Silver Targets Explosive Highs: Chris Vermeulen

Hello again from Sprott Money, SprottMoney.com. It's the month of December. It's time for your precious metals update. And these are the projections that we like to talk about with Chris Vermeulen of the TechnicalTraders.com. Chris comes on every month here early in the month to let you know what he's thinking, where we're headed. And it's always valuable to get his impressions of how the markets are doing. So Chris, good to see you, my friend.

Chris Vermeulen (00:37)
Yeah, always a pleasure, Greg, and happy holidays.

Craig Hemke (00:40)
Happy holidays to you. I can't believe we're now only like three weeks left in the year and what a crazy year it has been. And to remind everybody again Sprott Money your precious metals dealer not just in Canada but US as well worldwide even. There it is right there on the page shop the holiday gift catalog. Give the gift of sound money this year an ounce of silver maybe a couple grams of gold whatever.

lot better than a tie or the latest video game. Start teaching your kids, grandkids and friends about sound money and what it means this holiday season. Again, SprottMoney.com, go to the shop now tab. You see it right there on that page and do some shopping. Still plenty of time for Santa to crawl down your chimney and bring you some gold and silver, free delivery and insurance. Anything over 500 bucks. So let's get at it. Chris.

lets you and I get at it. It's been a heck of a month. Medals fell sharply after the election of Trump, but it seems like some reality now is finally returning again. And now the medals are moving back up. At your business, thetechnicaltraders.com, you focus on everything though. However, you always talk about the best asset now as we sit here on the morning of December the 9th. What is the best asset now?

Chris Vermeulen (01:59)
Yeah, good question. Let's let's dive right into the chart. So if we take a look at the best assets right now on our hot list, we can see near the top of the list. We've got the ARK ETFs. We've got Bitcoin, blockchain, consumer discretionary, clean energy, really all of the things that did exceptionally well during the covid bubble where everybody was in that kind of feeding frenzy blow off top in late 2020 and early 2021.

And so money's starting to pile back in. Now, they're down today, but overall that money is moving into these small caps. Of course, when Trump got in, you and I were talking right around that point and these small cap stock took off huge, up about 6 % after Trump got in. And so we're seeing definitely money wanting to go into these growth high potential companies and people are really putting risk on. They have FOMO, they're jumping in.

which we're seeing in the VIX. The VIX is very low and as they say when the VIX is low, it's time to go because people aren't fearful. So today, as we talk about it, the top performing sectors are all negative pretty sharply today, down two to 3 % and we're seeing the defensive plays move higher. We're seeing gold, silver and miners taking that kind of leadership role in moving higher. So, you know, when we look at the ARK ETFs, they have had a very strong run.

since this market kind of turned green back in September, we've seen a big move up. Now I think we're starting to see a little bit of the market kind of exhaustion phase. And I think this is that time of year where seasonality wise when we look at the SP 500 or the market in general, oops, let me just pull this up. We usually have a pullback this last month here in December, we see a bit of a pullback.

Kind of right about now where we are and I think that's what we're starting to see and it's nice to see stocks pulling back and gold moving up So I believe we're gonna see the precious metal space do very well Into the end of the year and so even if stocks continue to show signs of strength or weakness I think gold is going to continue to move up because we're in that favorable space So right now like it's just a sharp pullback in the small cap space But I still think they're gonna go higher into the end of the year

Craig Hemke (04:11)
You like to show that seasonality chart. I seem like about every other month we pull it up. If you've got it handy for gold, please show it again. You know, this is something I wrote about this last week in my weekly article for Sprott. Just go to SproutMoney.com, hit the insights tab and scroll down. December and January are the third and second best months of the year. And traditionally for gold, we get a little Santa Claus rally perhaps. Maybe you can talk about that seasonality for a second.

Chris Vermeulen (04:39)
Yeah, I mean the seasonality for gold is very bullish right here. As you can see, we're probably right down at this low. So we should see the next two to three weeks upside rising tide environment for gold, silver and miners. I also, think we're kind of coming into the overall, the end of a major cycle. Now I thought the market's been going to top a long time ago, continues to get kicked down the road. I feel like January is going to be very, very important for the overall equities market.

And this is at that time in this stage where I think we're going to see precious metals do very well. We're going to see gold more so than silver and miners perform really well. I think going into December and January and I think January is going to be a very difficult month for stocks. I think it's going to be volatile. And when the soon as the market becomes volatile, we're going to see gold and silver and miners probably want to continue to move higher and potentially poke to some nominal new highs. I don't think it's going to be a huge rally.

