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VRA Investing Podcast: Buy the Dip, New Highs, and Rising Stocks Fuel Bullish Outlook

In today's episode, Kip covers the continuing all-time highs from the market, including the bullish trends in various sectors such as semiconductors, small caps, precious metals, and cryptocurrencies. He dives into the significanc ...

Posted On March 07, 2024Episode 1338
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About This Episode

In today's episode, Kip covers the continuing all-time highs from the market, including the bullish trends in various sectors such as semiconductors, small caps, precious metals, and cryptocurrencies. He dives into the significance of all-time highs in cryptocurrencies like bitcoin and the potential for a new bull market in gold.

Transcript

Don’t look back because the market is closed. Good Thursday afternoon, everyone. Kip Herridge here with the daily variant investing podcast. Hope you had a great day today. Another strong day in the market that just won’t stop. This is a new bull market of size and scope, and we are still in the early innings again. Dips should be bought. We had a dip a couple days ago, didn’t we? They last about one day.

Now. That’s a sign of a really strong market. The dips are very short lived. Seeing that in the stock market, seeing that in cryptocurrencies, namely bitcoin, and I believe we’re now seeing that in precious metals and miners as well, where a new looking for new areas to invest in. Small caps beginning to take off. Precious metals and miners, beginning to take off. Frankly, bitcoin just beginning to take off. Remember, as my mentor Ted Parsons used to say, rest in peace, Ted, bull markets don’t really even start to hit the all time highs.

[00:00:52]:
Well, we just got to all time highs in bitcoin. It just happened. And so now we’ve got the real bull market starting. Remember, bitcoin. In the last three of the last four times, bitcoin’s hit a new all time high in cycle moves. In 18 days, bitcoin has doubled. So will it happen here? Remains to be seen, although I’ll repeat, I believe that bitcoin is going to top 100,000 just before or just after the April having, which is coming up here pretty soon. Was that 42 days away now? So got that.

We’ve got again, another good day today we got continuation of strong internals again, this is textbook broadening action. Broadening action is really the hallmark of a true bull market that had been missing for a while as big cap mega cap tech stocks were leading away. Remember the madness in seven? They were the only ones making money. Supposedly. It was never true, but supposedly. Well, now a lot of those stocks are going down, but the market keeps going up. If you’re bearish, this is not a good setup for you. I’m just telling you this is not a good setup.

If you’re bullish, it could hardly be better. And we’re not even an extreme overbought. That’s what’s really fascinating here. I’ll cover that a bit as well. Today. What else today smis. My goodness, my goodness. Going parabolic.

[00:02:09]:
Truly parabolic now. SMH semiconductor etf up another 2.5% today. Just a house on fire. And again, when the semis lead, the market follows. That works in both directions since the birth of QE, it’s going to continue to work in our estimation. And the semis are telling us that both the economy and the market are both in good shape. That’s how powerful a discounting mechanism the semiconductors have become. All right, markets today again, good strong day across the board.

Dow Jones up 130 points, three tenths to 1%. SVF hundred up better than 1% today. All time highs, by the way, SVF 100. All time highs today in Nasdaq, which is up 1.5%. All time highs in Nasdaq 100 as well. All time highs in the semiconductors, right. Takes a breath away. This is what happens in the roaring 2020s.

Roast 2000 also up today, up eight tenths to 1%. Continue its strong move higher now five days in a row that the roast 2000 has been up strongly, or at least leading the way higher. And what else is happening with rates again? Everybody was out there saying, the next move, higher rates is coming. Look out. Bank failures are coming. Look out. Ten years down again today. Ten year yield now down below 4.1% to 4.9%.

[00:03:30]:
It’ll be below 4% before long. And it will keep going lower because of gravity. Because if you’re an international investor and you’re smart money, you’re global, you have the power of major money at your back, right? The true smart money. What are you investing in? You’re going to buy japanese government bonds with a 0% yield? Or are you going to buy ten year government debt, the safest paper in the world, with yield of better than 4%? You’re going to buy european junk at two and a half to 3%? Or again, US tenure yields at 4%. When we say gravity and supply demand, it’s not just a bitcoin story, it’s a government debt story as well. And I honestly find this comical. I find this comical, and here’s why. I’ve been hearing this exact same thing about our debt levels are astronomical.

It’s just a matter of time till we crash. I’ve heard this from the first day I became a stockbroker in 1985, when all the veterans, the guys that were my age then, that I am now, early 60s, when those guys who I thought were old as dirt, right, when those guys were going on and on and on about, hey, man, we don’t get control of our debt. Don’t forget about bull market. We won’t even have an economy to call home, right? It’s going to get ugly. That’s when our debt to GDP ratio was at 0.5%. Well, today we’re 1.23% debt to GDP and everyone’s now screaming again about it. You can buy the bull market if you want to. Good luck making money in stocks.

