In this episode, Tyler discusses the major stock market action of the day, including the impact of Bitcoin hitting an all-time high and the subsequent pullback. He also analyzes the market sentiment and the upcoming monetary policy update by J Powell. Tyler provides insights into the market internals, sector performance, and the VRA commodity watch, including all-time highs in Gold

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Tyler Herriage here with you for today’s VRA investing podcast. It was a pretty wild day today. After yesterday. We saw some all time highs to kick off the week as Kip covered yesterday. We saw it in the semis, we saw in the SB 500 before it pulled back. And at the open this morning, we got an all time high from bitcoin, getting above $69,000 of bitcoin before pulling back now down 7% on the day.

And that peak happened this morning. Bitcoin started hitting lower right after, and our major indexes quickly followed there as well, finishing lower across the board today. Really a fairly good size down day on the day after those all time highs yesterday, as a day like today where you start to see the perma bears really come out, even though we just hit an all time high yesterday, they’ll be posting like, hey, I’ve been saying this for weeks, that the market was a top. Well, you missed it for weeks until we get one bad down day. They like to get really loud really fast. Saw a lot of that out there today. We saw the fear and greed index collapse today. It’ll be interesting to see what the AI investor sentiment survey does this week as lot after a big rally like we’ve had, it’s not uncommon to get a bit of a shakeout.

[00:01:41]:
And as we see it here, that’s all that this is a little bit of a shakeout before our bull market continues its run higher. These are part of healthy bull markets. One day is not a huge deal here. And overall, our view remains unchanged, that the smart money move has been and will continue to be to buy the dip. And there are a few reasons I say that, especially today, and I’ll cover that on this podcast as well. But at the end of the day, know that we have no concerns for us here. Again, all part of a healthy bull market to have some shakeouts along the way. And as the old adage goes as well, bull markets take the stairs up and take the escalator down.

We’ve got a little bit of that today, but really, especially when you look under the surface, it really wasn’t as bad as it may have seemed if you just looked at the headline numbers on the day to day. So stay tuned. I’ll be covering that all here today on the podcast. But a little bit of today’s action might be attributed to the fact that we’re about to have back to back days of Jay Powell testimony when this guy know a tiger can’t change his stripes. He’s had a few good speeches recently where the market was able to rally on days that he spoke. But the trend, by and large, when Jay Powell gets in front of a microphone, he sends the market lower. And so we’ll see what happens in these upcoming days of testimony. But we have first tomorrow the US House Financial Services Committee, and then on Thursday, the Senate banking committee as well.

This is their bi annual monetary policy update. Again, that will be on Thursday. And who knows what this guy is going to say. Kipp has said this as well for some time. He can be unpredictable, which is not a quality you want in a Federal Reserve chairman. And no doubt that he’s a little bit stubborn as well. But we really see it as unlikely that he will say anything beyond what he’s already said, anything that would shock the market here. We doubt at least that he’s going to say something like, we’ve seen this economic strength and we’re taking rate cuts off the table for 2024.

[00:04:00]:
We don’t see something like that happening now. What he says could spark a little volatility in the short term. Yes, absolutely, that could be the case. But at the end of the day, just this morning, we got back weaker than expected economic data. We’ve seen some signs that the economy is slowing. Now, don’t get it confused. We still believe here that we’re seeing a very strong economy still being powered by the Trump economic miracle. He said it when he left office.

Trump did that. He set us up for good times after he was president. A lot of his policies are still in place in regards to business policies, at least. And so, yes, we are starting to see signs of weakness in the economy. By no means am I saying a weak economy, but we’re seeing that in yields as well. That’s why yields are continuing to fall now down another 1.94% today at a 4.13 on the ten year yield. That is a little bit of a new low here, lowest level since the beginning of February. And again, kind of going back to Jay Powell here, who knows what he’s going to say.

