In today's episode, Tyler covers the latest in market action that saw our markets kick off the week with all-time highs but faced a slightly rocky session. We'll explore why sentiment hasn't quite kept up with the bullish trends, how the Fear and Greed Index stands surprisingly neutral, and what this means for the future. Tyler also covers what to watch for in this week of market action. Tune into today's podcast to learn more

Don’t look back because the market is closed. Good Monday afternoon everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a great start to your week out there this week. Hope you had a great weekend here as well. As we begin to gear up for the holiday season here, I know everyone’s busy out there getting ready for the holiday festivities, getting their shopping done. So we’ll try to keep this podcast short and sweet for you here today. But it is an eventful week coming up here, another one for our markets.

And to start off the week, not quite the action you want to see, but there were certainly some big bright spots out there as well. And as you know, if you’ve been with us here for a while, we remain extremely bullish on this market. The the one thing that has holding us back a little bit right now to start off the month of December is seasonality, which is over the medium term here, very, very bullish and really the short term here as well. But the beginning of December can be a slower period for the market. Now tough to say that it’s a slow period for the market when we started out the day at all time highs. But what is so interesting is that sentiment just hasn’t kept up with this market. Now we’ll see it in some places like the AAII Investor Sentiment Survey last week did see a big increase in bullish investors, but still nowhere, nowhere near euphoric types of levels. We are starting to see more call buying than put buying, but again nowhere near the irrational exuberance or excessive optimism for this market.

[00:01:54]:
And I bring that up specifically for the Fear and Greed index here today. Now if you tuned into last week’s podcast, we talked about this a lot. It’s very interesting here that we have so really all of our major indexes within a very small range away from their all time highs. Again, like I said, we just hit all time highs at the open today for the Nasdaq, right? So despite that, the fear and greed index again all time highs this morning you might expect the Fear of Greed index at least to be at greed, if not extreme greed. After the run that we’ve been on since the November election, the result might shock you a little bit. We’re at just a 50 which is neutral, almost leaning towards fear mode here despite being at all time highs. Now as contrarians, we love to see that. It tells us that this market has a whole lot higher to go.

[00:02:57]:
Because bull markets don’t die with a whimper, they die in a bang. And certainly we have not seen that kind of a bang just yet. Yes, it’s been a phenomenal run since the election, a run that we see is nowhere close to being done here just yet. Now our major indexes are either at or approaching extreme overbought levels. That’s about when we would expect a pause from the market. But with this kind of momentum and the level of cash on the sidelines that we can’t forget about, we have record setting amounts of funds in money market accounts right now that is either going to come off the sidelines or miss out on massive gains into the market. We think it’s going to be the latter, which adds much needed fuel to the fire to keep this market continuing higher from here. So as you know, we do remain extremely bullish here and we think that the pullbacks will be short and sweet.

[00:04:02]:
The dips will be increasingly shorter actually going forward. And going back to our call From October of 2022, buying the dip remains the smart money play here and nothing has changed going forward from the VRA here. So that being said, let’s take a look at what we have to expect from the coming week. Here is it is a busy week for on the economic side of things this week. Yeah, we heard from Jay Powell and some Fed speakers last week. We got the jobs number back. Now we’ll get inflation data as we’ve got cpi, the Consumer Price Index and PPI Producer Price Index coming out on Wednesday and Thursday of this week, which will be culminated next week by the final FOMC meeting of 2024. That will be next Wednesday where the odds of a rate cut are firmly now at about an 85% last I saw on the CME’s fed watch tool.

[00:05:07]:
A lot of people expecting it might be the final cut before the Fed pauses the inflation data this week will have something to say about that. So that will tell us a little bit more this week. We’ll see what Jay Powell’s comments are next week. You can tune in here to the VRA Investing podcast. We’ll be reporting on that here all week this week and into next week as well. That being said, let’s take a look at our market action on the day today where we started off very strong today right out the gate. You know, major indexes higher across the board, semis leading higher as well, but we ended up finishing closer to our lows of the day. We got a little bit of a pop there in the last 10 minutes of trading or so to finish off the lows of the day, but not by a whole lot.

Again here, no big warning signs though from this market. Again, we think the dips are going to be short and sweet and wait till I get to the internals. We’re seeing a bit of a pattern change here that we want to see continue. So for our major indexes we were led lower by the Russell 2000 down almost 7/10 of 1% to 2,392. After that we had the NASDAQ down just over 6/10 of 1% at 19,736. After that the S P down also just over 6/10 of 1 percent and the Dow Jones down just over half a percent at 44,401. Now I do want to get to the internals on the day because these were different than what we’ve seen earlier. There were a couple of times over the last few weeks that we’ve seen our markets hitting all time highs while the internals were mixed on the day.