And the whole thing system comes crashing down again. I’ve heard it for forever. And the reminder is it’s all relative, is it not? It’s all relative. Most of it is just a number. Number one, we have a debt based economy. Number two, it means we need more of it. That’s the way the system works. It’s the way it’s designed.

[00:05:32]:
And third, again, it’s all relative. Both China and Japan have debt to gdps of double hours, double hours, other european countries as well. So no. Am I concerned about our debt? Not really. I don’t think that matters. After this long of hearing the perma bears say the same thing over and over again. There’ll come a time where maybe it matters, but that’s time’s a long way away. Look at the action in high yield bonds.

They’ve led government debt the entirety of the way. They’re telling you the yields are going lower, the debt’s not a problem. And no, we’re not going to have a banking system crisis. Steve Mnuchin, ex treasury secretary into Trump, stepped in today with the group and bought New York Community bank, or at least invested a lot of money into New York community bank. That’s private equity. That’s not a fed bailout. That’s private equity. Again, this is financial engineering.

This is massive levels of liquidity. As Tyler just reminded me. We just found out yesterday, money market funds totals hit another all time high, better than $6 trillion. Liquidity cash is everywhere. But it’s interesting, I think, that people are still choosing to plow money into bank accounts even though money markets still have good yields. When the stock market is doing what it’s doing, when cryptocurrencies are doing what they’re doing, namely bitcoin, doing what it’s doing. But people are still frightened enough to keep plowing money into government backed paper. In this case, money market funds, bank backed funds, FDIC insurance.

[00:07:10]:
This is not the kind of thing that happens at a market top. This is what happens at a market bottom. We are in a structural bull market of size and scope. They’re the most powerful kind. Structural bull markets are based in the reality of strong fundamentals, strong technicals, investor sentiment being overly bearish. Of course, we’ve had that. And analytics, all four of these right now, continue to flash built big buy signals just as they were at the Q four 2022 lows when we went aggressively. Long stocks market.

Again, we think it continues. We’re not an extreme bot. I’ll tell you something’s interesting here. One of the key metrics that we track are the percent of the SPF hundred above the 50 day and the 200 day. If you’re looking for one thing that really says, okay, yeah, we’re there. It’s really not the sentiment surveys. It’s this. I’ll tell you right now, the percent of the SPF hundred above the 50 day moving average is beginning to rise again.

It’s at 75.6%. But folks, we’re at 93% to start 2024. We’re 16% lower than we were in January. And the markets are up, not a multiple of that, but up significantly from early January. As far as a percent over 200 day moving average. This is getting a little higher. We are at 78.4%. We were at 81.6% start the year.

[00:08:38]:
So getting closer to that. But I’ll tell you, until both of these readings are in the 90% plus range, we’re not going to be flashing into big sell programs or sell signals. We’ll just continue to use dips to add to positions because that’s the kind of bull market this is. And this is the metric that I believe is going to wind up mattering the most. And it’s still not flashing overbought. Nowhere close, as a matter of fact. So we got a ways to go there. Also, again, talking about smart money.

Buy signals into phenomenal looking groups. Great setups here. The semis again up another 2.5% today. Absolute beast mode now up 178% from the bear market. Lows again. They lead in both directions. We’re going to continue to be long and strong. The semis, as long as they’re leading along with the market getting really good buy signals now on precious metals and miners, we’ve been pounding the table in this group.

We haven’t been wrong to do so. The miners have been horrible, of course, but gold’s all time high. Silver has been lagging again. When gold hits all time highs, that’s when the really big moves start began. If this move higher, this new bull market in gold, if it does what the last three have done on breakouts, all time highs going back to the 70s, you’re looking at a move higher of more than 700%. Talking about gold going from here to more than $7,000 an ounce. From the cycle low to where it would wind up to again, 7300, I believe is the point there. What’s the last quote here? Last quote on gold is right now 21 66, just off all time highs today, up $8 an ounce.

[00:10:22]:
So a lot of strength still showing up there. Charts look great. Gold is trading at 30 year low valuations. The miners are trading at 30 year low valuations to gold. I’ve seen some states that show 50 year low valuations to gold. And bitcoin. Bitcoin is smaller than Microsoft, Apple, Nvidia, Amazon and meta. The companies all worth more than $1.5 trillion kept.

Why does that matter? We’re talking about companies versus bitcoin. Here’s why it matters. Bitcoin should be a multiple larger than these largest companies. Because bitcoin is not just a company, it’s its own asset class. It’s a global de facto currency traced 24/7 everybody’s piling into it. The big guys yet have yet to do that again because they haven’t approved it. JPMorgan, Goldman Sachs, Wells Fargo, bank of America, AG Edwards, Charles Schwab. I can keep going.

These companies are still not forget having their own ETF, right? Oh, sorry, I forgot the big boy, didn’t I? Oh, my God, I got a brain freeze here. The second largest fund to Blackrock. It will come to me. Goodness gracious. That’s embarrassing. The $7 trillion fund they’re not in bitcoin, not allowing purchases, don’t have an ETF. It’s an embarrassment. It’s an absolute embarrassment to them.