Exactly. But yields continuing to fall shows us a little bit of what the market is expecting. That, no, we won’t be higher for longer, for too much longer, although we don’t mind the higher for longer theme. We did say that the Fed’s last few rate cuts were a mistake. Kip covered this yesterday as well. But at the end of the day, when the Fed starts cutting rates, unless it’s just know, hey, we’re going to do two three rate cuts and be done type environment. Usually when the Fed starts cutting rates is because something’s gone wrong. It’s normally not a great sign for the stock market.

[00:05:47]:
So the longer they can hold off, the better it might actually be for this market. Although we think they’re a little too restrictive here. That remains our view as well. So that said, let’s take a look at our market action on the day today. As I mentioned earlier, some weakness today, but we did get a nice final 30 minutes of trading or so to finish off of the lows of the day for our major indexes. But let’s cover those here. Now. Small caps actually leading the way, if you want to call it that.

They’ve been doing that for the last few sessions as well. We’ve pointed out the chart comparing the strength of the s and p to small caps here. So small caps have been outperforming for a little while here now. And we’ll count today as that. Continuing as the small caps were down the least today, just under 1% at 2053 for the Russell 2000. Next up, the s and P 500 down just over 1%, 1.2% to 5078 for the SP. Then the Dow Jones down 1.4%, or kind of a big number here. Over 400 points lower on the day to 38,585.

Still, at that high of a number, 400 doesn’t start to sound like quite as much. And finally here, the Nasdaq down 1.65%, or 267 points to 15,939. I will point out here, I wouldn’t call it good, but this is what you want to see. The semis were down less than tech, maybe not by a significant amount, but they were down less. So you’d like to see the semis leading to the upside and on the downside, holding up a little bit better. We got some of that today. Still down one and a half percent though for the semis, which just hit an all time high yesterday. So no concerns for us here.

[00:07:42]:
As we say, often new highs beget new highs. We think that that is still the case and that buying the dip will continue to be the smart money move here. But what you do actually like to see on a day like today is bullish. Investors quickly running for the exit. There is no shortage of top callers out there today saying that they just so happened to sell yesterday. It was super convenient. So the fear and greed index saw a big drop today. We were at extreme greed levels just yesterday.

Now it was a 78. So not a whole lot above where we are now. But intraday fell all the way down to a 70, which is at least out of extreme greed territory. And into greed territory. We finished actually at a 74. So that little smart money hour got people back in for a little bit. But again, when you see those types of changes, that shows us that the weak hands are being shaken out, right. These are the opportunities that we look for.

If we were looking at a market top here, you would see fear and greed index remaining the same. On a day like today, people just diamond hands holding everything because this market has no choice but to go higher. Those are the signs of a top. We’re not seeing anything like that here. Again, we see this as normal action. Remember, we just wrapped up four positive months in a row for the S, P and the Nasdaq. I believe the Dow in there as well, only small caps, weren’t up the last four months in a row. That’s an incredible run.

[00:09:17]:
And the gains were substantial as well. And so what are the stats we’ve gone back to, and we’re going to continue to go back to here for a little while, that this is an important one. Not to forget, when the markets are higher, November, December, January, February, they’re higher one year later. This is the S and P 500 is higher one year later, 100% of the time. Believe that 14 for 14 or something strong like that. I have to go back and check my notes. But still any weakness in those previous instances? Because there were a few readings where one or three months later the SB might have been negative. Those dips were quickly bought and erased by the next twelve months.

So any dips over the next twelve months, you’ve been very happy with your purchases in the long run. We expect that to be the case here once again. All right, next up here, taking a look at our internals on the day to day. We got fantastic numbers here for such a big down day. Kip and I were looking at it throughout the day today talking about it. Hey, these internals are holding up very well for a day like today. Even at the lows of the day, we were really just flat to negative almost across the board here. So let’s cover a few of these here.

