In today's episode, Tyler breaks down the market's poor performance to start the week. Pointing out that despite today's setback our major indexes remain just a few percentage points away from their ATHs, and we continue to see bullish signals underneath the hood of this market.

Dont look back because the market is closed. Good Monday afternoon, everyone. Tyler Herriage here with you for Todays VRA investing podcast. Hope everyone had a great weekend out there and a great start to your week this week, even despite the fact that the markets didn’t have a great day to kick off the week, although this morning it looked a little different. We started out the day futures were higher, but then the market opened and unfortunately that just about marked the highs of the day. We got a little bit of a rally early on in the session, and those did mark the highs of the day as we slowly sold off more and more throughout the session to finish close to the lows of the day. Maybe a little bit off of that, depending on where on you’re looking. But, you know, not a great start to the week certainly.

And when you tune in on days like today to the financial mainstream media, wherever that may be, Bloomberg, CNBC, Fox Business, and most financial websites as well, just media outlets in general for finance, you know, everyone is looking for a reason for every move in the market, you know, and so when you’re seeing a lot of that, understand a big part of that, Kip talks about it all the time as well, list building from perma bears. But also they’re trying to sell you a story, a narrative as to why what is happening is happening. You know, it may not necessarily always be to get you to buy or sell a stock, but maybe just to tune into their program more often as well. So on days like today, we do try to ignore the hype and really listen to what the market is telling us. But if you did tune into some of those sources today, you probably saw a lot of commentators talking about the sell off being due to bond yields. Yes, the ten year was up today, making another multi month high here. But this morning, futures were higher and bond yields were higher then as well. So, you know, as you start to look into it, maybe that’s not the reason there.

[00:02:23]:
Then the next one that a lot of people are talking about today, naturally a big deal has been the conflict in the Middle east, the geopolitical tension that is going on right now. And that is certainly a possibility because what it means more than anything is uncertainty. And if there’s anything that the market really hates, it is uncertainty. But there’s always another explanation out there. I’m sure you could have found five more if you’re scrolling through, watching the news at all today. And we’re big fans of Occam’s razor here, you know, the simplest solution is usually you know, the simplest answer is usually the right one. Not always the case, but the simplest explanation for a day like today, one that’s far more simple, is that this is a perfectly normal market pullback. That really, until today, has been very orderly so far.

And even after today, we’re still just a few percentage points away from all time highs in the S and P in the Nasdaq. And even the Dow pullbacks are part of a healthy bull market. They’re normal. They happen every single time. And so to see this many investors running for the exit this quickly is another reason why we’ve remained so bullish. So let’s take a quick look here because I want to, I want you to see just how far away we are from all time highs, or should I say how close we are. The S and P has been the strongest in this recent pullback, just 3.85% away from an all time high. Again, that’s not 5%.

A lot of people, if you watch the news today, you might think that we’re 10% away from an all time high, 3.85% Nasdaq in the same boat, less than 4% away from an all time high, 3.94%. The Dow, on the other hand, a little further away, 5.39%. But still not even to a technical correction here. So what we’ve seen so far really has been a shallow pullback, despite the fact we’ve seen sentiment indexes starting to get hit. The fear and greed index just hit a believer 41 today, which is again fear mode for the first time since last November that the fear in greed index has been in to fear. So bullish sentiment quickly has been sucked out of the room here at just the first signs of trouble. Forget the fact that we’re still in range of all time highs, a couple of good sessions away from all time highs still. And one other factor here is that we had been hitting overbought levels for our major sectors, some of our favorite names and major indexes as well.

[00:05:20]:
And now we’re starting to approach oversold conditions. We still have some ways to go before we get to extreme oversold levels, but in young bull markets like this, as we’ve said here, often we’re just in year two of this bull market. We don’t always get back to those levels. The market likes to suck as many people out as quickly as possible and get right back off to the races. So we’ll see if that’s what we get here. But it’s on days like today and in periods like we’re in right now, where I think it’s important that we keep repeating this, that we talk about it here often on the podcast. But on a day like today, especially if we have any new listeners out there, this bears repeating. So if you take nothing else away from this podcast today, check this out.

Because we’ve called for this bull market to be a roaring 2020s. When you zoom out, it continues to be what we see, a long term structural market of size and scope. And we’ve really compared this period a lot to the era of 1995 to 2000, which we see we’re still in about the 1995 time period, really, when the Nasdaq from there rallied 575%. Most people like to focus on how that time period ended with the.com.com bust, right. But there was a whole lot of money to be made there during that five year period. And during that time period, this might surprise some people. There were multiple corrections of 10% or more. So we’re not even at that level yet, included one technical bear market as well that pulled back over 20%.

