Technical signals can provide strong evidence for a market rally even when sentiment is low. Milton identified buy signals that mirrored those seen in early 1987. These signals indicated that the market was positioned to move higher, although they did not provide a specific timeline for how long the upward trend would last.

We have a series of buy signals. There is no way the market could go down. It is definitely going to go up. How long it goes, I do not know because you had similar signals in 1987 in January and the market peaked three quarters of a year later. I can't tell you how long the market's going to rally, but I will tell you how high the market should go.

Historical parallels help establish the potential for bull market action. In 1987, the market rally continued for nine months after initial buy signals appeared. By observing these technical indicators, it becomes possible to predict that a market will reach new heights even if the exact peak remains uncertain.

Milton emphasizes that his firm trades based on specific turning points rather than long term projections. In April 2025, they identified a rare market setup that triggered a massive buy signal. This signal was the first of eighty-eight indicators that confirmed a major shift in market direction.

We don't trade based on projections. We trade based on turning points. April was a major turning point for the market and we pounded the table. We don't always pound the table, but we were telling people to buy, buy, buy.

The signal on April 4 was driven by three rare occurrences. The Nasdaq five day volume hit a 200 day high while the index itself had declined 7% over the previous three days. At the same time, the VXN, which measures volatility on the Nasdaq 100, gained 10% for two consecutive days. This combination is extremely rare and has only happened a few times in several decades.

The market has since gained over 37% from that April signal. Milton notes that while this performance is strong, it follows a historical pattern where maximum gains within a year can reach up to 47%. These signals rely on rare market events rather than common indicators like moving averages or federal policy.

Projections serve as a useful tool for understanding the potential of a trade. Even if a buy signal appears, it may not be worth the effort if historical data shows only a small median gain. Trading costs and slippage can easily eat into those profits. By looking at historical returns, Milton provides institutional clients with a sense of how far a market might climb before facing a significant correction.

We look at the historical returns based on the signal and tell you what the market would do if we followed the historical returns. It is very helpful for us.

In April, multiple buy signals appeared across several days. On April 9 alone, there were about 40 different signals with strong historical precedents. Based on these indicators, the S&P 500 has not yet reached its historical average or median return. The data suggests there could be more upside before the market sees a 10 percent decline.

These signals often flash during periods of extreme panic. The low point in April was marked by the most oversold conditions seen since at least 1995. This fear was fueled by political divisions and concerns over economic policies. One half of the country feared a depression caused by Donald Trump. The other half worried Jerome Powell would cause hyperinflation. These moments of intense worry are often where market bottoms are formed.

The indicators go back only to 1995 or so. In any event, from 1995 to 2025 we had the most oversold. People truly panicked. And market bottoms always occur on panic.

While the current projections suggest more room for growth, institutional traders may begin to feel cautious as the market approaches these historical targets. Milton notes that while projections provide a guide, they are not the sole basis for making trades. The analysis also relies on specific trading points that can signal when to be more careful.

Milton shares specific indicators to show that his market projections are based on robust data rather than guesswork. He focuses on precise rarities that occur at turning points instead of using standard tools like moving average crosses or seasonality. For example, a significant signal occurred when the NASDAQ five day volume hit a 200 day high while the index lost over 10 percent in just three days.

We're talking about precise rarities that occur at marking turning points.

Market turning points generally take place during periods of very high volume. You might not see the highest volume on the exact day of the low. Instead, a regime of high volume over several days serves as a better indicator. Milton notes that if the five day volume on the New York Stock Exchange is at a one year high, it signals a major shift is likely happening.

Extreme oversold conditions also provide critical data. On one specific date, an oscillator measuring market momentum dropped to 4.44 on a scale of 0 to 100. This was accompanied by a five day rate of change in the NASDAQ that was the weakest seen in five years. These moments of overwhelming downside pressure often precede a sharp reversal. When the market eventually gains 6 percent back from a 10 percent decline, it can confirm the start of a new trend.

A specific combination of signals can identify market bottoms with high accuracy. One key indicator is when the S&P 500 generates its greatest gain over a 250 day period while volume increases by at least 20 percent on an up day. Historically, this rare setup signaled major bottoms in 1976, 1982, and 1984. It also accurately predicted the double bottom in 2022, where the Russell 2000 bottomed in June followed by the S&P 500 in October.

No one on Wall Street has this kind of information. We are really the only one. I have been working on creating these models and I just finished them in September. A lot of what you see now is relatively new because we did not finish fine tuning the models and eliminating those without perfect records until recently.

Another powerful model focuses on volume breadth extremes. This model does not care if the market is up or down. It only looks for instances where upside or downside volume is 12 times greater than the opposing side over a seven day period. When these volume rarities occur alongside high average volume, the historical result is consistent. These conditions have signaled 17 times in the past, and a bull market followed in every single instance.

The market has seen a significant rise since hitting a low in April. It has climbed nearly 40 percent without experiencing a correction of even 7 percent. Milton explains this movement using a baseball analogy. When a player hits a home run, the physics of the launch are decided the moment the bat meets the ball. The ball travels over the fence because of the initial momentum and force.

What we're looking for on a buy signals are launches. The fact that the market was able to have a 95 to an upside volume day one day after the low tells you there is underlying physics, underlying momentum, and underlying strength that doesn't dissipate in five days or 10 days or 20 days.

The strong signals seen in April and May are still the primary drivers of the current bull market. There have been very few confirming signals since then. While the market has performed well, it is actually trailing what Milton's models originally predicted. The market should be up several percentage points more, though it may still reach those targets before the year ends.

