U.S. equities could be in a topping pattern, Real Vision CEO Raoul Pal told Ash Bennington during today’s Daily Briefing.

Pal said we don’t know if it is a meaningful top yet, but he is watching for a GMI crash pattern where the market falls sharply, retraces 50%, then gradually rolls over and takes out the previous low. He said we could be building that pattern in the S&P and the NASDAQ or the NASDAQ could be forming a head and shoulders top. Either way, Pal believes it feels like we’re searching for a top.

Pal also said he is keeping an eye on weakness in banks, heavily indebted BBB companies not trading well, and the collapse of oil demand over the past week. He believes that people are still in the hope phase of the recovery where they think COVID is a short-term problem, but it is time for the hope narrative to go away because the reality is that we have a really big long-term problem.

With the virus again on the rise, people need to understand that the human behavior changes that result from it are going to have real economic effects. Pal pointed out the Baby Boomers are both the population most at risk and the generation with the most spending power, so when they restrict themselves from normal activity, it is going to have an impact.

Other indicators of trouble that Pal mentioned were copper rolling over, the dollar stabilizing, and bonds staying flat. He said that bonds read the economy better than anyone else and this tells you the economy is not recovering. A lot is going on, but it is all feeding into one narrative: the slowing of growth, he said.

READ ALSO  CDC Reaffirms Warning Against Nonessential Travel, Including Cruises

On the crypto side, Pal shared his thoughts on the criminal charges brought against BitMEX, saying that the most interesting thing about the news was that it didn’t cause a crash. He believes the U.S. is simply making an example of them and after a slap on the wrist, they will be free to operate. It is interesting to see the space grow up; it is a good thing because we live in a world of governments and crypto needs to exist within that, he said.

Pal wrapped up the discussion with his feelings about the energy sector. Pal shared that he has been structurally bearish on energy stocks for a few years now and thinks we are in a secular downcycle in energy. With people moving toward green investment, especially in Europe, Pal anticipates more regulation in the energy market and fines for energy companies in the future.

Pal sad it looks like all headwinds for the energy sector. We could get cyclical bounces, but the world may have changed, he said.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This is pretty obvious, but we should probably say it anyway so that there is absolutely no confusion… The material in REAL VISION GROUP video programs and publications (collectively referred to as “RV RELEASES”) is provided for informational purposes only and is NOT investment advice. The information in RV RELEASES has been obtained from sources believed to be reliable, but Real Vision and its contributors, distributors and/or publishers, licensors, and their respective employees, contractors, agents, suppliers and vendors(collectively,”Affiliated Parties”) make no representation or warranty as to the accuracy, timeliness or completeness of the content in RV RELEASES. Any data included in RV RELEASES are illustrative only and not for investment purposes. Any opinion or recommendation expressed in RV RELEASES is subject to change without notice. RV Releases do not recommend, explicitly nor implicitly, nor suggest or recommend any investment strategy. Real Vision Group and its Affiliated Parties disclaim all liability for any loss that may arise(whether direct, indirect, consequential, incidental, punitive or otherwise) from any use of the information in RV RELEASES. Real Vision Group and its Affiliated Parties do not have regard to any individual’s, group of individuals’ or entity’s specific investment objectives, financial situation or circumstances. RV Releases do not express any opinion on the future value of any security, currency or other investment instrument. You should seek expert financial and other advice regarding the appropriateness of the material discussed or recommended in RV RELEASES and should note that investment values may fall, you may receive back less than originally invested and past performance is not necessarily reflective of future performance. Well that was pretty intense! We hope you got all of that – now stop reading the small print and go and enjoy Real Vision.

READ ALSO  Sweden Refuses To Impose New Lockdown Measures, Saying People Have Suffered Enough

Via SeekingAlpha.com