pattern.
Most of the equities do here. So overall, we're just kind of waiting to see where this the equities market is going to pop and people are, you know, there's been some negative sentiment. And that's why we've been seeing money move away. I think from the market participants on average, the kind of the masses have been moving out, which is why it's been dragging sideways. And the excitement's really been in the precious metal space. So people have just really focused with the whole thing going on with the yields and really starting to spike and break out. It's really focused people on the precious metals pocket. So I think we're seeing precious metals start to like kind of run into resistance. I think we're going to start to see the equities market pick up and start another leg higher here over the next, potentially even this week.