Why NVIDIA Will Crash 70%, Bring Down Market; ‘I’m 6 Months Early’ Says Gareth Soloway

Why NVIDIA Will Crash 70%, Bring Down Market; ‘I’m 6 Months Early’ Says Gareth Soloway

and that’s why in my opinion ultimately you’ll see the ultimate outcome which is probably honestly a 70% 75% correction in Nvidia over the next couple years you know what let’s address some of the hater comments one of the comments is you’re early on your shorts the timing is wrong um but you’re still sticking to it your conviction is high how do you respond to that yeah so so the the absolutely correct so definitely early on it um I think that’s part of being you know a Trader investor you see the future and you start positioning yourself ahead um just a good analogy or actually a good point point I had some people that I was trading money for back in ‘ 07 I warned them in early to mid 07 to be exiting the market in full uh we didn’t start to decline until early 08 and so I was about 6 to8 months early there I’m probably 6 to8 months early here as well Gareth Solway returns he is a chief Market strategist at verified investing.com and we’ll be getting his monthly updates welcome back to the show Gareth hey thanks so much David you know it’s always great for me to be here I love our conversations yeah I I I love it when you’re back lots to discuss this uh last time you you on I want to start by talking about this Divergence that’s been happening between the S&P 500 sectors and the broad index since last time you were on since the beginning of June Gareth you can see that of the 10 sectors of the S&P eight of them have been diverging away from the S&P 500 uh I was telling you offline the tech sector is the only sector year to date that’s been beating the S&P all the other sectors have lagged in particular the last month you can see this really big Divergence away from the main sector I guess it’s mainly driven by Tech uh what’s your read on this as a Trader what do you do when all the other sectors break away from the main index and the only sector that’s kind of leading the pack and outperforming is Tech yeah and this is something that’s very concerning and I’m going to show this screen here this uh this chart this is the equal weight S&P versus the S&P itself and what’s so concerning here and you just brought it up is that we have the S&P which is up 14.35% year to date the equal weight is up only 3.42 and what this tells us is that there’s this massive Divergence occurring where the mega caps the microsofts the apples the envidias have really just taken over control they’ve dominated to the point and what this is telling us is that so many of the other companies in the S&P are actually down like think about this if you just throw those Tech names those semiconductors those those big names like Microsoft and Apple in this if you took those out the S&P would be here at 3.42% or even lower maybe even negative for the year and what that tells us is that that all the money flow is going into these names and it puts the market at extreme risk and historically when you see this it is not good news for the next six to 12 months can you just maybe make the argument that let’s just overweight Tech close your eyes and go away I’ve seen those in my comments some of my videos right I mean if it’s if it’s the market leader why not just stay with the leader that’s one argument well and and that’s the key right is you could say let’s do that and a lot of people are choosing to do that remember remember the bigger these companies get the more dominant in the S&P when you put a dollar in the S&P now basically you have six companies that are eating up 35 cents of that dollar and so when you’re talking about these these these ETFs that track the S&P money just keeps flowing in because if people are putting them into these ETFs these tracking ETFs the S&P it’s going into these names and and it what it does is it overweights but the problem is this if you go back to 1999 you saw the same thing happening and what happened to the NASDAQ it dropped what 65% when we saw the tech bubble collapse and so when you rely on too many of these companies number one it tells us that the underlying economy has a lot of problems and number two there’s always a reversion trade at some point where people get too greedy and then at some point the fear comes in on these names and that’s what I I I do worry is going to happen okay another way to look at it is perhaps overweight some of the underperforming sectors right now because they’re undervalued perhaps on a relative valuation basis or overrate something like the uh Russell 2000 which has been lagy behind the large caps what do you think yeah I I think that’s one way to do it in the very least it’s the redistribution right it’s it’s selling some of the money I mean if you have an over allocation now in certain stocks because of their massive gains you want to kind of pair that back and maybe distribute it through some of the other names like there are some really high value names like a zoom uh Zoom video communication Tech we’re using it right now and if you look at the forward PE it’s trading at a 10 PE and then you look at some of the other names out there like a Microsoft or and you’re in the 30s to 40 plus PE ratio and again the key is if the growth rate of those names continues awesome then they’re