This Technical Trader Ignores the News, Only Follows Price. Here's What the Charts Are Showing Now.

Why It Matters

Relying on pure price action highlights a market that may be over‑extended on AI hype; early technical warnings can help investors avoid a sharp correction.

Key Takeaways

• Technical trader ignores news, follows pure price action trends.
• AI-driven tech stocks lift market while other sectors lag.
• Bears warn of liquidity‑driven rally reliant on few names.
• Utility and consumer‑staple outperformance signals upcoming correction ahead.
• Low put‑call ratios and VIX indicate extreme bullish sentiment.

Summary

The video features technical trader Chris Vermillion, who argues that market direction should be read from price action alone, not from news, economic data, or geopolitical events. He emphasizes that AI‑driven technology stocks are the primary engine lifting the S&P 500 and Nasdaq, while traditional dividend‑paying sectors such as utilities, consumer staples, and health care lag behind. Vermillion points to several technical signals: an equal‑weighted S&P 500 flirting with a double top, a concentration of gains in a handful of tech and semiconductor names, and a historically low put‑call ratio paired with a subdued VIX. He warns that when utilities (e.g., XLU) begin to outperform the broader market, it often precedes a 5‑8% correction in equities. Key quotes illustrate his stance: “I wait for price to give us a clean direction,” and “when utilities outperform, expect a correction.” He cites the DRAM ETF’s 100% rise in six weeks and the recent pull‑back as evidence of a feeding‑frenzy bubble, while noting that silver’s wild swings are typical of market tops. For investors, the takeaway is to monitor sector rotation and technical barometers rather than headline‑driven narratives. A shift toward defensive sectors or a rise in volatility metrics could signal the end of the AI‑fuelled rally, prompting risk‑adjusted repositioning before a potential pull‑back.

Original Description

The S&P 500 keeps hitting record highs. The equal weighted version of the same index is quietly forming what looks like a double top. Those two facts cannot both be right forever.

Chris Vermeulen of @TheTechnicalTraders joins Chris Vecchio to cut through the noise and focus purely on price action. The put/call ratio is at extreme lows, a new memory ETF called DRAM went up 100% in six weeks and dropped 12% in a single day, and silver is doing what silver always does before a reversal. The market is in a feeding frenzy and everyone is jumping at anything that moves. According to Vermilion, that behavior is one of the clearest late cycle signals there is.

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CHAPTERS:

00:00 Bulls vs Bears: Both Have a Case Right Now

00:17 AI Pulling Tech Higher While Everything Else Lags

01:04 Why Chris Vermilion Only Follows Price, Not News

02:00 Sector Rotation Like Water Sloshing in a Bathtub

02:40 Is This a Healthy Bull or a Concentrated Rally?

03:28 Equal Weighted S&P Forming a Potential Double Top

04:44 Put/Call Ratio at Extreme Lows: Late Cycle Warning

06:15 DRAM ETF Up 100% in Six Weeks, Down 12% in One Day

07:24 Euphoric Bubble Phase: How Do You Protect Gains?

08:45 Silver Fake Outs and Why People Keep Getting Sucked In

10:42 When Everyone Is Chasing, You Are Probably Near the Top

11:18 Final Take: Can It Run? Yes. But Know Where You Are.

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