[00:11:47]:
And they’re all going to change course. And again, that’s future demand coming in, making what was already the best supply demand story of my lifetime. Scarcity value off the chart is going to get even tighter as these bitcoin purchases start to really pile up. And then it’s only mining 900 bitcoin a day. That’s all they can. Mine purchases are coming in at 10,000 plus bitcoin a day. At some point it’s going to go bonkers. Absolutely parabolic.

And then after the having that takes place now, what, 42 days from now, mid April, when the having takes place, they’ll be mining instead of 900 bitcoin a day, 450 bitcoin a day. So you can see where this is going. That’s why we keep saying buy the dip. We just had a dip this week. Bitcoin fell from in one day, matter of fact, in just a few hours, from all time high at 69,200 to 59,800. It happened like that, right? And again, because we’re always involved. But, folks, when you see it next time, just remember, buy that dip. It’s working for stocks.

It’s working for cryptos. We believe it will continue to work for cryptos. All right, let’s look at the hood today. Again, we’ve had a string of good internals, folks. They only continue to get better. Here we go. Start with advanced decline. Better than two to one positive.

[00:13:12]:
Nyse. Again, very good readings. Two to one positive for Nasdaq volume. Upside. Volume day in NYSE of 66%. Nasdaq right behind it at 65%. And then check this out. New 52 week highest to lows.

We had 626 stocks. Hit a new 52 week high today to just 110, hitting a new 52 week low. My guess is in the very near future, kind of thought it might happen this week, but in the very near future, we had this big shakeout. Of course, in the very near future, we’re going to have more than 1000 stocks a day hitting a new 52 week high. That will be when the move higher really starts to pick up steam. We’re not quite there yet. It may feel like it, but we’re not. It’s going to be a monster year again and again.

There’s the smart, smart money place will continue to be as it has been, which is by the dip. So you always keep some money aside. Or if you’ve got a sector you own or a position in equity and a stock you own, that’s not doing what you want it to do. You just get tired of looking at it. It breaks down. Or you just think, I can make more money, sell that off and use that to add to gold, silver, bitcoin miners, your favorite positions that you like, but always had some liquidity set aside to use that to buy these pullbacks. Because again, that’s the play right now. And our sector watch.

[00:14:33]:
Good day here as well. Nine of eleven sectors finish higher on the day. Led the upside, of course, by technology of 1.9%. Communication services of 1.8% strong. Across the board, these really weren’t even lower. Real estate and financials down a fraction of one 10th of 1%. So essentially all eleven sectors were frankly higher on the day. Flat to higher on the day.

Very good day. And it continues to build, especially with these mega cap stocks going the other way. Tesla going the other way. By the way, we are adding to positions every month there. Love Tesla at these prices. Loved it for a long time. We’ll keep loving it. It’s going to have a phenomenal next twelve to 24 months.

Apple still well below the 200 day moving average. Not been doing well. Google, you start to see stocks really start to lose their footing. The generals now in the past, that’s been a sell signal. I would say that that was a concern of mine, except for the one fact, the ultimate generals are semiconductors, and they continue to hit all time high essentially every day now. Right again, all time highs today, SPF 100, semis, Nasdaq 100 and Nasdaq. This is when moves accelerate, not when they market peaks don’t happen at all time highs. That’s a process.

[00:15:53]:
Market peaks should be used to keep buying, keep buying, add to positions. We’re going a lot higher. And a commodity watch today. Again, very good bull market looking here. I think it’s a bull market of bull markets. Pressure melts. And miners, and the miners did okay today. They have been leading now for the last, really? The miners have been leading since last October when you look at the relative strength chart.

But now they’re starting to put in a number of days, five days in a row now where they’ve led. Good to see that gold today again, up $8 an ounce, 21 66. Stover up a quarter of a percent at 24 55. At copper today, up $0.05, announced at 392 a pound. Looking very good for Dr. Copper. A great indicator of the global economy, of course, global stock markets hitting all time high. For all time high.

Japan, Germany, I mean, India again. We got a lot of strength globally as well. It’s a global boom time, folks. Crude oil, it’s flat on the day at 79. Six and again, bitcoin. Last trade here is 67,368. What does that put it? Less than $2,000 away from all time high. All right, folks, that’s it for the day.

[00:17:04]:
Hey, always appreciate you listening. Hope you had great dating, a better night. We’ll see back here again tomorrow after the close.

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Time Stamps

00:00 Market showing broadening action, bad setup for bears.
03:30 Global investors seek higher-yielding government debt.
06:32 Massive liquidity levels, money market funds grow.
09:35 Gold prices rise, predicting significant potential gains.
13:55 Keep money aside for strategic investments.
16:13 Gold and copper prices rise, stocks hit records.

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