going to continue to lead the problem is can Will Nvidia continually grow by x amount that it’s been growing and and we know the law of large numbers right I mean Cisco Systems was a great example of this they were the main builder of the internet back in 99 2000 they have never reached those former highs and I do worry that we’re in the same repetitive kind of signature here that we’re in with Nvidia before we continue with the video I’d like to tell you about the precious metal sector now gold as you know a hit record highs in 2024 so the question on everybody’s Minds is what should we be following and tracking in relation to Gold while 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 timens mining camp and the Colac 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 stlr gold.com David Lin in the link down below or scan the QR code here where David Lyn viewers can sign up for their macro gold newsletter to get inside knowledge and updates for free let’s take a look at Nvidia now before we’re talk about the economy and the other uh asset classes Nvidia has reached a new all-time high not too long ago and it’s been retracing ever since it has at one point very briefly surpassed all the other companies to become the most valuable company in the world ahead of Apple Microsoft and pretty much everything else and and then after that it’s uh down about 133% or 14% depending the day uh so let’s take a look at the charts for NVIDIA and what you see there yeah so so flipping to Nvidia right here we see that number one we got a reversal Candle on the daily chart and this is a powerful signal where you Gap higher you make a new all-time high and you actually close sharply lower on the day we then had follow through for two consecutive days and essentially what has happened now is you’re making what’s called a bare flag now just to take you back to history and we always like to do this and this is what verified investing and myself are all about I’m all about data right well if we look back at the previous move this was an up move on Nvidia we got the same Gap up and reversal day we kind of chopped sideways and then we had as much as a 20% correction before the latest run began and so these candle formations these reversal candles here which we had here for a 20% correction you have to take them seriously when they come in on a technical analysis basis so I’m in the camp that listen everyone expects the world from Nvidia just like they did for Cisco in 1999 and 2000 and the problem is is that other other companies are already starting to develop chips now does Nvidia have a huge Advantage right now yes but that Advantage will narrow over time eventually it did for Cisco Systems and ultimately we know what happened there and by the way one other amazing stat is when the company when a company is the biggest market cap company in the US like Cisco was in in 1999 2000 it got as far as 80% above its 200 moving average Nvidia just surpassed that 200 100% % above its 200 moving average when it was the biggest company in the stock market that again to me is a warning sign on a technical analysis basis okay uh but why why are we comparing uh Cisco with Nvidia they’re different companies different different business models um products good point good point so the reason you compare them is because Manas are Manas whether it’s the solar Manan ‘ 07 that saw First Solar rocket up a th% or whether it’s Cisco in 1999 or whether it’s the 3D remember the 3D printing stocks I don’t know about if you’re if you’re if you were watching back then David but they had this insane run and then they collapsed back down and so human nature doesn’t change this is why GameStop runs on hype and then gets crushed back down greed and fear rule the markets and so it’s not it almost has less to do with the the technology right the technology of AI you could compare it to the internet right it’s going to change our lives it’s going to be Monumental and it will be but it doesn’t stop the Mania from taking things up Bitcoin at 69,000 was a Mania it corrected to 15,000 so Manas are based off of human nature it’s it’s actually why psychology and investing and trading is so so important and that’s why in my opinion ultimately you’ll see the ultimate outcome which is probably honestly a 70% 75% correction in Nvidia over the next couple years that’s assuming that the fundamentals don’t hold up and the company doesn’t continue to outperform uh with their earnings and uh everything else well and the question is this is the one thing I would just say about that is like people need to use common sense they’ve gotten way a whack here CU it’s a Mania and it’s like okay they absolutely are crushing it right now and they will probably crush it for the next 3 six months but the key is are literally no competitors going to ever compete with them and the answer is of course other competitors will and our margin’s going to stay at 77% when they can sell a chip for 30 or $40,000 you telling me margins are going to remain at 77% like they have the last few quarters the answer is no not even close and that’s assuming that we don’t see slowdowns in data centers right I mean the economy clearly weakening at this point all of these are just things that Common Sense tells us but people don’t want to believe them right now didn’t Sam Altman just create uh a