So the point here being is if you, if you feel like you’ve missed this move or you feel like you should have sold sooner, don’t get down about it. You know, if you’re not positioned yet again, don’t get down about it. The time to be buying is when you don’t want to be right. When everyone else is saying sell, sell, sell. We’re getting a lot of that out there now. And so we want to be prepared to continue to buy this dip, because that is continues to be the smart money move. We’ve said that since October of 2022, nothing has changed there. Even if we were to get a little bit deeper of a pullback here, it continues to remain our view.

[00:07:43]:
So that doesn’t mean we’re not still looking around at interesting things that happen in the market. And we did see a few of those today. One of them was that there really wasn’t much of a flight to safety trade today. Gold having a good day today. Still right in the range of $3,400 an ounce right now. The other flight to safety that you usually see is to bond, which is why it was interesting that bond yields were up so much today. The ten year up 2.87% to a 4.62 again, that is its highest level since November of last year. So another multi month high here.

So we did not see that flight to safety today, especially on geopolitical tensions. That is something that you usually see. So that’s of interest to us here, we’re going to continue to watch that as well as international bond yields as well. And the strength of the dollar has continued as well. Also an interesting one is the US dollar against the yen I believe just saw making multi month highs as well. You know, we’re keeping an eye on these things, but yields in this range in and of themselves don’t give us a reason to sell this market from here at a 4.6. The next real resistance point isn’t until about 5%. It doesn’t mean that we have to get all the way back there, but that’s the next real resistance point.

But our view also remains unchanged there, that over the longer term bond yields will continue to head lower if they remain a little bit higher for longer. That also doesn’t concern us here. One it means that the economy has remained stronger than expected. We’re seeing signs of weakening. Absolutely. And that could make a turn really quick on the Fed’s stance of bond yields. I lost my train of thought there about the second point. Oh yes, sorry.

[00:09:45]:
So from the 1995 to 2000 dot melt up, the ten year averaged over 6% during that time. So no yields at a 4.6, even a 5% don’t concern us there as a reason they can really derail this market. All right, sorry about that. But again, investors here have begun to run for the exit. We’ll see if it shows up this week more in the AAIII survey. It’s begun to fall some, but the fear and greed index is really interesting here, falling to a 41 today. And now let’s move past this negativity here. I spent a little bit more time than I planned on to start this podcast, but what this really shows us I spoke about we’re reaching oversold levels, we’re nowhere near overbought.

We’re just in range of all time highs, and bullishness has left the building. This is actually a fantastic setup going forward from here as we are about to enter the next round of earnings. Q one, earnings here are starting, just beginning to heat up this week. We’ve got some big tech names coming up and this is really not tough to say even really the beginning, but we do have some big ones. We got ASML, the chip producer, coming out on Wednesday before the open. Then on Thursday we’ll get Taiwan semi, you know, massive one out there. So Thursday will really be an interesting session for the semis. Both of those companies have been performing well in earnings reports recently.

We expect that to continue. Then on Thursday after the close, we’ll get Netflix as well. And we’ll get our first look outside of the tech space at home builders with Doctor Horton reporting on Thursday in the morning as well. So stay tuned. We’ll be reporting here on Q one. Earnings every day at the market close again, we’re just getting started here, but you can join us@vraletter.com click that podcast link at the top. All right, next up here, let’s take a quick look at our major indexes. I’ve already covered them quite a bit here, at least what they’ve done since their all time high.

[00:11:52]:
But quickly, the Dow led the way today, but it was up as much as 400 points earlier in the session. So roughly a 600 point swing here to finish down 248 points at 37,735. After that, the S and P 500 down 1.2%, excuse me, to 5061. After that, we have the small caps, down 1.37% to 1975. And lastly here, the Nasdaq. You don’t want to see tech leading the way lower, but one day does not make a trend. Nasdaq down 1.79% to 15,885 and one slight positive. The semis were down fairly big today, but less than the Nasdaq.

