In today's episode, Tyler breaks down the market action following today's FOMC meeting. Highlighting the impact of J Powell's statements, Tyler covers key market indicators, sector performances, and notable company earnings. Check out today's VRA Investing Podcast to see what the VRA Investing System is telling us from today's action.

Don’t look back because the market is closed. Good Wednesday afternoon, everyone. Tyler Herriage here with you for today’s VRA investing podcast. Hope you all had a great day out there today. It was certainly an eventful day today. A good day for our markets today. We had the fomc meeting today. Had some earnings after the close as well, and all around eventful day.

So let’s jump right into it here. Good to see a strong day from our markets on a day where Jay Powell, the money printing rockstar himself, is speaking. We talk about this here often on our podcast that Jay Powell does have one of the worst track records of getting in front of the microphone and sending the market lower, the worst of any Fed chair in modern Federal Reserve history for J. Powell there. So good to see the market finishing higher on a day where he is speaking. And if it seems like it’s been a little while since we’ve seen him in front of the microphone, since we’ve had an fomc meeting, well, you’d be right. This was only the second fomc meeting for 2024. February.

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We got the month off from having to listen to the Fed. And the good news here is we’ll get the month of April off as well. Of course, after every fomc meeting, they’ll roll out the Fed speakers until we get into the Fed blackout period. Similar to an earnings buyback blackout. The Fed can’t talk about what they’re going to be doing about I believe it’s two weeks before the following meeting. So the next one here that we have to listen to will be on May 1. But again, JPow did not disappoint today. Once the Fed minutes came out, they come out at 02:00 p.m..

Eastern. He goes on to speak at 230 Eastern. Once the minutes were rolled out at 02:00 p.m. It was off to the races. Once everyone saw there were no big surprises here from the Fed, including a few little nuggets of bullish aspects in the minutes as well. I’ll get to those here in a second. But once those came out, everything was higher from there. The S and P jumped above 5200, hitting an all time high.

We had the dow hitting an all time high. Gold rallying, the miners rallying, semis rallying. Everything started going up after the minutes were released because I guess the headline really was an unexpected improvement in the Fed forecast for GDP in 2024. This was a big one, which was revised up to 2.1% GDP growth forecast from the Fed for 2024. Previously, they had forecast 1.4% GDP growth in their December meeting. So big revision upward there, slight upward revision in PCE inflation forecasts, but nothing that the market obviously couldn’t handle there. But the median forecast for rate cuts remains about the same here for 75 basis points worth of cuts this year. So if it’s 25 basis point cuts, that means three rate cuts this year.

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It’s about what we’ve been saying here. I’ve been on the low end of that, leaning that direction kiss, maybe been a little bit higher, but roughly in the same ballpark here. And we saw the CME’s Fed watch tool saw an increase of market expectations for a June rate cut here again as well. So all eyes really will be on the June meeting. Of course, we’re going to watch the May meeting as well, to see if they hint that, hey, maybe the next meeting will be the time when we cut. That’s what the Fed’s dot plot says right now. Most expecting the first cut to be here in June. But as far as expectations for the year go, these were revised downward as well.

For yields for the federal funds. Rate by year end remain the same for 2024, 4.6 by year end. Right now, they’re at five and a quarter to five and a half. So ending the year at about a 4.6, then a 3.9 for 2025 and a 3.1 for 2026. So both of those revised slightly lower. And just what you want to see, a slow and controlled move lower in rates, barring any black swan event, which, of course, is always, like we saw most recently with coronavirus insanity, there were no intentions to cut rates until that happened. Then it was cut them to zero really quick. I mean, remember when we think about what we just witnessed here, it’s been a pretty radical last few years from a money printing perspective, right? We grew our money supply by 40% in two years.

We saw the Fed cut rates to essentially zero, right, zero to 25 basis points, and then in the following years, raise them all the way back up to over 5%. These are massive moves from the Fed here. So we’ve had all this often. We had a record level of bear markets in a short period of time here we’re due for some stability, if we could be so bold as to ask for it, I guess. But we like this plan. I think it looks slow and steady. Remember, we don’t want the Fed to have to cut rates sooner than they need to, right? That means that something has broken and they’re rushing to fix a problem. A slow and controlled just cuts here, cuts there to kind of moderate for the business cycle and good to go.

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That’s what we would like to see. The less the Fed is involved, the better it is for our markets. So again, after the minutes release, market rallied there. And then I’ll point out yields also did rally. I said everything went up. I meant everything. Yields hit a high of the session of 4.32%. But once Jay Powell got in front of the microphone at 230 Eastern, he seemed to talk the market even higher.