new version of chat gbt whereby uh it’s intelligent enough to come up with a business model and I think he made a presentation so sort of a morphous but it is a business so I’m just wondering like eventually is the idea to kind of like license technologies will you have customers you’re going to be customizing algorithms for them or how how is it going to work you know the honest answer is we have no idea we we have never made any Revenue we have no current plans to make Revenue we have no idea how we may one day generate Revenue we have made a soft promise to investors that once we’ve build this sort of generally intelligent system basically we will ask it to figure out a way to generate an investment return for you it sounds like an episode of Silicon Valley it really does I get it I I I you can laugh it’s all right I I really I pray it’s that easy for all of us if we can just be like hey AI make a good business run it for me I’ll sit back myself and never trade again I’ll just let the AI trade for me we don’t want that now G we want you to be trading for us and helping us with uh uh helping us with some guidance here speaking of guidance all right thank you for that Nidia take let’s talk about the economy now what are some of the major data releases you’re looking forward to this week yeah so number one is tomorrow morning Tuesday morning at 8 at 9:30 a.m. Jerome Powell speaks that’s going to be looked at as a cue for what these job numbers are going to tell us he probably already has the jobs numbers is he going to be hawkish is he going to be a little doish that speech will be a big deal and then what what the the next report that I’m looking for is 10:00 in the morning on Tuesday that’s the jolts numbers job openings data and that number will be very important we’ve seen it really start to come in precipitously here down to I think about 8 million job openings from 12 million in 2022 now historically that’s still above where we were in 2007 before the financial crisis but if if the the number comes below 8 million you now start to get into a reasonable longer term Zone where then you can start to say okay it’s not that easy for people to find jobs and by the way just some on the ground analysis I’ve talked to people I I have people that I’ve been talking to that are looking for jobs and they said they they’ve applied at least here in Florida to literally 20 30 40 50 jobs and they’re not even getting call backs so things are slowing here there’s no doubt about it what about the last month it apparently the economy added something like 272,000 jobs more than expected however at the same time the unemployment rate also ticked up uh once’s your read on the economy adding more jobs but also uh more people getting laid off or losing their jobs or just leaving the labor force thus adding to the unemployment rate at the same time yeah so I would I would encourage people to start looking into the underlying what jobs are being added because I think they’re they’re lower income and they’re part-time and so this is something that the media is not talking about out there you’re you’re awesome enough to kind of bring it to the Forefront and let me express it to people but if you look at the government the government continues to hire that’s been one of the major driving forces for the economy in terms of adding jobs and then if you look at full-time work versus part-time work part-time work has been going Skyhigh in terms of adding jobs but full-time jobs are actually in Decline and so these are all precursors if you look at any of the past you know recession periods this is all a precursor to a recession to a big slowdown and I think Jerome P’s very aware of that but he can’t give an inch right now because you have a scenario where the stock market’s at all-time highs and inflation is still north of 3% so he has to tow the line he has to play it the hard ball way um but ultimately they’re very aware that things are slowing very quickly they just can’t say the pivot very quickly here and by the way I even worry about deflation I even think I was in the camp for the longest time that we come down to 3% and kind of hold it there but I actually think that we’re in a position now where we could actually be seeing deflation and you can only go as far as I mean just go simply as far as looking at some of these charts I don’t know if youve looked at like the wheat chart recently the nickel chart but some of these charts are just downright scary let me bring up the nickel chart for you guys the decline on nickel just in the last 6 weeks 21% if we look at other things I mean oil is holding up but I heard there was a lot of shorts on the institutional side that are covering so I think that’s part of it but then if we go to the wheat chart I mean these charts have just come crashing down and I do worry that we’re actually in for a deflationary period starting not until probably 2025 but if you take the stock Market down 20% plus these Commodities I think you’re looking at deflation you know I’ve heard a lot of people tell me that well the US debt level is rising the deficit level is projected to also increase per this Congressional budget office CBO and thus the inflation rate will eventually pick back up at some point in the future uh this is more of a longer term Trend I just like it to evaluate this and see