But I think we're gonna see gold want to move up. again, that seasonality chart just shows we should see a fairly decent rally for the next two months, which is December and January.

Craig Hemke (05:47)
Speaking of seasonality, this is the time of year, especially in Canada, where we get this tax loss selling. Usually seems to wrap up by about the 15th, 18th of the month, maybe the 20th. I don't know, depending on when you bought mining shares this year, whether you've got losses or not that you want to realize to place them against your gains. But nonetheless, it's a pretty consistent pattern. So let's start with the GDX as a proxy for that sector, Chris.

You know if we do get this kind of year-end rally, you know can certainly see where higher prices and the metals would get people started thinking about the fourth quarter earnings That'll begin in late January all that kind of stuff If someone were just simply to follow the GDX and use it as a proxy for the sector What are some levels people should watch into your end?

Chris Vermeulen (06:35)
Yeah, so the GDX, let's just, if we take a look at the short term, the short term chart is technically down right now. There's a lot of damage that was done over the past two months. It has had a nice little pop and bounce. You could argue here it's built a little bull flag stuck under the 20 day moving average. Now it's starting that leg up. So I'm starting to get excited about the miner space. We have a rally, a bull flag and it's starting to move up. So I think it could go up to about this $40 per mark for GDX.

It's a whole number. It's about the measured move based on this bull flag pattern. And if we draw a line right across here, you can see it's been a pretty significant pivot area where price has been stuck at it above it or below it. So once it builds, once it gets to that level, if it pauses and pulls back from here and builds another like little launch pad, then I think we've got a series of higher lows, higher highs, and I think it could go back up for a double top somewhere up to about 44.

So there's some pretty good potential. There's, 10 plus percent from where it is right now. And even if it, you were to allow it to build out a more strong pattern and actually confirm this trend is up, it still has about a 10 % potential upside into the end of the year, into January. So I it from that perspective, but right now it is stuck under this, under the 50 day moving average or flirting with it as you and I are speaking right now. And it's just trying to turn around.

But again, we've seen that volume be very favorable. We saw heavy volume selling, people got shaken out, and now we're seeing it move higher on all the spikes in volume here are green now. So people are accumulating and on average volume is kind of fading down, is a good thing. Volume likes to go up on light volume. And when there's big volume spikes to the upside, that's just showing that there are extra buyers moving in and accumulating positions.

Craig Hemke (08:26)
I've noticed that intraday as well, a lot of green daily candles, which means you're closing higher than where you're open. You could be down on the day and still have a green candle because prices rallied during the session. And that's kind of an accumulation as well when we see that. Is that right? OK, so we'll watch that $40 level at least to begin with, or as we go into the end of the year, $40 in GDX. That sound about right?

Chris Vermeulen (08:41)
Yep, yeah, for sure.

Mm-hmm.

Yeah, I'd say I think it's got potential to work its way back up to about 44. So I think there's quite a bit of upside potential.

Craig Hemke (08:56)
Great. Yeah, and again, that's consistent with the pattern. I've seen weeks in GDX like that last week of the year where it goes up 10 % in a week, and then that carries over to January. So folks, if you're in the mining shares, keep that calendar in your mind, the seasonality in your mind, and see how things go in these final three weeks. Let's look at the metals then specifically. Chris, I don't know, I guess we'll start with gold. Again, came down sharply, shook a lot of folks out.

Chris Vermeulen (09:06)
Yeah, yeah.

Craig Hemke (09:25)
I remember talking to you last week, last month, it seemed like a number of factors contributed to wash gold back in, rally in the dollar index, pull back in the bond market, this kind of get out of gold, get into Bitcoin trade kind of hurt things as well. But now, you know, we're starting to recover, make a move on that 50-day moving average. What do you see?

Chris Vermeulen (09:47)
Yeah, mean, gold has got a very strong chart pattern. You can go back to the monthly chart. It's still in a very strong uptrend. It's bullish. Just on this daily chart, you can see you have these big runs, you have a pause, we've got a big run, and now it's pausing. So this whole consolidation, this whole price action here is very bullish still. Short term, it kind of pulled down. It's actually kind of done what gold miners have done. It's kind of flirting with the 20 day and the 50 day trading sideways.

miners have already broken this high from a little while ago. So miners are leading the way, which is a bullish sign. Generally, we want to see miners break out first of a bullish chart pattern and then gold will follow. I definitely feel like this is seasonality time, but the characteristics of how gold miners are moving are telling us a gold should move back up. And I think we're going to see it go back up to this 2800 and maybe even pierced nominal new highs. Again, we're not only on like a major super cycle kind of