The current market appears strangely oversold despite only a minor correction in major indexes. The NASDAQ and Russell 2000 have seen declines of roughly five to six percent from their recent highs. However, Milton points to three rare indicators happening simultaneously that suggest a turning point. The VXN has gained 35 percent over three days, the NASDAQ advance-decline line has fallen eight out of ten days, and the index is seeing its weakest five-day performance in 180 days.

There is only one time in history that you saw what you saw yesterday. It happened as a sharp short correction in 1997. In that particular instance, the market gained 39 percent without a pullback. Today we are having a very big day. We have the biggest day since May in the markets.

Milton explains that this specific combination of technical signals previously occurred only during a 14-day correction in 1997. Following that event, the market experienced a significant rally. The current market strength, specifically a massive jump in the semiconductor index, supports the idea of covering short positions. While the recent dip felt significant, the data suggests it is a short-term correction rather than the start of a major bear market.

Milton notes that while he is currently short, recent market action suggests it might be time to cover those positions. He points to indicators like the VIX and VXN, which have shown significant gains over a few days. Historical data shows that these types of sharp shifts often precede a market bottom. In 1998, a similar signal led to a 38 percent gain in the S&P. Other examples from 2014, 2015, and 2024 also marked significant market recoveries.

It's not a perfect indicator. We've never seen this kind of action early in a bull market. That's very promising. The action that we saw yesterday on Thursday, February 5th, has been seen in multiple local bottoms suggesting that it's a bullish indicator.

However, these signals are not perfect. During the 2010 flash crash, the market continued to drop another 7.9 percent after a similar indicator appeared. This underscores the importance of viewing these signals through a lens of probability rather than certainty. The current situation is unique because the S&P is only down less than 3 percent and the Nasdaq is down less than 6 percent. Despite these relatively small declines, Milton sees evidence of panic in his indicators. This suggests that the market could be setting up for a rally that might catch many traders by surprise.

Milton uses a specific strategy involving the rate of change in the VXN over different short term periods to identify these shifts. This method helps him spot bear market rallies and major peaks. During extended bull markets, it can provide false signals, so he constantly monitors the market to see if it follows the historical pattern of success.

This catches bear market rallies. It catches major bear market peaks. But during an extended bull market, it gives a number of false signals. We're tracking if the market's following what it does when the signals are successful. If it's not, we get out of the short.

Milton points out that the S&P 500 has gained only 1.12 percent since December 11. Many people believe we are in a new bull market, but the data tells a different story. This small gain is consistent with successful short signals from the past. History shows that the market often stays flat or rises slightly in the weeks following a signal before it eventually collapses.

In 2000 and 2001, the market was up less than one percent 37 days after a signal. It eventually fell between 23 and 32 percent. The same pattern appeared in 2015 and 2021. This is why Milton advises his institutional clients to remain short. While the market has not gone down significantly yet, it also has not gone up.

Based on these successful short signals in the past, let's face it, we're only up 1.12 percent since December 11th in the S&P. At yesterday's close, we were down 1.49 percent, which is totally consistent with previous successful signals.

The decision to go short is based purely on indicators rather than news about the Fed or political events. Milton looks for specific signals that have a history of calling market peaks. He also tracks the rate of change in the unemployment rate. This specific indicator has a perfect record for predicting recessions and currently suggests a downturn is coming.

We don't really care about the news. We just care about the indicators. In the back of my mind, I know if you're going to get a major bear market, there will be some sort of event that we probably can't even predict that's going to be associated with that bear market.

A sharp decline in the NASDAQ VIX relative to a longer period can be a significant warning sign. Specifically, a five-day drop that is extreme compared to a thirty-day average suggests that investors are becoming overly optimistic. This happens when those who were previously hedged get rid of their protection too quickly. This shift in expected volatility reflects a level of bullishness that might not appear in other sentiment indicators like retail newsletters or put-call ratios.

It is a shift in expected volatility which is a shift in bullishness which doesn't always show up in the retail newsletter followers. It doesn't always show up necessarily in put-call ratios. But it shows up in this indicator precisely near market peaks.

Context is essential when interpreting these signals. Milton explains that he would ignore such a signal if it occurred right after a major market low with strong buy signals. However, when the signal appears after a long rally and lacks new buying momentum to support it, it becomes a reason to act. Milton rarely relies on a single indicator. Instead, he looks for a parade of signals to confirm a potential market top or bottom.

Context, context, context. During the bull market, I am not going to follow false signals. I am going to follow signals in which the market has already gained significantly and there is no confirming buy signals.

Milton Berg notes that identifying a market bottom is technically much simpler than pinpointing a market peak. While many people are quick to predict market crashes, the process of calling a top is complicated by the fact that stocks often form rounded peaks. During these periods, certain groups of stocks may continue to perform well even as the broader market starts to decline. This makes it difficult for analysts to reach a consensus on when a peak has actually occurred.

It is so much easier to call a market bottom technically than to call the market peak. Yet technicians are always afraid to call the market bottom, and they are never afraid to call the market peak. That is so wrong at the top and they are so wrong at the bottom.

There is a strange psychological trend where investors and analysts spend months or even years calling for a crash. They find it easy to predict a downfall despite the technical challenges. Conversely, they often hesitate at the exact moment a market bottom is forming, even though the indicators for a recovery are frequently much clearer than those for a decline.

Market gaps are more than just opening at a different price than the previous close. A true gap occurs when the market opens higher than the previous day's high and remains above that level for the entire trading session. The same logic applies to the downside. These gaps represent emotional moves within the market. When a market gaps up and then immediately gaps down the following day, it creates what is known as an island reversal. This formation leaves a single day of trading isolated from the rest of the price action, appearing like an island on a chart.