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You know, we talked about it here on the podcast then that’s not what we wanted to see and we wanted to see the internals start to turn around. So I was a little bit surprised at midday today checking the internals where our major indexes had turned lower. We were red across the board at about midday today, but checking the internals we were positive across the board. Again that’s a pattern change, the kind of pattern change that you’d like to see, right, if you’re bullish. So we closed a little bit off of those levels but still a pretty good day overall from the internals. Now we did have more declining stocks than advancing stocks on both the Nyse and the NASDAQ but just barely there. 52 week highs lows came in positive for both the NYSE and the NASDAQ in a big way too big beats there. And then volume finishing positive for both the NYSE and the NASDAQ as well.

Both solid beats. No 2 to 1 beats or 70, 80% upside volume kind of day today. But still again on a day with our major indexes lower across the board, finishing just slightly off the lows of the day. To have, you know, even this positive of internals, two out of three here, you know, we’ll call that a win on the day to day. We want to see the improvement in the internals continue here. Kip and I both have been talking about this rotational aspect of this market that since the November election, you know, we’ve seen a broadening from our major indexes. We’ve seen Small caps, right, getting back to 52 week highs for the first time in a while. So our other names, the mid to small cap names, were hitting overbought levels while the Generals, the Magnificent seven, as many people call them, weren’t really playing their part just yet.

[00:08:47]:
Now we’re starting to see the Generals earn their stripes here. Apple hitting an all time high today. We had Google up half a percent as well. Microsoft having a minor breakout here. You know, we don’t own Microsoft here in the portfolio. Not a huge fan of the company personally, but to see them breaking out here, right? This is a $3.3 trillion company. Yes, it matters for the market even if we don’t love it. But we’re breaking out, you know, not quite to back to the all time highs, but we had a bit of a short term double top here that today really broke out of, kind of confirmed that move above it.

Now we are reaching overbought levels there. But again in this type of a market rotation where we saw small to mid caps leading post November, they got overbought. This is when you get the rotation into the mega cap names again. This is when the Generals earn their stripes and it’s exactly what we’re seeing from them right now. The rest of the market works off its overbought conditions and the timing couldn’t line up better with seasonality. I mentioned this earlier as well, but as we start to get to the middle to latter half of December, that’s when seasonality really kicks in. That’s the Santa Claus rally, which really is the last five days of the year into the first two trading sessions of the new year. And we want to see Santa Claus come to town this year for sure.

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It bodes well for the following year which as you know, we do remain extremely bullish on here as well. We’ve just entered year three of this bull market. For fundamental and technical reasons, we remain extremely bullish. Now remember I talked about this in the last couple weeks as well. We talk about it often, but especially over the last couple of weeks. The average bull market runs six to seven years. So we’re, you know, still in our view the early innings of this bull market. All right, next up here, looking at our sectors on the day.

Similar story was looking better earlier in the session, but we finished with just 2 out of our 11 sectors higher on the day today that was healthcare and real estate. While our laggards on the day, financials, communication services and utilities. Now turning to our VRA commodity watch on the day, there was some green on the screen here as the gold miners really came roaring out of the gate this morning and finished higher as well nicely. But we were up as much as 5% on GDX. The gold mining ETF earlier in the session finished up about 3% on the day. So still a good day. And exactly what you want to see is the gold miners outperforming the commodity itself. This applies to most sectors, right? There’s always kind of a you want to see this leading this part, right? You want to see semis leading tech.

[00:11:41]:
You want to see energy stocks leading the commodity as well. So you want to see really it kind of started with gold, that kind of thesis that you wanted to see the mining stocks leading the precious metal. So we had gold up 8, 10, almost 9/10 of 1% on the day to 2683. So good to 3 see over 3 to 1 outperformance from the gold miners today. We think that’s bullish going forward as well. Silver here up a big 2.7% on the day today at $32.45 an ounce. Next up, copper up one and a half percent on the day to $4.26 a pound. And oil still hovering below $70 a barrel here up 1.4% on the day to $68.16 a barrel.

And finally here, bitcoin taking a little bit of a pause here still now doubt, excuse me, now down 3 over 3% on the day at 96 837. You know, we’ve talked about this a lot here over the the last few weeks. It’s been a hell of a run for bitcoin from the election to now. So a little pause again, doesn’t concern us here. We remain extremely bullish on bitcoin going forward. Folks, that is all that we have time for here today. Please be sure to subscribe to receive our VRA podcasts every day at the market close. You can sign up@vra letter.com click the podcast link at the top and we’d love to have you with us now.

[00:13:12]:
Also, I meant to mention this earlier in the podcast. Our holiday special is still running. It goes until midnight tomorrow night. So if you haven’t taken advantage of that offer yet and you would like to, you know, email at support@vrainsider.com we’ll make sure that you get that information as well. If you’re already on our podcast list or subscribe to our blog, you’ll receive an email about this. But again, if you haven’t seen it yet, reach out to us at support@vrainsider.com so that’s all that we have time for here today. Thanks again for tuning in. Until next time.

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