In a recent interview by Palisades Gold Radio, the trajectory of American markets and the enduring allure of gold were dissected by John Johnston, a formidable voice in the precious metals arena. With an impressive 47-year trading career, including three decades within the bustling environments of the Comex and NYMEX, Johnston, also known as JJ, brought his seasoned perspective to the forefront. As the writer behind the insightful "Market Vibes by Aliosha" Substack, his analysis carries the weight of experience and a deep understanding of market psychology.
The conversation, steered by Palisades Gold Radio host Tom Bodri, delved into Johnston's current market outlook, his trading philosophy honed over decades, and his intriguing thesis on a potential "new bull market" in America, alongside his thoughts on the seemingly unstoppable rise of gold.
Johnston's trading ethos is built on conviction and a pragmatic acceptance of being wrong. "Nothing works better than being right," he quipped, emphasizing the necessity of forming a strong view before entering a trade. His formative years on the Comex and NYMEX trading floors instilled in him the crucial elements of risk management and position sizing. "A very big part of training successfully is understanding position size," he explained, highlighting that even correct directional calls can falter with improper allocation.
His analytical toolkit primarily consists of a 45-bar slow stochastic oscillator for gauging momentum and Welles Wilder's directional movement index for identifying trends – tools he deems universally effective across all asset classes. Johnston stressed that trading is as much about emotional intelligence as it is about technical acumen. "You have to recognize how you feel when you trade more than how you think. Most of trading is reacting, not thinking," he asserted.
A significant portion of the interview focused on Johnston's intriguing thesis regarding the potential impact of the Trump administration's economic policies. He believes that initiatives such as tariffs and tax reforms aimed at the lower 50% of the income bracket could lead to a fundamental reshaping of the American economy. "Trump's mission… is going to make the first $200,000 of your income tax-free and he's going to compensate for that with tariffs," Johnston explained, envisioning a scenario where this could "stop the debt spiral" and organically redistribute wealth.
He anticipates this shift could foster a "new bull market" driven by a broader base of companies as anti-monopoly sentiments potentially lead to the breakup of large tech conglomerates. "Wall Street is going to start thinking spin-off and stop thinking merger," he predicted, suggesting a revitalization of smaller and mid-sized enterprises.
However, Johnston also acknowledged the inherent risks, including potential resistance from established, powerful interests. Despite these concerns, he hopes for a "shallow and quick" recession, believing that the current administration has the potential to navigate the economic landscape effectively.