A gap tells you there is an emotional move in the market. An island reversal is just two gaps. One gap that takes place on the way up, another gap that takes on the way down, and you could make an island. There is an air pocket between those two gaps.

In January, the Russell 2000 experienced a unique one day island reversal. At the time, many investors believed the market was broadening and that small cap stocks were finally starting to lead. This enthusiasm reached a peak on January 22nd when the index gapped up. However, the next day it gapped down, creating a bearish signal that had never occurred before in the history of the Russell 2000. While gaps occurring right after a market low might represent healthy enthusiasm, those appearing after a long run often indicate a top.

Context is the most important factor when interpreting these indicators. Gaps are not random events. They appear at both market floors and market tops. Milton mentions that similar gap patterns marked the top of the market in July 2000, which preceded a massive decline over the following two years. Recognizing these emotional extremes allows for a better understanding of potential reversals before they fully materialize.

Technical gaps at market peaks often signal uncalled-for enthusiasm. Milton highlights how the Russell 2000 gapped up just before its peak in early 2020, preceding a significant decline of nearly 44 percent. A similar pattern appeared at a recent peak in November. Milton identifies an isolated one day island reversal at the top of the Russell. This specific technical event has not occurred before in this index, though it is more common in commodities.

The one day island reversal we had now, which I call an isolated one day island reversal at the top, has never before occurred in the Russell. It occurs in commodities often enough, has never occurred in the Russell. And the reason it occurred this time is because everyone is so enthusiastic.

Bull markets often reach their peak when laggards, or the dogs of the market, start to move while the leaders slow down. Many investors view this broadening of the market as a bullish sign. However, Milton argues it is a typical signal of a market top. Currently, about 40 percent of the companies in the Russell 2000 have negative earnings. This suggests that the recent surge in small caps is a low quality indicator rather than a sign of healthy growth. Milton remains cautious about calling a final bottom, noting that a decline of less than 3 percent is rarely the end of a correction.

Milton describes a specific technical signal involving the Russell 2000 and the S&P 500. This signal triggers when the Russell index drops by at least 5 percent and then fails to make a new low for eight days. On that eighth day, an upside gap must occur. Milton notes that while this happened recently, he considers it a weak indicator. The main reason is that the rest of the market did not follow the Russell lower. The S&P 500 barely moved during that same timeframe.

The Russell was down like 5 and a half percent. SP is down like less than 2%. The rest of the market didn't pull back. The Russell pulled back, held its low for eight days. And on the eighth day it exhibited an upside gap.

A 5 percent move in the Russell index is often just a random event or a hiccup because it is much more volatile than the S&P 500. Milton tracks these instances for his clients but does not include them in his primary market models. He points out that historical performance after these signals can be deceptive. Even when 90-day returns seem small, the market can still see double-digit gains within a year.

I didn't put much weight into the signal because you're looking for a gap up after a decline. And only the Russell decline. It was only a minor decline of 5%. And in Russell, 5% decline is really just a hiccup. It's just a random event. Russell is far more volatile than the S&P.

Market peaks are often misunderstood because a series of higher highs is typically a bullish signal. To find the true market tops, it is necessary to look at every major decline of at least 18% going back to 1966. For example, the 1987 crash followed a peak in August, while the 2000 dot-com bubble saw the Nasdaq drop 77% after its final high in March. The challenge is identifying what specifically occurs at these final highs versus the many bullish highs that precede them.

It is the ratio of the ratio of upside volume to downside volume to the ratio of upside stocks to downside stocks. It is a ratio of a ratio. In other words, it is not enough to have high upside volume. You have to have high upside volume relative to the number of stocks that went up.

One specific tool for this analysis is the trend indicator, often referred to as the TRIN. This metric examines the relationship between volume and the number of stocks moving in a particular direction. Milton explains that if the upside volume is overwhelming compared to the number of individual stocks that actually increased, the ratio drops significantly. This suggests a specific type of market behavior that differs from a standard healthy advance.

The technical data from the recent January high shows a striking similarity to historical market peaks. For instance, the 10 day trade in the Nasdaq at the S&P peak was 0.76, which is nearly identical to the historical median of 0.78 seen at previous market tops. Other indicators like the 25 day New York Stock Exchange trend and 10 day advanced declines also sit right at their historical medians. Even though the number of 52 week highs in the S&P might seem high, it actually matches what is typically seen when a market finally tops out.

If anyone tells you that the market action or Federal Reserve action is inconsistent with what we've seen at previous market peaks, I would show them my technicals. These things are all consistent with what you've seen at prior market peaks. No one can argue that the market can't peak now based on technical data. They can argue that we're not at a peak, but they can't argue that we can't peak.

This consistency extends to the rate of change over the last six months. While the S&P and Nasdaq have seen significant gains since April, their growth has slowed down to levels that are common at major turning points. Milton notes that his internal system uses color coding where red indicates data that is inconsistent with a peak. Currently, the indicators are largely consistent. This does not mean the market must fall immediately, but it removes the argument that the current behavior is too strong or too unusual to be a peak.

Individual investors often struggle because they are bombarded with conflicting opinions and news reports. This noise makes it difficult to make clear decisions. As a result, many retail investors miss market rallies or enter near the top. Milton Berg initially focused on institutional clients but spent ten years developing a robust model based on thousands of indicators. He eventually decided to offer this research to individual investors to help them navigate these challenges.

