Stage 4 Market Risk: Protecting Your Portfolio Before the Real Damage Begins
In my recent interview on Milk Road Macro with John Gillen, I walked through what I believe is a very important transition taking place in the markets right now. While the S&P 500 is still technically in an uptrend, the character of the move is changing. Momentum is fading, the Nasdaq has begun carving out lower highs and lower lows in the short term, and the Magnificent Seven are no longer acting as leadership stocks. When leadership starts to roll over, broader indexes often follow. That is how late-cycle distribution phases typically unfold: they appear strong on the surface while internal weaknesses quietly build beneath the surface.
I also discussed what I call the “ocean tide” rationale, focusing on catching the middle, safer section of a move rather than trying to predict tops or bottoms. We covered the psychology behind mass sell orders, how whole numbers like $50 in silver can act as magnets, and why blow-off tops in metals often lead to sharp reality checks. I explained why I am currently holding roughly 66% cash, not as a prediction, but as a risk management stance during what could evolve into a Stage 4 financial reset. We discussed the hidden risks of diversification, how dividend stocks can panic together, and why 2026 and 2027 could be more difficult years ahead.
In uncertain times, the goal is not excitement; it is survival and steady growth. The strategy may seem boring, but historically, disciplined capital protection and trend alignment have outperformed emotional decision-making over full market cycles.
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The topics John and I discussed include:
- 00:00 – Intro
- 01:45 – S&P 500: Chasing 7000 or a Trap?
- 03:42 – The “Ocean Tide” Rationale
- 04:32 – Catching the Middle Safe Section
- 06:07 – Nasdaq’s short term Downtrend
- 08:16 – Magnificent Seven: From Glow to Drag
- 09:38 – The Mass Psychology of Sell Orders
- 10:53 – Market Patterns: Is April Repeating?
- 12:46 – A Dystopian Head-and-Shoulders Pattern
- 14:16 – Stage 4: Defining the Financial Reset
- 16:04 – Diversification’s Hidden Ticking Time Bombs
- 18:11 – Why Dividend Stocks Panic Together
- 19:58 – Gold’s Mixed Signals
- 22:29 – Sponsor: Bridge
- 23:03 – Sponsor: Summ
- 23:54 – Silver’s Blow-Off Top Reality
- 26:11 – Whole Numbers: the $50 Silver Magnet
- 27:49 – Clearing Out Physical Metal Positions
- 29:50 – Copper’s Bearish Volume Spike
- 31:46 – Chris’ Equity Exposure: Why He’s 66% Cash
- 33:20 – 2026/27: the Difficult Years Ahead
- 35:15 – Bonds and the Dollar’s Survival Play
- 36:43 – Surfing the Market’s Annual Waves
- 38:18 – Can the Fed Hold Up the World?
- 40:22 – the “Boring” Strategy to Beat Volatility
- 43:24 – Chris’ Critical Advice: Knowing Your Game
- 45:40 – Wrap-Up
Chris Vermeulen
Chief Investment Officer
TheTechnicalTraders.com
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