if you agree or disagree with the notion that just because we have a lot of debt inflation will not go away no yeah so so this is the kicker this is how I see it is that you do have pockets of deflation my biggest concern and this is something that I’m literally keeps me up at night thinking about is that you have a government that doesn’t know how to reign in spending and you have a Federal Reserve that every crisis looks for a reason why they can drop interest rates dramatically to stimulate the the the economy and also adds literally trillions of dollars to their balance sheet and so any sort of deflation is going to give the green light unfortunately to these entities to just go back printing printing Printing and this is how you get to the max pain level where the debt of the US literally will cause a major you know even potentially hyperinflation scenario in the future now I’m gaming this out this is my job right is I’m a Trader I look at what’s happening today but I also look at what’s happening next month next year next decade and I do worry that if we do see disl dis or in deflation it’s going to be the trigger for all of these entities to say oh look we have deflation let’s just print more money and that ultimately makes our bed that we’re going to have to lay in down the line you know what’s crazy if you go to the New York fed um website and you look at the probability of us recession predicted by treasury spread I’ll put this on the screen for my viewers but you can do it yourself if you’re watching this just look up probability of us recession New York fed it’s at 52% now it was at 70% last year but it’s at above 50% for more than a year now that is the highest level since 1981 that is much higher than 2007 it’s much higher than 2008 it’s just I I just find it bizarre that during 2008 when we had a big recession the probability of recession as indicated by this particular uh treasury spread by the New York Fed was only 50% or actually no 40% so yeah technically speaking we are at a much higher chance of a recession than even before and it’s just not happening yeah right I know you’re right about but the thing is and this and this can be argued and I think probably some of your other guests have talked about this is that one of the reasons why the recession has taken so long long to come and it will come folks I’m telling you right now it is going to come in fact I’ll argue in a second why I think about half if not two-thirds of the countries already in recession but basically what you have is a scenario where the FED has has yes tightened Economic Policy quite a bit but they haven’t really all gone away in 2023 of March they created a lending program for banks that were failing which was basically unlimited amounts of funds if you were a bank that was at risk of failing more money into the system Banks said Hey listen you know yes this was an emergency lending program but we don’t have to have an emergency to use this money so let’s use it and make money off of it push it into the system in addition you have scenarios where the government you can argue that the government’s spending has been negating some of the FED fiscal responsibility or pullbacks on on things like like again monetary policy and so forth so these kind of combinations have made it longer in terms of coming but it will come and I want to show you this David this freaks me out here I know this is something I wrote about this weekend and this this is a headline of on verified investing.com but shocking 401 k plans saw a 40% increase in the last 12 months of hardship withdrawals now again does that sound like the econom is great when it’s jumping 40% and in fact from 2021 it’s up 100% that’s hardship withdrawals folks you don’t want to be going into your 401k unless you absolutely have to the reason people were going into it the majority reason was because they needed to save their house from going into foreclosure again if the economy is so great and everyone’s making a lot of money I’m not sure where that comes about another stat here and I have a chart of this is 90day delinquencies on credit cards are now higher than they were pre2 2008 all right again this is by the way as of the last quarter not as of Friday this previous second quarter end so I expect that number to be up even more and so the problem is you’re getting a scenario where the the economy has diverged you have the wealthy that have lots of Investments or money that are in you know essentially let’s say um savings plans making 5% if you have a bon making 5% you’re doing just fine if you have a billion in the market you’re doing just fine even if you have a few million you’re probably doing fine but the thing is that’s only a small percentage of the US everyone else is already struggling to get by with inflation and obviously the cost of housing so things are tough out there right now and it’s it’s again this is the scenario that all you need is a stock market to correct let’s say 15 or or 20% and that top consumer the ones that have Investments they’re going to pull back they’ve been keeping this economy going for the for the time being they will pull back on spending and we’ll be in a full-fledged recession I got a few counter arguments that first you were traveling this weekend honesty now based on your personal observation does it feel like a