Individual investors find it very difficult because they read the news and they hear the news and they try to follow financial reports. They always get conflicting opinions. They don't know what to decide for themselves. They're out of the market when the market's rallying and they get into the market close to the top.

His research led to the discovery of about 2,800 indicators. Surprisingly, around 600 of these have a perfect historical track record with minimal pullbacks. Most technical analysts look at obvious signals like moving averages. In contrast, Milton focuses on rare data points that are not easily found on a standard chart. These signals do not occur every day. When they do appear, they provide significant insights into market behavior that the average person misses.

We're looking for things that don't take place too often, but when they do take place, they're telling you something.

Milton Berg designed a strategy specifically for retail investors who lack the time to monitor markets constantly. He argues that trying to time market tops is a losing game because the biggest gains usually happen early in a bull market. If an investor waits for too much confirmation, like a series of Fed rate cuts or moving average crossovers, they often miss the most profitable part of the move. Instead of trying to predict when a rally will end, Milton uses a simple exit rule. Investors remain long until the market declines 8 percent from its high. This approach acknowledges that while an 8 percent loss is unpleasant, it is a tolerable price to pay for participating in a 30 percent or 40 percent up move.

We are not going to anticipate a bear market. We are not going to say get out now at the top of the market because tops are difficult to call. We will tell you to get out when the market is down some 8 percent and then you will just go into treasury bills.

This method is influenced by the William O'Neil model, which suggests exiting a position if it drops 7 to 8 percent. Milton uses an 8 percent closing basis for his model. By following this systematic approach since 1957, the average long position in this model gained 26 percent. The goal is to keep investors in the market during massive gains while ensuring they are safely in treasury bills when the truly deep bear market declines happen.

A $10,000 investment made in 1957 would be worth over $1.1 billion today by following a specific compounding model. This strategy generates an 18.5 percent annual return by staying long on the S&P 500 and avoiding the most severe market downturns. It does not involve picking individual stocks or worrying about specific sectors. Instead, it focuses on staying invested during big moves and exiting when the market declines significantly.

The point is that you are a long term investor in the S&P 500. You are not going to pick stocks. You are not going to pick sectors. You are going to be long and capitalize on the most of the big moves.

Milton explains that the model typically outperforms 90 percent of hedge funds by simply avoiding large drawdowns. For example, in 1974, the S&P 500 was down 26 percent while this model was up 20 percent. This happens because the model moves to treasury bills during the bulk of a decline and re-enters the market just as it begins to recover. This allows investors to capture the rapid gains that often occur right after a market bottom.

The simplicity of the strategy is one of its most important features. Many people try to scale in and out of positions, which can lead to mistakes. This model is binary. You are either in the market or in treasury bills. It is designed for people who have full-time jobs and cannot watch the markets all day. On average, the model only requires one buy and sell trade every fifteen months. This low frequency makes it very easy to manage over decades.

Many people believe that more information leads to better results. They often seek out thousands of market signals to guide their decisions. Milton argues that this approach is mistaken. The true value for an investor is the absence of signals. When there are no signals, represented by zeros in a report, an investor can step away and take a vacation.

People say they want as many signals as possible. You can have 20,000 or more signals. But really what people should be paying for is the lack of signals.

Having fewer signals provides clarity. It allows a person to trust their strategy without constant intervention. Instead of managing overwhelming noise, the goal is to find a system that provides peace of mind through simplicity.

Market indicators often provide buy signals precisely when public sentiment is most negative. In October 1957, the Secretary of the Treasury and former President Herbert Hoover both warned that the United States was heading into another Great Depression. While the public expected economic collapse, quantitative models identified a buying opportunity based on specific technical data points like heavy volume and an extreme number of new lows.

On October 21, 1957, Secretary of the Treasury Humphrey said we were headed for a depression, as did former President Herbert Hoover. They both warned of a Great Depression. Then the model produced a buy signal just when everyone expected the worst.

The signal triggered because the market reached an extreme state of exhaustion. The average volume on the New York Stock Exchange hit a high point not seen in over a year while the S&P 500 closed at a 60 day low. These technical extremes, rather than the prevailing news cycle, indicated that the market was ready for a significant gain. Following that signal, the market eventually rose by 55%.

Gold and silver recently saw a powerful move followed by a sudden collapse. Milton anticipated this shift and placed a short position in both metals using call spreads right at the peak. This market action reflects historical volatility seen in previous silver cycles. One notable example is the silver crisis of 1980 involving Nelson Bunker Hunt.

Nelson Bunker Hunt 71% silver collapse. And CPI was at 14.7% on that month, the highest in 23 years on March 24, 1980. And the market was down. And everyone is panicking. And guess what? We got a buy signal. The point is the panic in silver generated a buy signal in the S&P.

History shows that extreme panic in the silver market does not always mean the end for stocks. In 1980, silver prices crashed by 71 percent while inflation was at a multi-decade high. Despite the panic, that moment actually provided a buy signal for the S&P 500. Milton looks for these specific technical signals to navigate current market turns.

Milton managed the largest gold stock fund in America during the 1980s. He won awards for his performance in 1987 because he anticipated a market crash. Many people believe that gold always moves in the opposite direction of the stock market. Milton argues that if gold and stocks are moving up together, gold will likely fall alongside stocks when the crash happens. He uses this logic to manage cash positions and protect capital during volatile periods.

There is a common belief that gold is a magic instrument that tracks the Consumer Price Index. History shows that gold often exceeds the CPI to such an extent that it triggers a major bear market. From 1980 to 2000, the CPI doubled while gold prices fell. This resulted in an 86 percent loss for gold relative to inflation. Gold is currently at one of its highest points in history relative to the CPI. Buying gold at these levels to beat inflation may be a mistake because the price has already anticipated future inflation.