Cycle where gold should perform really well, no matter if stocks go up or down. There's I think there's global fear rising That's why we've seen gold have this Massive rally that you and I have talked about a few times on the monthly chart where it broke out of this huge multi-year pause Well, every other asset went into a bubble and took off now everything is kind of struggling and gold is taking off So we're in this very strong environment where gold could come up push to 2800 maybe a little bit higher

that defensive play and it doesn't really matter what the stock market does. There'll be bouts of selling where money comes out of aggressive stocks like today and out of Bitcoin and they go into gold and then vice versa but overall net we should see gold continue to hold its value and grind its way up no really no matter what the market does I think.

Craig Hemke (11:31)
Certainly has been a heck of a year and by finishing strong, I mean, we're going to be pushing 25, maybe even 30 % higher on the year, which is one of the best years I can recall. And that you would think would serve to add some momentum into January. Let's wrap up Chris with silver because that's the thing that could definitely get some momentum into January. And I'm sure a lot of folks, know, here I send people to the holiday gift guide, it's brought money in there, they think, well, okay.

Chris Vermeulen (11:41)
Yeah, it's pretty good.

Yeah.

Craig Hemke (11:58)
Is $32 or $33 a good price for silver? Could it pull back from here and I could save a few bucks? What do you see in the short term? And then we'll get into the long

Chris Vermeulen (12:09)
Yeah, I mean, I think we're gonna see the precious metal space as a whole kind of do the same thing. Now silver, you know, when we look at what gold was doing, if I was to draw the kind of gold chart down below, gold's pulled back, it rallied up, and it's kind of trading like right here. Gold miners pulled back, they rallied up, and they're already breaking above this high, they're already breaking out. And silver's carved out this bottom.

Craig Hemke (12:24)
Yeah.

Chris Vermeulen (12:32)
it's already broken this little bottom and this tight bull flag and it's extending. So silver is actually like leading the charge and then miners and then gold. So silver looks really good. Of course, it moves very quickly and I think we're going to go back up to this 35 range when we look at the monthly chart and get a big picture of where all that could lead to. I think again, we're going to go back up to these highs that we saw over here around 3550, 36.

somewhere in this range and pierce these highs. think all of these precious metals pockets are going to do the same thing. Gold, silver and minor. So I'm expecting another another push of four bucks, maybe to the upside, maybe even a little bit more. Maybe it'll want to push up and break this high and go up to this other candle high around thirty seven sixty somewhere. So again, there's there's good upside. This is that time of year to to I think play it. Not only is the trend up.

but all of them are confirming. got silver, gold, and miners, plus seasonality, and all these things come together for a pretty nice holiday trade, really.

Craig Hemke (13:40)
Yeah. All right. So as we wrap up, I have a hard time finding an annual chart. Do you think you can make an annual chart out of that thing?

Chris Vermeulen (13:48)
Let's see here.

Craig Hemke (13:49)
Let's find out because this is a point I've been, it looks like it to me. Okay, brother. This is the one I wanted to show everybody. I'm gonna have you send me that if you will, because I need to have that copy of myself going into the end of the year. This is the one I want everybody to see. know, Chris, you and I talked about it earlier this year, know, when gold broke out on the monthly chart and then the quarterly chart. It's those long-term charts that get the secularists involved, the generalists, you know, the home offices, the institutions.

Chris Vermeulen (13:59)
Sure.

Craig Hemke (14:18)
The daily chart gets you and I excited, but it's that long-term stuff is where the big money moves. Look at that. We might be closing in on the highest annual close ever. What do make of that?

Chris Vermeulen (14:29)
I know, yeah, it's really exciting. this pattern kind of over here kind of almost reminds me of the Bitcoin chart pattern, but on the monthly basis, super bullish. we could draw a few things. Obviously, we've got a huge potential. You could say this is like a massive cup and handle pattern. Over here, we've got this big rally up and this tight bull flag, and now it's breaking out above this high, pointing to much higher pricing.

Craig Hemke (14:46)
Mm-hmm.

Chris Vermeulen (14:57)
Cup and handle patterns, especially one this big, can lead to pretty explosive moves. They can be two to three to 400 times the depth of the cup. So if we were to just take this depth of this cup, depending where you take it, you can stack it on, and of course, it puts silver way, way up there. So the yearly chart is very, very bullish, especially if we close at this highest level ever. That means it's breaking out on a yearly basis.