recession out there well if you’re in Vegas in the bubble no you’re right it doesn’t um I mean it was packed in Vegas I was in Vegas right but I will say this is that if you go to other places and by the way I will mention this is the grumblings in Vegas were there all right so people were still spending because they’re on vacation right they’re getting away they’re saying hey I’m here for 3 Days that’s what I did I was there for 3 Days let’s get a cabana let’s do this let’s you know let’s have a good time but was I shocked when a burger and fries that basically was one grade up from McDonald’s at some of these hotels was $35 I mean that’s insane and and it’s certainly I mean I have the money but it wasn’t like I was happily paying it it was ridiculous and now someone else that has less money I mean that’s that’s hard that’s ridiculous okay I like to know where you were staying at where the burer was only one step up from I was I was at MGM MGM Grand but I mean that’s a nice hotel okay look at but that’s true and listen but I mean that’s the casino that’s the strip right there and it’s the prices were insane check this out though the TSA checkpoint travel numbers I’m putting pulling this up uh June 30th uh 2.8 million it’s up from last year every single day this year since basically uh well I’m just going back to as many quarters as I can this year it seems to be doing better than last year more travel activity more volume of people at the TSA checkpoint I don’t know if they’re traveling for leisure or business but either way travel’s picking up um is that an indicator of anything to you well so so number one you could say okay yes the travel numbers are pick picking up but then why had why in the latest quarter did Expedia and I have the chart here Expedia literally collapsed 20 30% on earnings it has rallied back but now it’s starting to turn back down so so travel companies where they’re booking vacations and this might be to your point maybe it’s more business travel that’s going on here because a lot of the travel websites are actually seeing a Slowdown here so your great point and you’re making a good point is that travel you’re right airline travel is doing relatively well but the question is is it being done for for business travel is it because people are back at work and having to travel for business versus staying home or is it actually because people are taking more vacations I’m not seeing the more vacation side of things okay so how you position then in anticipation of your economic Outlook right now yeah so so there’s no doubt I’m actually heavily short the markets right now I do have some Longs out there because I think you have to stay Diversified I I actually am loving uh buy you right now as a long trade now granted it’s a China name so you got to be a little bit on the careful side but if we look at this chart it’s been pounded down I mean this is basically the Google of China from what I know and it’s trading at almost 52- we multi-year lows down here and it just tagged this nice little level of support down here so so I think there are Pockets I I still like the Brazil markets it’s corrected decently down I think you have a lot of Black Swan potential the dollar yen is one of the biggest ones David so I don’t know if you’ve covered this in depth but look at the dollar just broke out above the previous high right here this is where the Japanese Central Bank intervened so they intervened and pushed it down then the US comes out and says hey they’re potentially going to be labeled a currency manipulator because the US doesn’t want to do this and just for your viewers everyone needs to understand that the reason why the US doesn’t want Japan to intervene in the currency markets is because to intervene and strengthen the Yen they have to dump dollars on the open market and they have to dump US debt they’re the biggest holder of US debt if you have more US debt on the open market it pushes interest rates up and that can work against the Federal Reserve in the future so either way it looks like they might have to intervene again though if it continues up like this I’m happy you brought up the G let’s keep that screen up there I heard uh somebody told me last week the fair value should be 140 uh just take a look at the charts is that possible or certainly it certainly is at some point but certainly I mean right now the trend is definitely strong here you’ve broken above so you have a breakout above the previous High I have a target for my intervention uh where I do think that they’ll be forced to intervene the high end of the channel right up here so if we look every time it hits here you get a big selloff right here you got the intervention so I think if you get up to this level here which is right around 163 and change I think the Japanese Central Bank will be forced to intervene and then it’ll be interesting to watch how that is a kind of how does the US react to that intervention because they basically warned Japan not to do it and then by the way not to mention other geopolitical issues but what’s going on in France we’ve seen the CAC actually have a breakdown here I’m going to bring up the CAC chart and I by the way I don’t look at you know other markets that often you know you yeah China and stuff like that but they look at the rollover from this this High here on the CAC the