When everyone is telling you to buy gold because inflation goes up, it is just not true. If gold anticipated the inflation, gold can get so far ahead of it that it goes down even as inflation continues.

Even during the hyperinflation of the Weimar Republic, gold was not a massive wealth generator in real terms. While stocks lost 95 percent of their value, gold only gained about 10 percent after adjusting for inflation. Gold is a stable commodity, but its value as a hedge depends entirely on the price paid for it. Another factor is supply. Unlike oil, which is consumed and disappears, every ounce of gold ever mined is still above ground. This means the supply of gold increases much more than other commodities over time.

Milton relies on volume rather than open interest when building market models. Volume is often the most critical factor in determining market direction. When comparing gold to other assets like soybeans, a clear discrepancy appears. While soybeans are a physical commodity sensitive to inflation, gold has significantly outperformed them. This outperformance suggests that gold is not just moving with inflation but is in an overextended state. Gold is currently at its second highest level in history relative to the price of a typical American home.

I'm lucky that over the years I've never built models using open interest. I only built models using volume. So volume may be the most important factor.

A proprietary chart shows gold valued in a GDP-weighted basket of major world currencies, including the BRICS nations. This view reveals a massive surge across all currencies. Milton mentions a simple test used by a colleague at Oppenheimer involving a child looking at a chart. If the chart shows a massive vertical move, it is likely nearing the end of its run rather than the beginning. The current data for gold suggests it has already taken off and is likely exhausted.

Does this look like we're at the beginning of a move or look like we're at the end of a move? Just a little bit. Look at charts. In other words, does this look like the beginning of a move? More likely end of a move.

Gold bull markets are often misunderstood because of their historical context. The massive rally seen after 1971 was largely a catch up period because the government had previously fixed the price at thirty five dollars an ounce. While some see the rally since 2000 as a long term bull market, gold has actually shown significant volatility relative to inflation. Milton suggests that we might be entering a multi year or even a multi decade bear market in gold. This is because gold is currently at a major extreme compared to other commodities.

Gold holds value. And for some reason, I don't know why, people have been taught and people are convinced that gold compounds and makes money. Gold is not an asset that makes money.

Unlike a productive asset like a stock, gold does not produce anything. When you buy a company like Apple, the business generates earnings and dividends which can be reinvested to create more value. This is what creates compounding growth. Gold, by contrast, is just a commodity. It does not have babies, as the saying goes. It simply exists. While it might retain value over extremely long periods, it does not compound wealth in the way a productive business does.

The perception of gold also changes depending on where you live. In countries where the local currency has weakened significantly against the dollar, such as India, gold appears to be in a permanent bull market. This is more a reflection of currency debasement than the inherent growth of gold itself. Many investors become so convinced that paper assets are dangerous that they refuse to sell gold even when it reaches a peak. Milton recalls an investor in 1979 who refused to sell silver at its high because he could not imagine putting his money back into paper assets, even though the stock market and treasuries offered better value at the time. Currently, gold is showing the classic signs of a climax top.

Market tops often leave visible footprints in both price charts and physical supply chains. Milton explains that gold and silver recently showed accelerating gains and significant price gaps to the upside. While he does not typically use moving averages, the ratio of prices to their 20 day averages reached extremes usually seen only in speculative meme stocks. These signs indicated a market top, even as prominent Wall Street figures remained long on the position.

The ratio to its 20 day moving average was an extreme kind of extreme you see in speculative stocks that peak in these meme stocks. That is signs of a top. I was embarrassed to tell my clients to get out of gold because some of the titans of Wall Street were long at the top.

Beyond technical charts, physical market signals provided a clear warning. Milton observed that silver refiners were so overwhelmed by incoming scrap metal that they stopped accepting new inventory. This level of supply response was more intense than the 2011 silver peak, when refiners worked three shifts a day without turning suppliers away. This suggested that current prices had successfully pulled a massive amount of new supply into the market, confirming a fundamental peak. Milton used these signals to write short term gold calls the day after the peak, anticipating that prices would not return to their recent highs.

Silver refiners are so overwhelmed with incoming inventory they have stopped accepting additional scrap metal. This suggests that at a fundamental level, current prices are pulling significant new supply into the market.

A market peak often reveals itself through specific technical and fundamental signals. In the case of gold, the asset showed signs of a climax with record volume and gaps leading into the price high. This parabolic rise follows a pattern seen in many historical stock peaks where price increases become exponential as the trend nears its end.

You had record volume in the most retail oriented types of investments, the ETFs, the gold bullion dealers who sell to the public. You had record volume on the retail side buying. And the natural sellers, people who already own gold or own gold scrap or on silver scrap, were sellers.

Milton observes that during these periods, retail investors rush into the market while sophisticated holders or those with physical scrap begin to sell. This transition of ownership draws out supply and marks a technical peak. Gold essentially acted like a high cap stock reaching the end of a parabolic run. It exhibited all the classic signs of being overvalued relative to its history and the CPI.

Milton is currently bearish on gold and silver, anticipating a long term decline. While markets can sometimes surprise investors, the current data suggests that the recent panic buying is likely indicative of a market top. In most cases, commodities like gold and silver form spike tops rather than rounding tops. This means that once they reach a peak, they tend to fall quickly rather than testing those highs over a long period.

Gold is a far deeper market and it is highly unlikely after this type of a decline if this type of panic buying that you will see new highs. If you do see new highs, there is only one time in history when gold made a rounding top.