Declining stocks did beat out advancing stocks, but by less than 500 issues on the NYSE, no two to one beats or anything, or for the Nasdaq for that matter, either. Nasdaq was closer to two to one negative, but not there. That’s not the kind of action that tells us that a top is in place. If the top were in place, we’d see big negative numbers here for all of our internal readings, and then we’re just not seeing that yet. And take a look at this. 52 week highs to lows coming in positive on the day today. Now, this is a bit of a lagging indicator, so I’d be remiss if I didn’t bring that up here because I talk about it so often on the bad days. But still good numbers here from 52 week highs to lows coming in over something like looks about four and a half to one positive on the NYSE and just slightly positive on the Nasdaq.

[00:11:30]:
But combined here, over two to one positive for the NYSE and the Nasdaq, again, positive for both. So really good to see here. And then lastly, volume, just slightly negative as well. No two to one beats, not even close to it on the day today. So it may not sound like fantastic numbers, but on a day with the Dow down over 400 points, Nasdaq down over 260 points, these are really very good readings. Overall, we’re not seeing 80% downside volume kind of days. That tells us that this should be short lived as well. Next up here, taking a look at our sectors on the day to day, we just finished with just three out of our eleven sectors higher on the day today.

Energy catching a bid leading the way, followed there by consumer staples and then financials, which even on a bad day, you can’t stop. The all time highs as the financials hit an all time high here today. Regional banks up early on in the session were up as much as 4%. Let’s see where they finish here. Up over 4%. Finished up over 4%. If we were going to see structural weakness like we saw last year. Right, with the New York bank, Silicon Valley bank imploding, this is an area where it would start to show up.

We saw it last year to see them up on 4% on a day with our major indexes negative across the board. Hey, we’ll take that one as a win as well. On the financials hitting an all time high. That’s not a group. We have no love for the financials here, but hey, it’s part of a healthy bull market. We want to see them doing well. In addition to our other areas, our laggards on the day, as you might expect, tech led the way lower today, followed there by consumer, discretionary and real estate. Let me get one more screen in here.

[00:13:28]:
The home builders, which just hit an all time high yesterday as well. The housing index hit an all time high yesterday as Kip covered these on his podcast yesterday. But still, I mean, as we say here, often new highs beget new highs. So a little bit of a shakeout. Again, not a big concern for us here. If we did get a little bit longer and a worse pullback here, call it even a correction that’s 10% from the highs, is what a technical correction would be. We’d still use it to buy the dip, although we don’t see that as being the case here. All right, finally for today, our VRA commodity watch.

Talk about some more all time highs here as gold hit an all time high today. Got to the highs of 21 50 today. Now up just under half a percent to $2,136 an ounce. After that, silver up down zero point 42% to $23.89 an ounce. Copper now down on the day as well. Just over three tenths of 1% to $3.84 a pound. And oil down as well, down three quarters of 1% to $78.15 a barrel. Finally here for today.

Bitcoin, as I mentioned earlier, hit an all time high this morning, hit above 69,000, now has pulled back down 5.89% to 63,431. I mean, it’s still up phenomenally in just the last week. And so this is a bit of, I hate to say normal action, but in bitcoin, more normal than we would see in our major indexes. Yes, we got a big pullback here. But remember, in the last few weeks, we’ve seen big pullbacks like this in bitcoin that were over with in very short order. This could be the case here once again, as bitcoin again did hit an all time high here. And Anthony Pomplinano, I don’t know how you say his name, but pomp was on CNBC this morning. And I do need to run the numbers on this as well.

[00:15:42]:
But I saw it a couple times out there today, that three out of the last four times that bitcoin hit an all time high, it doubled in less than 18 days. 18 days or less. And three out of the four last times. And remember that at this time, there’s more demand than ever with the etfs that have opened up. We have the having just a little over a month away as well. That is going to cut new supply in half. Right. That’s no small deal here when you have record demand in bitcoin, which is why we’ve remained so long and strong in this group here.

And nothing changes there for us even after a strange day like today, but really kind of part of what bitcoin is here is that volatility. So, 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 at Vra letter, click the podcast link at the top. You can find our transcripts there as well. And of course, we’d love to have you with us. Thanks again for tuning in. Until next time, have a great rest of your day.

We’ll see you back here tomorrow for the close.