(Kitco News) - Investors need to gear up for more choppy and volatile trading during the year's second half, says Katie Stockton, Founder and Managing Partner of Fairlead Strategies, pointing to the key signs to watch.
The critical indicator behind Stockton's forecast is the sign of widespread exhaustion in the equity markets, especially in the Nasdaq 100.
"There are those signs of upside exhaustion that we've got our eyes on," Stockton tells Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "It doesn't mean you go and reduce exposure broadly necessarily, but we've been recommending that our clients consider short-term market hedges from a top-down perspective to manage risk throughout a pullback."
For insights into where Stockton is seeing widespread exhaustion in the marketplace, watch the video above for details.
Gold price
Gold has been trading below $2,375 an ounce for the last two weeks after hitting new all-time highs of above $2,400 in May.
"We saw the breakout at the former resistance; for those who watch, it was around $2,063. And we saw immediate upside follow through. And that's what you want to see. You want to see good upside follow through on the back of a breakout," Stockton noted.
The current pullback is natural, given the overbought territory. "And it's not limited to gold; it's for metals in general, such as silver and copper," Stockton said.
Watch the video above to get Stockton's take on when the downtrend will end and the support levels to watch.
Stockton's price target for gold is at $2,515. "It's not necessarily a stopping point, but certainly a reasonable objective in our opinion," she said.
Bitcoin's target
Since the Federal Reserve announced it is keeping rates steady and signaled only one rate cut this year – down from three cuts forecasted in March – Bitcoin fell around 7%.
For Stockton's support levels in Bitcoin, watch the video above. She also points to Bitcoin's correlation to the Nasdaq 100, which is signaling a new direction for prices.
Stockton's Bitcoin target is around $81,000 following its move towards the record highs of above $70,000 at the beginning of June.
She also identified red-flag levels for gold and Bitcoin. Watch the video above to learn what happens if both assets drop below those levels.
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