Investor Called Chips Crash, Now Warns ‘We’re Nearing The End’ Of Stock Rally | Jim Welsh

Finance-focused subtitle summary

Market/asset views & key calls

• S&P 500 (index levels / trend)

  • After peaking around 7,620 (June 2), Jim Welsh frames the move as a triangle/wave structure that resolved higher, lifting the S&P toward the 7,700s–7,793 area.
  • Despite bullish highs, he argues the rally is a “wave five” that implies a near-term pullback:
    • Expected pullback magnitude: 4%–7% in the coming weeks
  • He also points to weak market breath (internal breadth) as a warning sign that price may be nearing a near-term high within the next handful of days.

• Semiconductors / SMH (bearish again after rebound)

  • Welsh repeatedly emphasizes semiconductors have not fully confirmed the broader market’s all-time highs.
  • SMH (Semiconductor ETF)
    • Prior call: SMH roll-over and potential retest via “take out the recent low at 503.”
    • He notes a rebound since early August has been sharp, but likely represents a retracement/short-term bounce, not a durable new up-leg.
    • Mentions an up-move target around ~590; he says price reached about 578 (Aug 4) (near his expectation band).

• Gold (GLD not named; gold price levels discussed)

  • Welsh argues gold’s strong rebound is not the start of a sustained advance above 6,000, but instead a retracement rally inside “wave 4.”
  • Key framework & levels:
    • Decline baseline referenced around $4,400 → $4,000 (with $4,150–$4,400 range references in the subtitles).
    • Fibonacci / targets:
      • “382 retracement” target around $4,575
      • “50% retracement” around $4,825
      • He references an initial target zone of $4,350 to $4,400 and says spot/cash hit ~4,371
  • Longer-term implication:
    • Gold may later dip below ~3,945 via a “C wave,” then move to new all-time highs afterward.

• Gold miners ETF / GDX

  • GDX performance and targets
    • Notes GDX dropped from 117 to under 70, and expects further upside after a falling wedge + RSI divergence.
    • His call: buy GDX near 72–80 (subtitles appear as 72/7280 due to transcription), with a target 88–91
    • He says GDX hit ~90.80
    • Upside scenarios:
      • Possible ~102
      • Even a new high above 117 if gold reaches ~4,500–4,700

• Treasury yields / bonds

  • Welsh maintains a long-term uptrend in Treasury yields:
    • 2-year Treasury yield: around 4.16%
    • Fed funds rate: around 3.63%
  • He interprets this as pricing that implies more than one hike.
  • Expected direction:
    • 10-year yield above 5% (eventually)
    • 30-year yield breaking above the prior 2023 peak
      • Prior peak around 5.15% (Oct 2023)
      • Current area 5.26%–5.28%

• Dollar (DXY)

  • He suggests the dollar index may have completed its correction, supporting a near-term rebound rally (including potential support for gold/gold stocks).
  • He implies that follow-on USD strength later could bring profits-taking.

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Macro/Fed & labor market reasoning

• Fed rate hike bias

  • Welsh leans toward the view that hikes are “baked in.”
    • Expects at least one hike, timing uncertain between September or October
  • He argues the headline jobs report (lost 23,000 jobs) is distorted by:
    • Government job losses attributed to education sector seasonality (schools reopening in August)
    • Leisure & hospitality losses of 30k–40k
  • Additional signals cited:
    • Challenger, Gray: layoffs lowest in 2 years
    • Unemployment claims: under 200,000
  • Emphasis:
    • Fed reaction function focuses more on inflation trends than one month’s jobs data.

• CPI timing

  • He expects CPI data next week to tick higher, and suggests it may not “prove” inflation is softened enough over the next 2–3 months.

• Credibility / forward guidance critique

  • He discloses a belief that Fed forward guidance is often wrong, increasing volatility.
  • He references historical comparison (attributed to a Rosenberg study in subtitles) that Fed projections were right <40% of the time.
  • Core point: the Fed should respond to incoming data, not rely on guidance.

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Explicit methodology / frameworks mentioned (step-by-step style)

• Technical Elliott-wave / pattern framework

  • Identify triangle/wave structure on the S&P 500 after a March low and a June peak.
  • Apply wave implication: triangle resolution → thrust, then wave five implies a retracement pullback.
  • Use moving-average regime confirmation:
    • 5-EMA vs 13-EMA crossover
    • Positive “trend defined” when red (5 EMA) crosses above green (13 EMA) and stays positive
  • Use market breath / thrust internal strength:
    • Compare advance vs decliners (internal breadth oscillator) to external price movement
    • “Weak thrust” = internal participation doesn’t match strong price gains
  • Translate breath weakness into probability of a near-term correction (4%–7%).

• Gold wave / Fibonacci targeting framework

  • Treat gold as being in wave 4 (retracement, choppy).
  • Apply Fibonacci retracement levels to the prior decline:
    • 38.2% ~ 4,575
    • 50% ~ 4,825
  • Align near-term pullback expectation with retracement-rally behavior.

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Key numbers & probabilities referenced

• Prediction market (Koshi) probabilities for S&P

  • 76% chance S&P ends above 7,800 by year-end (current ~7,700)
  • 62.6% chance ends above 8,000
  • 82% chance above 7,800 (Welsh references slightly different numbers in the segment; subtitles show both 76% and 82%)
  • 27% chance of ending above 8,200
  • If > 8,200 and a $50 bet, described payout: $161 (as shown on-screen)

• S&P levels mentioned

  • Peak: 7,620
  • Triangle support/line in the sand: 7,294
  • Recent high cited: 7,793
  • Upside “big rip higher” threshold mentioned later: 8,200

• 2-year and Fed funds

  • 2-year ~ 4.16%
  • Fed funds ~ 3.63%

• Pullback expectations

  • S&P correction: 4%–7% in the coming weeks (also framed as “next handful of days” risk for near-term high)

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Recommendations / trade stance (as stated)

• Welsh’s bottom line (final question)
  • Sell into semiconductors (SMH): expects near-term weakness after the rebound.
  • Buy gold and silver (and gold stocks) on pullbacks over the next 1–2 weeks, expecting higher prices later.
  • Lighten up in S&P 500 due to being “on the doorstep” of a 4%–7% correction.

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Disclosures / sponsorship

• The video is sponsored by Koshi (prediction market platform).
• No explicit “not financial advice” disclaimer line appears in the provided subtitles, though sponsorship disclosure is present.

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Tickers / instruments mentioned

• SMH (Semiconductor ETF)
• S&P 500 (index; no specific ETF ticker named)
• NVIDIA (implied in discussion of equal-weight exposure; ticker not stated)
• GDX (Gold Miners ETF)
• Gold and Silver (commodities)
• Treasury yields (2-year, 10-year, 30-year)
• KOSHI (prediction market platform; not presented as a tradable ticker)

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Presenters / sources (named in subtitles)

• Jim Welsh (founder/author, Macro Tides)
• David (host; last name unclear in subtitles)
• Koshi (sponsor/platform)
• Subtly referenced outside sources:
  • Challenger, Gray (layoff report)
  • University of Michigan (consumer sentiment index)
  • David Rosenberg (referenced regarding Fed projection accuracy)
  • Kevin Walsh and FOMC governors (referenced in Fed commentary; full context via subtitles)