CAC is down significantly basically 10% off of its highs and the Dax which is arguably the more important Market in Germany actually broke a wedge pattern as making a bare flag so that implies further downside to come in in um in Europe in the European Union here so so there’s a lot of things that are hanging out there including Taiwan Russia closing up to to to uh China and then to North Korea but um people continue to say just buy the market and that’s been working up until now I just do caution people that this was the mentality in previous scenarios before big declines the other currencies though you know the Euro let’s just take a look at one more currency pair the euro versus the dollar it looks like the dollar has been strengthening versus the Euro all throughout the year despite the fact that the FED has kept rates well I think that’s probably why right the FED has kept rates High and the euro uh Euro area has just cut rates exactly yeah this interest rate differential is that going to eventually we down the fed and make them think look it’s time to do something about this or do they not care about the currency no no they they they do they will eventually in fact it almost gives them the green flag if everyone else is cutting rates around you it kind of gives you the green flag that you can potentially do that as well and I do think that’s one of the driving forces you know when you had Canada cutting rates the EU cutting rates um you do have what we call in technical analysis a classic wedge pattern on the the euro dollar here and I would just say that in general watch for which way this breaks out so when you get wedge patterns um essentially it’s hard to know which direction they will go but once they break they usually get a big move in that direction so you would basically watch for a breakout or a break down and then watch out in that direction for a big move let’s talk about uh Bitcoin now uh Bitcoin has um uh it’s just been range bound ever since it broke above $74,000 not too long ago and then uh now it’s at 62 so it’s between 62 and 70,000 this range has been going on for a couple months now uh is it going to break out anytime soon do you think so I still expect a little bit more weakness um but I am a mid to long-term bull I think again the more I see what’s going on with the government and the kind of catastrophic spending that has shows literally no side wants to get control of it at this point um and then you look at what the FED is about to do in terms of lowering interest rates I do think eventually more and more people adopt the idea that Bitcoin is that digital source of safety now it’s not right now but one of the positives about Bitcoin is that the volatility has gone down dramatically now if you’re a investor who likes seeing 30% moves in a week you’re not so happy but if you’re someone who looks for a asset like gold but maybe in digital form I do think this brings up a great opportunity for kind of a longer term play now again my only concern here is that we clearly see the stock market have still an influence on bitcoin meaning that if we still see this correction that I do see coming in the stock market then Bitcoin probably goes down at least in the short term um I do have a big level at 50,000 right here this is the former um spot ETF approval High major technical support Downs sloping trend line kind of right here so I think I would start accumulating there but I have to also be fully aware that if we do get into a full-fledged recession and the FED does cut rates now by the way just to interject here everyone says oh when the FED Cuts rates the markets will go higher actually historically it’s the opposite when the FED starts cutting actually is when the Market start going lower so just be aware that if the stock market does roll over 10 15 20% we’re likely headed to 50 and maybe even down lower than that so the basics the basics just to summarize I’m a buyer on weakness of Bitcoin because I’m a long-term bull but I do expect it to get weaker and give me those buying opportunities If the Fed Cuts rates into a weak economy that could be bearish for the Eon for for the stock markets but uh let’s assume let’s just for the sake of argument assume there’s a soft landing and nothing happens and they still rates would that still be bad for stocks so so my guess is if we have a soft Landing there the only thing you get is one or two cuts and the market will eventually not like that per valuation metrics I mean I think the Market’s already factoring in excessive cuts at this point um and also again I would just bring up the former data we looked at in terms of delinquencies in terms of of um hardship loans from 401ks or borrowing from 401ks is that it to me it clearly shows that probably the one thing keeping the economy afloat right now is the stock market and I do worry that once that has any sort of even a 10% correction I think a lot of people would pull back on their spending that have exposure to the stock market because they get worried uh in terms of timing then uh are you tactically long for now like would you stay let’s say writing the momentum for now until you see even more science the economy is turning South so for me I I I’m a leader in terms of I want to get in front of a move so I’ve already shorted the NASDAQ I like I said I do have some Longs a