So at least they were leading the Nasdaq semis down about 1.5% on the day. Next up here, let’s take a look at our internals, where we had some early positive readings, but like Nasdaq volume earlier in the session, but much like our major indexes, that did fall into the close. Declining stocks beating out, advancing stocks coming in over five to one negative on the NYSE, just slightly better on the Nasdaq, which was three to one negative. Not what you want to see, you know, but we did get a little bit, I have one kind of bright spot, if you want to look at it that way. Coming up here in a second, 52 week highs and lows also coming in negative. Not a big number on NYSE. 89 stocks hitting 52 week lows. So certainly could have been worse.

We had just 20 stocks hitting 52 week highs, though the Nasdaq was a little bit worse. 338 stocks to just 36, hitting 52 week highs. Remember here, some of these Nasdaq names are traded multiple times. They were SPAC names. They maybe not the highest quality names, so tough to read too much into that here. But lastly, for volume, luckily here, not an 80% downside volume. Day. We got one of those last week.

[00:13:56]:
We were just shy of 78.5% downside volume on the NYSE. Now, you might be asking Tyler, why is that a bright spot on the day? Well, a lot of old school technicians really look at this percentage of downside volume. And to the upside as well. There’s both bullish and bearish volume. Breath rusts. Right. According to old school technicians. And these are fairly reliable technical indicators.

And according to Walter Diemer, who’s one of the best of the old school technicians, we would still need multiple days of 90% plus downside volume before this was really significant. So, yes, volume numbers, not great, but, you know, not in the realm of something bad is about to happen bad either. So, good to know slightly better for the volume on the Nasdaq coming in, just 71% downside volume. So no big concerns there. Next up here, taking a look at our sectors on the day to day. All eleven s and P 500 sectors finishing lower on the day. So again, no flight to safety here. We were led by, if you want to call it that, healthcare down just fractionally on the day.

After that, consumer staples and materials. Our biggest losers on the day were tech, real estate and communication services. Before I move on to the commodity watch, I did just want to take one more look at our major names here. Apple really bucked the trend last week while the rest of the market was down. Amazon and Google did the same, all of them down on the day to day to kick off the week here. So, again, even the mega caps can’t catch a flight to safety here. But there was one area that did, and it is commodities. Gold now up 1% on the day to $2,399 an ounce.

[00:15:57]:
It did briefly cross back above $2,400 an ounce there for gold. I will point out the miners were lower on the day. But again, no flight to safety anywhere in stocks today at least. Silver continuing its move higher, up 2.19% to $28.95 in an ounce. Next up here, copper up as well, 2.8% to $4.37 a pound. Check the chart on copper here at 437. That is its highest level. That is a new.

Let’s see here. That is its highest level since June of 2022 at 437 a pound. Doctor, copper really starting to take off here. And then finally here for our commodity watch, oil. You know, this was interesting today, and I think a lot of people are looking at this chart and thinking something similar interesting wise, is happening here with oil, which is, if this conflict in the Middle east was really about to go to the next level, shouldn’t oil prices be seeing a much bigger move higher? Yes, we’ve seen a little bit of a move higher over the last couple of months. A lot of that people talk about is attributed to seasonality, that this is a high period of demand for oil. So how much of this is just a natural move higher and how much is being caused by international conflict? Well, today was a bit of a deciding factor on that because we just had a major weekend of conflict, right? And yet, on the other side of that weekend, oil is essentially flat right now at $85.65 a barrel. It’s really been hovering around that flat level all day today.

So, you know, again, one day doesn’t make a trend here, something we’re keeping an eye on. But as of today, you know, this might be signaling that hopefully, you know, very much so, hopefully that this conflict in the Middle east doesn’t turn into something bigger soon here. And finally for today, bitcoin saw a big hit over the weekend, has gained some of that back now. All right, take that back. It has lost some more since starting this podcast today. Now down 1.2% at $63,071 of bitcoin. No concerns here for us. We remain long and strong bitcoin, as we head into the halving, which is taking place this week.

[00:18:30]:
We’ve seen a lot of minor pullbacks. I mean, bitcoin’s been on an incredible run lately. So even at 63,000, just broke below that 62 99. It’s been on an amazing run still, nonetheless. And we’ve seen pullbacks ahead of halvings before. The real bullish action takes place once the halving does, and then you see the really big move higher from there. So bitcoin again, down slightly on the day. 62,995, folks.

That is all that we have time for here today. Please be sure to subscribe to receive our VRA podcast every day at the market close. You can sign up@vraletter.com click the podcast link at the top. You can find our transcripts and other items there as well, along with our 14 day free trial. So come and check us out. We’d love to have you with us. Thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close.