Stocks and Bitcoin rally on Thursday, but this is just a “dead cat bounce,” said Chris Vermeulen, chief market strategist at TheTechnicalTraders.com.
Vermeulen told David Lin, anchor for Kitco News, that stocks show selling signs, and while Bitcoin has some more upside left in this bounce, he expects major resistance at the $50,000 level.
For these reasons, Vermeulen is 100% allocated into cash right now.
“Overall, the stock market, it’s lost a lot of its winds out of its sails as well. We’re seeing half of the sectors that I follow are in a downtrend. That means, the market is definitely limping along here. There’s not a lot of power behind it. If you look at the NASDAQ…it looks like it’s forming a bear leg here, and could very easily head lower. Overall, the stock market to me, is in a risk-off mode. You don’t really want to be in stocks right now. Everything is turning bearish. We’re seeing gold, utilities, bonds are holding up fairly well,” he said.
Vermeulen noted that when defensive assets like utilities and gold are holding up well relative to the rest of the stock market index, it means that institutional capital is rotating away from risk-on to risk-off assets.