History shows that gold almost always makes a spike top. The only notable exception was around 2011, when the market tested its July high in September at a slightly higher level. This behavior is unusual for the asset class, which typically follows the volatile patterns seen in other commodities where a sharp peak is followed by a significant drop.

The silver market is currently defined by a debate between fundamental shortages and technical indicators. While industrial demand for solar panels and electronics has led to a physical deficit for several years, Milton argues that these narratives often precede major market peaks. He recalls that similar stories about silver shortages were prevalent during the peaks of 1980 and 2011. Even if demand is high, technical analysis can provide a more accurate picture of when a speculative fever has reached its limit.

Most people are saying the smelters can't smelt it so that must be a shortage because they are not able to come up with supply. But it's telling you there's underlying supply looking to smelt. It depends how you look at it.

Milton relies on on-the-ground information from major refiners and smelters to gauge the true state of the market. When smelters are running three shifts a day and are backed up for weeks, it often indicates that a massive amount of supply is entering the market from people looking to sell. This surge in supply is a hallmark of a speculative top. He views the recent price action in gold and silver as a historic peak similar to the dot-com bubble, where even high-quality assets like Amazon saw massive declines after a speculative run.

Ultimately, technical signals should take precedence over popular fundamental stories. Market participants often focus on monetary policy or industrial deficits to justify staying in a position, but the market price tells the real story. Milton suggests that the market has already spoken and that precious metals are likely entering a period of decline after a speculative move.

Market cycles do not predict whether a price will move faster or slower. Instead, they identify specific dates where a market is likely to reach a turning point. These cycles work in tandem with human psychology and emotion. When a market hits a cycle date while sentiment is at an extreme, there is a high probability that the trend will reverse. Milton explains that the most successful investors often use this esoteric cyclic work to guide their decisions.

Cycles predict turning points. They don't predict accelerations or deceleration. They predict turning points in the market.

Bitcoin and gold are the two assets that respond most effectively to these cycle dates. Gold is unique because almost all the gold ever mined remains above ground, meaning the supply is relatively constant. This makes its price move primarily based on sentiment rather than traditional fundamentals. Milton notes that Bitcoin follows a similar pattern because it lacks inherent value, which makes it purely sensitive to shifts in sentiment and cyclic timing.

Milton Berg analyzes Bitcoin market cycles and specific price behaviors. He notes that Bitcoin peaked on a cycle date of October 6th and moved toward a crash low on February 3rd. Milton monitors how the market tests previous lows. Sometimes the price stops just before a previous low. Other times it drops slightly below it by up to 3 and 3/4%.

If the 71,651.33 level holds past today's close, I would recommend Bitcoin bulls to increase exposure using the area of the low as a stop.

Milton is not personally bullish on Bitcoin and finds that the asset makes little sense to him. However, he provides guidance to clients who are heavily invested. When the price fell to 61,000, it broke the support level he was watching. He advised his clients to avoid buying because the low failed.

I told my clients, if you're considering buying Bitcoin, don't buy it because the low failed, and anything could happen.

Bitcoin is often difficult to conceptualize, but the most logical explanation lies in the ancient rai stones of Yap Island. These massive circular discs served as currency for centuries. Milton notes that academics and anthropologists find Bitcoin strikingly similar to these stones because both are highly valued but rarely moved. Ownership of the heavy stones was transferred through public verbal agreements rather than physical exchange. This functioned as a form of distributed ledger where the community remembered exactly which stone represented which transaction.

Ownership of heavy rai stones was transferred through public verbal agreements rather than physical movement. A form of distributed ledger. There were these big stones that were difficult to move, and people would buy and sell things and use a stone to remind themselves of their transactions.

This comparison is unique because most other forms of money possess intrinsic value. Gold is used in jewelry and passed through generations because of its beauty. During times of war or in prisons, items like candles, cigarettes, or even bicycles have served as currency because they have a practical use. Bitcoin lacks this physical utility, making the social agreement of the rai stones the closest historical antecedent to how it functions as a store of value.

Bitcoin lacks any form of intrinsic value, which makes traditional valuation metrics like cheap or expensive entirely meaningless. Whether the price is $10,000 or $10 million, there is no fundamental anchor to measure it against. Milton argues that because there is no overvaluation limit, the price can rise far beyond expectations. Conversely, there is no underlying value to prevent it from crashing to zero.

Bitcoin has no intrinsic value at all. You can't say it's cheap when it's at $60,000. You can't say it's expensive when it's at $10 million, because there's no way of measuring its value. There is nothing in terms of overvaluation to prevent it from going up way more than you imagine.

The cost of mining or producing something does not automatically grant it value. Milton uses a thought experiment involving burying paper cups underground and protecting them with nuclear arms. Even if these cups were expensive to mine and impossible to counterfeit, they would still be worthless. True money requires a different foundation. Gold is considered money inherently, while the US dollar functions as money because it is backed by the authority of the government.

The reason the dollar is money because it's backed by guns. It's backed by prison cells. If the government wants you to pay taxes in dollars and you don't pay it, you go to jail. It is money because it is backed by the forces of the US Government.

Bitcoin is viewed as a speculative item rather than a true asset. Trading it successfully is more about finding someone else willing to pay a higher price than it is about the asset making sense. Milton notes that even a successful trade, like buying at four cents and selling at eight cents, does not mean the item had value. It simply means the trader made a good move on a valueless item.