It was at record highs, kept heading higher from there, and somehow talked yields lower again, rare for Jay Powell, but good to see yields finished closer to their lows of the day, down half a percent to a 4.27. So not bad at all. But once again, other than some of those expectations that were being revised, no big surprises today, but I do have a couple of those bullish points that we saw from Jay Powell that I’ll cover more here throughout the podcast, but we’ll get to those at the right time here. First, let’s take a look at our market action on the day to day because we had really good action today. And there’s one factor I really want to point out here before I dive into the numbers, and that is that none of our major indexes are at extreme overbought levels right now. That’s despite the fact that Dow Jones just hit an all time high. The S p just hit an all time high, Nasdaq all time closing high just shy of its all time intraday high. I mean, we’ve got all of our major indexes hitting blue sky territory, meaning that there’s no resistance levels above this because everyone’s got a profit when you’re at all time highs.

And the fact that we’re nowhere near overbought levels. The Nasdaq is not near overbought at all. It’s closer to oversold, and that’s especially true for our short term momentum oscillator. So we’re nowhere near it on that. The S P is closer to overbought, but only on our short term VRA momentum oscillator. So again, this tells us we could have a lot of room to run here. I mean, if you’re telling me that we’re at all time highs and not at overbought levels, you love to see that. You really do.

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Going forward here, nothing has changed. We’ve talked about it here often. We remain long and strong and believe that buying the dip will continue to be the smart money move from here. Nothing has changed in that regard, especially for our favorite sectors and our major indexes as well. And then one more note here for our markets that really, on top of not being at overbought levels and just hitting all time highs, and a slightly more accommodative fed here, that we’re still in the heart of the most bullish time frame of the year. April is typically a very good month for the markets before we get to sell in May and go away, although that hadn’t always rung true, especially in recent years. We’ll see what we get this year, but it also means right now that we’re beginning to wrap up Q 1. March will be the last month for Q One, so you’ll expect to see we always get end of the month fund flows, but we also get extra end of the quarter fund flows as well.

So that’s another bullish factor that we have coming up for our market. And a new quarter of earnings, which we expect to be another good quarter of earnings for Q 120 24. And speaking of that, right on queue here. Micron’s got a little bit stranger of a schedule than most companies. They just reported earnings today, and if it’s anything of what we can hope to expect from Q one, earnings of 2024, they absolutely crushed. So we want to see that continue. They beat on both earnings per share estimates and revenue estimates. Really, they did crush on both of those numbers.

The stock was up as much as 11% in after hours trading. Wow. Just hit refresh, up 14 and a half percent. Now let’s take a look at what the semis are doing really fast. Semis had a good day today. Up 1.6% on the day, up another 1.38% in after hours trading as well. We just alerted our parabolic members yesterday to the semis, flashing a buy signal. We have a buy rating on the three time leverage ETF for the semis in our VRA portfolio as well.

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We took action on that parabolic options trade just before the close today, and this is again a group that we remain long and strong on here. Semis did not get back to an all time high today. What’s interesting about this group and why to dive in, not too deep, but I’ll give you a little preview of the VRA investing system here, is that we just hit an all time high in the semis. Twelve days ago, it was March eigth. We pulled back roughly 11% since that time, and we still have 7% to go from now to get back to those all time highs. And when you look at a chart of SMH, you’ll see that every time, especially since the November lows, every time that we’ve gotten back to the 21 day moving average, that has served as support here. So that’s one of the factors we’re keying off here. Another, of course, that we’re nowhere near overbought levels.

And you’d love to see tech leading the market and semis leading tech. Well, we got that today. So let’s take a look at our major indexes here. We were actually led by the small caps. Good to see. That’s another group we remain very bullish on. Russell 2000 up 1.92% on the day to 2074. Then we had tech Nasdaq up 1.25%.

Tyler Herriage [00:11:29]:
Again, this will be an all time closing high at 16,369, just shy of the all time intraday high. But that means that the semis led tech Nasdaq up 1.25, SMH up 1.6. Just what you want to see there. Next up here, the S and P 500 up zero point, 89% on the day to an all time high of 5224. And lastly here, the Dow Jones up over 1% on the day today. Sorry, I kind of went out of order there. But the Dow Jones also all time high at 39,512. Give me some water here.

All right. So on top of that as well, what’s really good to see is not just us markets acting well. We’re seeing this market continue to broaden and we’re seeing it in international markets as well. The DAX ETF, which tracks the German stock market. The DAX just hit an all time high today as well. The DAX just right in range of an all time high. Japan right in the range of all time high as well. So you’d love to see a global bull market taking place here.

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Again, more bullish signs. Next up, taking a look at our internals on the day today. Very strong readings here even this morning before the Fed minutes came out and the market turned, our major indexes were mixed negative, maybe just barely fractionally positive on the day. But at midday, the internals were positive across the board. This is 2 hours, hour and a half before fed minutes even came out. But the internals were telling us to expect some good afternoon of trading. Advancing stocks coming in very strong today. Over declining.

Coming in over three and a half to one positive on the NYSE, just barely shy of three to one positive on the Nasdaq. 52 week highs and lows showing improvement here as well. Coming in over nine to one positive on the NYSE 292 stocks hitting 52 week highs and just over two to one positive. Roughly two and a half to one positive on the Nasdaq today. Then lastly here, volume, the bright spot of the day here. Just, wow, big upside volume on the NYSE with 82% upside volume. Nasdaq coming in with 80% upside volume today. If you get another day of that there, I’d have to refer to Walter Deemer on this one, but a lot of technicians refer to back to back volume days of 80% plus as a bullish thrust there.