little buo a little a little you know there are Pockets where I want to be Diversified and have some long exposure but I do want to just mention here this is the chart of the NASDAQ 100 and look at this look at this channel this is this is this is again just like we’re looking at remember we just looking at that chart of the dollar Yen had a channel channels are really powerful and they’re not used in technical analysis often but they work and here’s the low from 2020 connected to the low of the recession in TW or the the the bare Market in 2022 and if we stretch a parallel up to this High the high from the bull market of 21 we actually just tagged this High here and to me that would insinuate some sort of drop now is it a small drop of 3 to 5% we don’t know but ultimately I would expect a pullback here and in addition the daily chart put in a topping tail last Friday topping tails are bearish reversal signals so it’s another signal that could tell us we’re on the verge of a pullback last thing I’ll mention David is that the last time we corrected here this this little correction going back to April it was when and this is kind kind of wild it was when we saw a a blackout period for companies just ahead of earnings where they couldn’t buy their own stock back and so here we are literally we just entered a period now where we’re in this blackout period about 50 plus perc of the S&P is now in a blackout period they can’t do share BuyBacks and again notice the the coordination here when companies don’t buy their stock back the stock market doesn’t do so well and it’s another reason we could see a few at least a 3 to 5% correction then we’ll have to see if it expands into more if Nvidia corrects by even 50% not even 70% wouldn’t that take down the rest of the market oh 100% 100% I mean it’s taking the market up and by the way just so everyone’s aware here I just want to show the thesis behind this so now listen you could argue that AI is different than the techn the internet bubble You could argue it that you know there’s always different narratives but what I want to show you here is on Tesla if you go back to the Tesla highs in 2021 what did we do here and let’s do a measurement so if we look at the decline we saw a 7 5% decline in in Tesla before it stabilized off of that bubble high now you can say okay well that’s just Tesla okay well let’s go to Cisco Systems and let’s go to the monthly Cisco Systems chart and let’s go back here to the Chart here of Cisco in the dotcom era what did it drop let’s do a quick drop down here basically you dropped about 85% okay well that’s just one more let’s go to First Solar let’s go to the First Solar bubble in 2007 here what did drop 74% right so there’s this coordination where tends to see these type of Corrections when something gets out of favor now do I think that Nvidia at a 75% discount is a great buy yeah I actually do because what happens is at highs things get overdone because of greed and then fear takes over at the lows and they probably shouldn’t be down that much so they’ll be buying opportunities but remember this doesn’t happen overnight either and I think this is important a lot of people they watch these they’re like oh Garrett’s predicting like in the next month of no not at all it literally will take a year to a year and a half it’s about an 18mon cycle if you look from the high here on the monthly to the low you’re probably talking about 12 to 18 months but I do think once you start that correction you’ll see Nvidia correct sizeably let’s finish off on gold then uh well gold and the dollar let’s do gold and the dollar uh they’re you know kind of linked uh the gold price has been again trading range bound just like Bitcoin uh but uh obviously different magnitude so what’s your take there on this uh on this trading pattern yeah so so the pattern itself right now is favoring the downside in the short term but continues to be consolidation in the long term so you know I we you know I talked about this in in December with you we talked about a gold breakout it happened beautiful move to 2400 and change but now you’re in this what we would call consolidation period and essentially what we’ve had is this this is a topping tail we pulled back we pierced it never closed above I expect us to eventually break this 2280 level and at least come down to about 2190 2190 starts to get interesting I think as a buying opportunity but I do expect a little bit of weakness before the next leg takes us probably to 2,800 maybe even $3,000 an ounce so I continue to be hugely bullish long term because I think again the fiscal issues facing this country and facing the world are a nightmare that isn’t going to be easily fixed and gold is one of the answers and eventually Bitcoin will be the other answer and then the dollar we talked about other currency pairs but the dxy just continues to uh you know hang in there uh despite what may appear to be a weakening economy and I’ve heard this from actually economists were bullish they say the economy is slowing not necessarily flat out collapsing but just slowing anyway the dollar is holding strong what’s your take so the first thing to remember is the US dollar doesn’t have as much to do with the economy here as what’s going on with other currencies right so the fact that the yen is weakening the fact that the euro is kind