The historical example of Rai stones from Yap Island provides a lens to view modern currency. These large limestone disks were used as money because limestone was not native to the island and had to be imported. While limestone is a common material globally, its local scarcity gave it value in that specific context. This parallels the argument that Bitcoin has value because it is artificially scarce.

Rarity is nothing. I have a sock with a hole in it right now. It is very rare, but it is valueless. There is only one in the world. There is no logical thing to say that if something is scarce and it costs money to mine it, it has value. It is a fallacy.

Milton Berg argues that scarcity alone is a fallacy. He uses the analogy of a unique, damaged sock to show that being one of a kind does not create worth if there is no utility. Unlike gold, which has industrial applications, or the dollar, which is backed by government authority, Bitcoin lacks a natural end user. It also lacks the technical metrics used to analyze traditional markets, such as an advance decline line. The price is driven purely by what the next person is willing to pay rather than any fundamental or technical foundation.

Milton argues that a rising price does not necessarily mean an asset has intrinsic value. He points to the philosophy of Benjamin Graham to explain that people often confuse a successful investment with an asset that simply went up in price. While Bitcoin has increased in value for many holders, Milton suggests it lacks the fundamental utility or productive capacity found in traditional stocks. Companies like Apple, Nvidia, and Walmart produce what he calls little baby versions of themselves through growth and dividends. Bitcoin does not have these characteristics.

Investment is not just about an asset going up in price. There is other criteria that measures whether something is an investment. No one can give me a logical reason for Bitcoin to be a valuable asset. The fact that it has a price does not mean it has a value.

Many institutional investors are now allocating a portion of their portfolios to Bitcoin. Milton believes this move lacks logic and is driven solely by the observation that the price is moving upward. He contrasts this with the strategy of investors like Warren Buffett. While Buffett maintains a massive cash reserve waiting for stocks to become cheap, he still focuses on companies with underlying value. Milton concludes that technical analysis can interpret price movements, but it cannot create value where none exists. He maintains that even gold has more inherent value than Bitcoin.

Milton currently holds a heavily bearish position. He is 110% short across various assets, including mid caps, the Russell 2000, and semiconductors. This stance comes from a sell signal in December that lacked positive follow-through. Several factors suggest a speculative top in the market. For instance, the Russell is moving up while the S&P 500 remains stagnant. Additionally, the NASDAQ failed to reach a new high above its December peak.

I am short because my sell signal back in December 11th has not had the market follow through. All follow through so far have been signs of speculative tops. You have the fact that the Russell is moving up without the S&P 500. You have a lot of factors telling you the market is topping.

While Milton is currently short, he remains flexible. He almost covered his shorts recently but decided to wait for more data. It is rare for anyone to correctly predict the specific reason for a crash before it happens. Markets anticipate events, and the actual cause of a bear or bull market often becomes clear only after the trend has started.

For typical long-term investors with retirement accounts, Milton suggests ignoring the daily market noise. If the country remains capitalist, the S&P 500 should gain value in real terms over the long run. A simple strategy is to stay long during bull markets. If a correction starts and the market drops by a certain percentage, moving to T-bills can provide safety and peace of mind.

Wait for the correction to start. Wait for the correction to be down 8% based on the model. And then when you get into T-bills, you can start to sleep. T-bills are not the best investment, but certainly the safest investment.

Rare signals at turning points help identify when to re-enter the market. The goal is to get into a bull market early and exit a bear market before significant losses occur. This approach avoids the stress of constant speculation and focuses on capturing the bulk of market gains.

Milton focuses on a straightforward investment strategy for institutional clients. This approach avoids complex sector rotations. Instead, it involves being either fully invested in the United States stock market or completely in treasury bills during bear markets or corrections. This simplicity relies on the long term strength of the American capitalist system.

Either 100% in the stock market based on the capitalist system in United states or you're 100% in treasury bills because there's a correction or a bear market and you want to be out of it. Very, very simple.

While American companies typically offer higher profit margins and returns on equity, global markets provide interesting exceptions. For instance, the Brazilian stock market performed exceptionally well in the early 2000s under a left wing government. This growth happened because of a broader bull market in oil and emerging markets. While capitalism generally supports stock performance, external factors like commodity cycles can create unexpected successes in different political environments.

Investment decisions are based strictly on technical analysis rather than fundamental research. The goal is to own stocks for at least a year with an average annual turnover of 75 percent. While the balance sheet is checked to avoid bankruptcy, price action drives the selection process. This approach has led to significant outperformance since 2016. Using pattern analysis from experts like William O'Neil helps identify growth stocks as well as cyclical and undervalued companies early in their turnaround phase.

Current holdings include a mix of foreign and domestic assets. Argentina and various Asian companies currently show greater technical potential than many stocks in the United States. For example, Atour is a Chinese travel company that fits the technical criteria despite uncertainty about its fundamental details. Berkshire Hathaway is held as a defensive cash asset because it likely holds up better during market downturns. Constellation Energy was originally purchased because the chart looked great, and it later became clear that it benefited from the move toward AI technology.

I see one of your biggest positions is Seagate. My guy works with me, a very brilliant guy. He is yelling, Milton, do not buy Seagate. He gave me all the fundamental reasons not to buy it. It was overpriced and everyone was looking at it. But I saw a breakout on a gap and I bought it right there. It just made a new high a few days ago.

Technical patterns often override fundamental concerns or warnings from colleagues. GE Vernova was purchased during a breakout regardless of its previous business issues. Even when a stock has a low price to earnings ratio, like Shinhan Financial Group, the primary reason for the purchase is the consolidation and subsequent breakout shown on the chart.

