Milton Berg: I Have Evidence Market Has Likely Bottomed | Why Milton’s Long Semis, Korea, Nasdaq, and More (With Caveats), and Why He Thinks Gold has made a Multi-year Top

Episode Summary

Executive Summary: Milton Berg argues the market is bullish off the July 29 low, but vulnerable to a short-term top and possible retests in semis and Korea due to exhaustive gaps and bearish divergences. He says his April buy signals still imply higher SPX levels, while gold/silver likely peaked long term and bonds remain structurally expensive with yields headed higher.

Main Topics: July 29 panic low and current equity positioning (Priority: 5/5): Berg explains why he flipped from short to fully long after the late-July selloff, emphasizing panic liquidation, positive divergence in the SPX, and a sharp rebound across risk assets. Cycle dates, gaps, and divergence analysis (Priority: 5/5): He uses cycle dates and gap behavior to judge whether the current rebound is impulsive or exhausted, warning that the Nasdaq 100, SOX, and Korea remain weaker than the SPX. April buy signals and forward projections (Priority: 5/5): Berg walks through a cluster of rare buy signals in late March and April that, in his view, support higher forward SPX projections despite near-term caution. Why bottoms are easier than tops (Priority: 4/5): He argues technicians are better at identifying lows than highs because panic selling at bottoms is more measurable than rounded, rolling tops. Retail model and long-term performance (Priority: 4/5): Berg presents his simplified retail strategy that stays long until a drawdown triggers an exit, claiming very strong compounded returns and low volatility over decades. Gold, silver, and bonds outlook (Priority: 4/5): He reiterates that gold and silver likely made major highs earlier in the year, while long-term bond yields should rise substantially from current levels.

Key Arguments: The July 29 low looked like a panic low with positive divergence in the SPX, so being long was the correct tactical response. The rebound may be short-term only because the Nasdaq 100, SOX, and Korea still lagged badly versus SPX, indicating a possible retest of lows. Exhaustive upside gaps after a sharp decline can mark exhaustion, not just breakouts, especially when follow-through is weak. A cluster of rare April buy signals across multiple indices supports bullish medium-term projections for the SPX. Market bottoms are easier to call than tops because bottoms feature broad panic and rare statistical signatures, while tops tend to be rolling and subtle. Gold and silver likely topped on a multi-year basis in January; the recent rallies are viewed as countertrend moves. The 30-year Treasury yield can plausibly rise to 6%-8% over time because ultra-low yields were abnormal and bonds remain expensive.

Data Points: Current institutional positioning: 100% long overall - Berg described his current book as fully long after the July 29-30 panic low SPY allocation: Nearly 50% long - Largest position in his diversified long book SOX allocation: 20% long - He emphasized semiconductors as deeply oversold after a major decline NASDAQ 100 allocation: 10% long - One of the main rebound exposures Russell 2000 allocation: ~10% long - Part of the small-cap rebound positioning Korea (EWY/COSPI) allocation: 5% to nearly 10% long - Used as a proxy for the semiconductor-heavy Korea trade Philadelphia Semiconductor Index decline: 28.73% - Peak-to-trough decline into the July 29 low KOSPI decline: 43.93% in 27 days - Example of crash-like selloff that preceded the July 29 low SPX divergence: July 29 low remained above June low - Berg treated this as a positive divergence and a bullish signal SPX Friday close: New closing high - He cited this as evidence the market had rebounded from the panic low Nasdaq 100 below prior highs: 3.02% below June 2 high - Used to argue breadth/leadership divergences remain Philadelphia Semiconductor Index below peak: 15.57% below June 22 peak - Supports caution that leadership had not fully recovered Historical buy signals in late March/April: Over 30 buy signals - Cluster of rare signals that formed the basis for bullish projections April 10 signal projection: Minimum 79.42; median max 89.53 - Based on NASDAQ 100 decline/holding-low pattern April 13 signal projection: Minimum 82.42; median max 12.27% higher (as described) - Triggered after SPX decline and strong recovery thrust April 14 signal projection: Minimum 88.26; median max 18% higher - Russell 2000 had its greatest 10-day rate of change in five years April 15 signal projection: Minimum 84.94; median 97.67 - Multi-cap equal-weight deviation-from-trend thrust signal April 16 signal projection: Minimum 79.70; median max 17% higher - SPX held its low for 12 days and then rose 10% above the prior low April 20 signal projection: Minimum 86.00; median 94.00 - VIX/VXN and momentum thrust conditions April 22 signal projection: Minimum 85.43; median 92.99 - Russell above its 5-day moving average for 16 days plus NASDAQ decline/hold conditions April 27 signal projection: Minimum 82.86; median max 89.58 - NASDAQ up 16 of 19 days after a 10% decline; only partially in line with history at the time Combined April signals projection: Minimum 82.86.21; median max 89.58.23 - Aggregate expected SPX path from the full signal cluster Historical retail model performance: $10,000 grew to $1,152,076,996.13 - Illustrated long-term compounding under his simple long/T-bill system Retail model annualized return: 18.4% per annum - Claimed for the long-term SPX total-return strategy Winning long trades: 91% profitable - Retail model historical long trades Time in market / T-bills: 81% in market, 19.9% in T-bills - Describes the simplicity and cash-management of the retail model Gold-to-cash timing: Sold gold on Jan. 29 at/near the high - Berg cited this as a successful long-term metals call Silver technical move: ~30% rally mentioned - Used as a countertrend example within a broader metals bear case 30-year Treasury yield: 5.424% - Berg argued yields are still low versus historical norms Potential long-run Treasury yield range: 6% to 8% - His view of a normal long-run yield range

Pivotal Quotes: "We’re positioned 100% long." — Milton Berg: His opening answer on current portfolio posture after the July 29-30 panic low "I challenge the bears." — Milton Berg: The host asked whether Berg’s confidence was as high as in the 2023 bullish call "It’s much easier to call a market low. You don’t have to call every market top." — Milton Berg: He explained why his framework is more reliable at bottoms than peaks

Implications: Berg is tactically bullish but not complacent: listeners should expect possible near-term volatility, especially in semis and Korea, while still respecting the stronger April-based bullish setup. He remains bearish on gold/silver long term and expects higher bond yields over time.