Craig Hemke (15:14)
He

Chris Vermeulen (15:25)
Yeah, I mean, you can't go wrong. don't think long term of precious metals are going to be exceptionally well. I love physical metal. I own a lot. I'm hoping we get a pullback next year. Maybe we break out and blow a little higher here for gold and silver. But I am hoping we see a bit of weakness come 2025 when there's hopefully the markets have a correction across the board and almost all asset classes for that last opportunity. So silver breaks out.

And then a pause or small pullback from there will be like the ultimate accumulation point. Or just from this perspective, it's like hop in and anticipate like another five or six years from now, it should just keep going up as a long-term investment. But it's very bullish. I mean, it's bringing you to like $80 an ounce easy if we were to really see this break and pop.

Craig Hemke (16:04)
that.

Pretty remarkable, isn't it? Again, so when we're sitting here talking about what are levels to watch, that annual close in 79 and the annual close in 2011 are pretty close to each other by my eye. Can you give an actual number there on those big green candles and those highs? What is that, about 30?

Chris Vermeulen (16:31)
Yeah, so that's around 30, 31, 20, in there, which we're well above it. And so this is a really good sign. And of course, we got really strong volume. We've got strong volume on the downside. The big, big up bars are all green, right? So people are accumulating. People have been accumulating and stacking silver forever. And this could be like, you know, one of these huge green bars next year where it just blows up and takes off when all hell kind of breaks loose.

Craig Hemke (16:37)
Yeah, we are.

Chris Vermeulen (17:00)
which is pretty exciting. So I think it's got a lot of potential from a long-term perspective and silver is very, very explosive.

Craig Hemke (17:09)
And you think, yet again, nobody owns it except kooks like you and I, right? We see this. No, no.

Chris Vermeulen (17:14)
Yeah, nobody owns gold and silver really. mean, everybody, it's such a tiny percentage of portfolios right now. It's like a third, a third of everybody's percent, not a third, a third of a percent, like not even a percent of somebody's portfolio is in this, right? So it's, yeah, it's so much people once they start moving in is gonna send this parabolic. And once it starts to rally and hits these all time highs, there's no real sellers up there. Nobody's gonna wanna sell it, which is what creates that parabolic.

Craig Hemke (17:20)
Right.

Yes. Right.

Chris Vermeulen (17:43)
surge, right? It's just FOMO driving it up, just sucking it up.

Craig Hemke (17:45)
Yeah. It reminds me, was a good couple of years ago, that guy from Guggenheim, and I forget his name now, and he passed away, unfortunately, but he was at Davos or whatever the big shindig in Switzerland that's usually in January, and he surprised the CNBC crowd by saying, yeah, I think we should get in silver because nobody owns it. And again, I think that helped a little bit of a rally back then. But that chart, in an asset that

nobody owns besides us and the people watching. You see that breakout on an annual basis. That's the kind of thing that could drive some real flows of funds next year. So what'd you say, 3120? Is that what that level was?

Chris Vermeulen (18:31)
3120, if we close above that, that is like a new all-time high close.

Craig Hemke (18:36)
Okay, New Year's Eve, we got three weeks to hold on and see if we can pull this off.

Chris Vermeulen (18:40)
Yeah, I think it'll do it. think it's gonna, think we're gonna see the metal space do very well for the next few weeks.

Craig Hemke (18:47)
Let's do it. All right. So let's make that the first chart we check out when we get back together for the January Precious Metals Projections. That sound like a deal? All right, Chris. Merry Christmas, Happy Holidays, Happy New Year, all that kind of stuff. Thank you for, I mean, we've done 12 of these this year and they're always very helpful. So thanks for all you do. And again, everybody, Chris at thetechnicaltraders.com if you want some help personally, individually with.

Chris Vermeulen (18:54)
All right, sounds like a deal.

Craig Hemke (19:16)
with your trading, Chris is somebody you want to check out. Chris, again, thank you.

Chris Vermeulen (19:21)
Thanks, Craig. Always a pleasure and happy holidays, everyone.

Craig Hemke (19:24)
and from all of us Sprott Money, SprottMoney.com more to come still this month including a special guest. I wonder who that might be Santa Claus himself well he does have a big white beard now and he does live in Canada up north so you can begin to fill in the blanks perhaps keep an eye on this channel subscribe like whatever so you're notified should Santa stop by sometime in the next couple weeks you're gonna want to hear from him but for now it's time to go again thank you Chris thanks everybody for Sprott Money and keep an eye on this channel for more content to come in December.