High-performing stocks can be vulnerable to price drops. Even when a stock is doing well, it might still lose value. Milton prefers to hold stocks for at least one year. This is a goal rather than a strict rule, but it guides the investment process. This approach and these specific insights are tailored for institutional clients.

I know it is very vulnerable. It may come down, but we try to hold stocks for at least a year. We don't always do it. We try to.

Milton recently added several new positions to his portfolio, including Finia, an auto parts company. He purchased the stock less than two months ago, and it has already gained 17 percent. Other recent additions include Korea Electric Power and Insight. While these are newer picks, he still holds older positions like Google, which he has owned for about two years.

The last one was Finia Auto Parts. It's up 17 percent. I just bought it maybe not even two months ago.

Milton also expanded his reach into different sectors and geographic regions over the past year. He invested in Generac, though it is currently down about 3 percent. He also found success with purchases in Argentina during this same period.

The software sector is navigating a challenging bear market after years of dominance. Investors are increasingly worried that artificial intelligence might make traditional software firms obsolete. This fear is reflected in the IGV exchange traded fund. It shows a rolling top and lacks a clear buy signal. While high volume at lower price points can indicate a potential bottom, the current charts do not show a successful test of those lows yet.

When you see stocks with strong earnings coming down, the market knows more than the earnings know. You want to see strong earnings and a strong market.

Microsoft demonstrates this disconnect between financial reports and stock performance. It shows a double top pattern and negative technical signals even though its earnings are solid. Adobe is another example of a former leader that is now struggling technically. Milton explains that he typically exits a position when he finds a more promising opportunity. He looks for specific technical patterns across the market but finds few attractive options in the current software landscape.

Usually I get out of a stock because I find another stock to buy. I skim the tables for stocks that are showing me what I'm looking for. I couldn't find any today, for example.

Other major players like ServiceNow and PayPal are also showing signs of weakness. PayPal has fallen nearly ninety percent from its record highs. This widespread decline suggests that the market is reevaluating the high growth and high quality status previously granted to these software companies.

Milton reflects on the early days of Tesla and how its chart pattern mirrored that of Cisco when it first issued stock. A crucial signal for the company's potential was its ability to sell cars without any advertising. While most car makers buy expensive Super Bowl ads to gain attention, Tesla grew its volume purely through organic demand. This lack of marketing spending was a powerful indicator of the deep interest in electric vehicles at the time.

Tesla's selling cars without advertising. Not one ad. This tells you something about the underlying demand for electronic cars. That's all I needed to know. They were selling cars and volume was increasing, but they weren't even advertising.

Despite that early promise, Milton now views Tesla as overvalued. He notes that a recent breakout occurred alongside weak earnings, which makes it an unattractive buy. He compares a quality breakout to a great home run hitter. When the bat hits the ball, you can immediately tell it is going to take off. Successful market bottoms and breakouts should display that same kind of undeniable energy.

When one of the great home run hitters swings at a ball, at the time it hits the ball, you know it's going to take off. That's what you like to see at breakouts. You want to see the energy within the market bottom so you don't have to worry about it later on.

Milton Berg holds a short position on the semiconductor ETF, SOXX. This decision stems from the stock gapping up into high volatility at a potential top. The Russell index showed an isolated one day reversal at the same time. The timing also aligns with the Montgomery cycle, which began on January 30. The semiconductor sector peaked just the day before this cycle date. This group of stocks often experiences heavy emotional trading. The market has risen significantly, with semiconductors up 145 percent in less than three quarters. If the broader market begins to decline, these stocks are likely to lead the way down.

The first down day was on the cycle day. Since there is a lot of emotion in the semiconductor stocks, it is something that should cycle. If the market is going down, I think semiconductors would lead to the downside. That is why I shorted it.

There was a small 40 cent gap up recently. While gaps can sometimes be bullish, they are usually more telling two or three days after a low. Milton may reevaluate the position soon to see if the downward trend holds.

Milton shares that he recently bought stocks in Korea and China. While some investors avoid China due to ethical concerns regarding its government, Milton believes that economic prosperity eventually leads to more ethical systems. He views capitalism as a more ethical system than communism or socialism. In contrast, the United States market currently offers fewer buying opportunities.

I always took the view that once a country prospers, ultimately it will become more ethical. Capitalism is the most ethical type of system as opposed to communism and socialism.

The Russell 2000 index is a significant point of concern for future market declines. It contains a high percentage of zombie companies because it lacks the strict earnings criteria found in S&P indexes. A major problem with treating small-cap as an asset class is the rebalancing process. When a small company performs well and grows its earnings, it is often moved into a mid-cap index. This means the Russell 2000 constantly loses its best companies while retaining those that struggle.

The reason Russell will lead to the downside is because there are many zombie companies. The Russell 2000 doesn't select for earnings. Every time they rebalance it, you are losing the good companies.

While many investors focus on the skill of selling before a market crash, the real value lies in knowing when to get back into the market. Selling at the top often involves a degree of luck, but failing to reinvest at the right time can be more damaging than simply holding stocks through a downturn. Missing the subsequent recovery often results in worse performance than if an investor had never sold at all.

If you nail the crash but you don't get back in, it is worse than just 100 percent owning stocks. Everyone makes the mistake of missing the bottom. That is the worst mistake you can make.

Milton shares that his perspective comes from years of managing large funds for prominent figures like Soros and Druckenmiller. He spent a decade deeply studying research to develop robust indicators that remove the need for guesswork. By following these indicators blindly, an investor can avoid the common pitfalls of listening to emotions, headlines, or economists. These tools are specifically designed to identify market bottoms and provide a disciplined path back into equities.