of stabilized but but again the dollar is holding up a lot of other currencies because because these central banks are cutting rates their currencies are weakening which is keeping the dollar stronger um if the US starts cutting rates aggressively then the dollar you would assume would start fall but right now remember the dollar is against all a basket of currencies and those currencies are weaker and that’s keeping the dollar strong on a technical analysis basis we have a very clear potential breakout but it’s not yet done above 10620 would be a breakout uh that could actually take us as high as 114 on the other side if we break 104 you’re likely going to about 101 to 102 so again this is kind of a range bound you can see it’s just up down up let’s watch to see which way it breaks I eventually think the dollar does weaken but again it’s a basket of currency so if everyone weakens more than us it’ll keep the dollar relatively strong the US dollar is still the cleanest piece of laundry and a dirty hamper if you will or whatever analogy you want to use plenty of uh more things to discuss next time but we’re out of time to take care of that wish I could talk to you all day oh man there’s so much to talk about there’s so much to talk about where can we find you actually you know what let’s address some of the hater comments one of the comments is you’re early on your shorts the timing is wrong um you’re still sticking to it your conviction is high how do you respond to that yeah so so the the absolutely correct so definitely early on it um I think that’s part of being you know a Trader investor you see the future and you start positioning yourself ahead um just a good analogy or actually a good point I had some people that I was trading money for back in ‘ 07 I warned them in early to mid 07 to be exiting the market in full uh we didn’t start to decline until early 08 and so I was about 6 to 8 months early there I’m probably 6 to 8 months early here as well but ultimately what is uh the writing on the wall is there for everyone I mean that’s the thing is like you can’t deny it we can kind of put our head in the sand but it’s going to happen and it’s better I’d rather Miss some upside than be caught with my pants down on the downside why why don’t you just stay out of the markets like just cash yeah I’m a Trader though you know how I am I’m a swing Trader I’m in and out so much I mean again do I have a lot of longer term positions no but but ultimately I think that that it’s good to be positioned like look at Michael bu right he positioned himself ahead of it and he ended up making so much money when what what he predicted occurred in ‘ 08 um I’d rather be in that position and really make the big money at that point as well you know it’s a good we’ll finish off here it’s a good example of Michael bird because he he had to pay a lot in basically uh credit devault swap premiums before the whole thing collapsed and so his investors were like dude what are you doing get rid of this like you’re losing money for us and he held on to it right and he turned out to be right um you know it’s not easy David I’ll say this it’s not not easy going against the group and the the masses but you ultimately if you if you know what you’re doing and you’re reading the charts and the data correctly you you ultimately will be right Michael bur great example there okay uh did you stop losses right now yeah so on on certain things if if it’s a bigger macro play then I’m just letting it do its thing that’s fine with me I don’t mind allowing it to breathe a little bit but if it’s a shorter term trade absolutely okay where can we find you now you’re you’re all over the place but uh where where’s where’s a good place to find your work verified investing.com it’s a place where we’re data driven it’s all about charts and data analysis we have lots of other Traders joining this website all the homepage has amazing content on there for free uh heat maps and earnings and economic data and chart analysis all free and then we have courses where we teach people how to trade uh trading room for day trading and swing trade setups as well so it’s really meant to be a place where I want to draw the best in the world and that’s one of the reasons why I love interviewing with you you are one of the best in the world David and I’m sure you comments people will agree with you on that we we we make a good show so I appreciate you coming on the uh uh the program uh next time we’ll talk about more stuff I gotta go but uh thanks for being here thank you so much David Take Care thank you for watching don’t forget to follow Gareth in the links down below and we’ll see you next time

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Gareth Soloway, Chief Market Strategist of Verified Investing (https://verifiedinvesting.com/), updates his outlook for NVIDIA, tech stocks, the economy, the dollar, Bitcoin, and gold.

Gareth’s last interview with me in May: https://youtu.be/fD4C6EufSRA?si=4eP5nHTadELn4ZOl

*This video was recorded on July 1, 2024

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0:00 – Intro
1:10 – Massive divergence
6:13 – NVIDIA
11:20 – Macroeconomic update
21:50 – Market positioning
24:46 – Currencies
25:55 – Bitcoin
28:55 – NASDAQ 100
32:13 – Gold
33:20 – Dollar Index
34:55 – “I’m 6-8 months early”

#stocks #trading #nvidia