I’ll check what he’s been writing lately and get back to you on that one. Next up here, looking at our sectors on the day to day. We finished with nine out of our eleven s and P 500 sectors higher on the day to day. And a lot of new highs here as well. We were led today, excuse me, led today by consumer discretionary, just shy of a 52 week high. After that, communication services, 52 week high. Financials, all time high. Industrials, all time high.

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Materials, all time high. Consumer staples, 52 week high. Really good day. Tech is just shy of a 52 week high, an all time high here. And again, same thing with consumer discretionary as well. So really good to see there. Today our laggards were healthcare and energy. One more I do want to point out here before I move on, though, real estate sector was positive on the day today.

If you’ve tuned in with us here regularly, we follow not the real estate sector, it’s mostly made up of REITs. We follow the housing index and the home builders. So here, the home builders XHB is the ETF all time high today. Housing index all time high as well. So when semis are leading and housing are leading, you really want to be long that market. That’s been our view here for some time. Finally here for today, our VRA commodity watch. Let me get a refresh of my screens here, which also again, the everything rally today.

Gold shot up after the minutes as well. Gold now up 1.38% on the day to $2,189 an ounce. Silver up two and a half percent on the day to $25.77 an ounce. Give me a quick refresh of this screen here. That’s its highest level now for 2024. For silver, that’d be its highest level going back to December there. So good to see from silver Dr. Copper continuing to hang out above $4 a pound here.

[00:16:16]:
Also trying to stay around its highest levels of the last year now up four tenths of 1% to $4.09 an ounce or sorry a pound. And lastly here, oil pausing above $80 a barrel. Here up one and a half percent, or sorry down one and a half percent to 81 dollarsforty four cents a barrel. And finally here for today, bitcoin. Interestingly, I said I had another bullish little factor here from J. Powell. Here it is. Maybe an indirect or subtle buy signal here from Jay Powell.

Again, this was subtle. I haven’t seen a whole lot of people reporting on this yet. I’m sure there’ll be plenty of people who do. But if you’re watching the presser, you caught it. He got a question about CBDCs, which is central bank digital currencies. Again, if you’ve been a listener here for some time, not fans of those at all here, we could do a whole podcast just talking about why we don’t want central bank digital currencies. But I won’t dive too deep into here today. Essentially, it boils down to being able to track every transaction that ever takes place.

They want to get rid of cash, want to get rid of any other form of currency other than what they can track. That’s kind of what it comes down to there he was asked, are you all still considering a CBDC? Do you have any updates on your progress there? And essentially he said, we don’t have any plans to launch a CBDC that takes congressional approval to happen. So yes, we might have somebody on the staff who’s staying up to date on it, but we don’t have some backroom coders working on a version of it so that when Congress approves it, it’s ready to rock like that day. That’s what he said they didn’t have. Right. I’d be much more concerned if he said, oh yeah, it’s something we’re still working on. We’ve got a team of people on it. So when Congress approves it, we will give it the green light.

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That’s the opposite of what he said. That’s huge news there. Again, for somebody who does not like the idea of CBDCs, that’s great news. And hopefully Congress will never approve that. But of course that answer makes sense. But it was nice to hear that they aren’t really working on know, sounds like they’ll consider it more if the time comes, which hopefully it doesn’t. But I’ll consider that a bullish factor here from bitcoin or for bitcoin, that the Fed does not have a plan to create a competing type of digital currency. At least not at this point.

And then there was one other bullish tell for bitcoin today, not from the Fed, but it is that the grayscale bitcoin trust is being liquidated. I believe that’s GBTC, because it’s not an ETF. It was a product. It was pre bitcoin ETF approval. It was a way to kind of get exposure to bitcoin around the ETF approval deal. I guess they decided it was no longer worth it. It had high fees on it. I think that’s one of the reasons they knew it wouldn’t compete with these ETFs, had high service fees.

But point here being is that they’re liquidating it, and they had roughly 600,000 bitcoin in their holdings before they began liquidation. That number has been roughly cut in half, just 330,000 bitcoin today. And still for the last two months, they’ve been liquidating. What has the price of bitcoin done? It has done nothing but go higher. That’s big selling volume in that it hadn’t really impacted the stock or the stock really hadn’t impacted bitcoin at all. We look at that as another bullish tell. We have big sellers in the market, and it still doesn’t send the price lower. And on that note, bitcoin was struggling earlier in the session.

[00:20:04]:
Today, along with the rest of our market, began to rally this afternoon, although a little later than the rest of our market. It was still down earlier in the session after our major indexes were hitting all time highs. Now, at its highs of the day, though at 5.34%, higher at 67,378. One other point here, if you’re still listening, our major indexes also finish at their highs of the day today. Exactly what you want to see now. Bitcoin at the highs of the day as well. But folks, that’s all that we have time for here today. Please be sure to subscribe to receive our VRA podcasts every day at the market close.

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