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VRA Investing Podcast: Insights on Semiconductor Stocks, The Nasdaq, The Jobs Report, Gold Market Trends, and Bitcoin.

In today's episode of the VRA Investing Podcast, Kip provides a comprehensive breakdown of the day's market activities, offering valuable insights on semiconductor stocks, the Nasdaq, the jobs report, gold market trends, and the l ...

Posted On March 08, 2024Episode 1339
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About This Episode

In today's episode of the VRA Investing Podcast, Kip provides a comprehensive breakdown of the day's market activities, offering valuable insights on semiconductor stocks, the Nasdaq, the jobs report, gold market trends, and the latest developments in the world of bitcoin. With a bullish outlook, Kip shares his observations on smart money indicators and the potential for rate cuts, offering valuable insights for investors.

Transcript

Don’t look back because the market is closed. Good Friday afternoon, everyone. Kip Herridge here with the Daily View investing podcast. Hope you had a good day today and a fantastic week as well. Tyler’s out for a few days, so you’ve got me on back to back days and probably Monday as well, and hope you can put up with that. Tyler does a much better job of these podcasts than I do. His is chock full of really good, usable, factual data, and mine’s just a little bit of what happened today and what I’m seeing from my point of view. So hopefully you find that a good mix.

I know I learned a lot from Tyler’s podcast. In just six, seven years of working together, I can tell you he’s picked up a lot really fast. And he’s a true financial engineer. He understands engineering. He’s always had that kind of mind, and now he’s just figuring how that works in Wall street. And anyway, I think his podcast reflect that. I hope you enjoy them. And again, thank you for listening, folks.

[00:00:57]:
Always appreciate it. Interesting week this week. A little bit topsy turvy, but boy, the internals. The internals continue to flash massively big buy signals. Talk about that. Talk about another bitcoin shakeout that we had had earlier in the week at the first hit of all time highs. Happened again today. All time highs.

And then a shakeout. Tell you what that means. Got the jobs report this morning. Very friendly for rates. Makes the Fed’s job a lot easier. And of course, also going to talk about what’s happening in the gold market as well as this new bull market is just really getting started here at all time highs finally happening this week for gold as well. First of all, let’s cover the markets. We’ve essentially closed at the lows of the day.

It looks like to me across the board, not what you want to see on a Friday. The semis led the way lower. Also not what you want to see. Nvidia had a big outside reversal day today. We’ll see if that means anything with the way this stock trades. It may not mean anything at all, but it’s something to keep an eye on. Nvidia today, trading down right now, down 5.6% today. And of course, it’s been a king shit, if you will, for the chip makers semiconductor index SMH today finishing down 3.7%.

[00:02:11]:
Our leader to the downside, again, not what you want to see, but this is one day, and they’ve been going parabolic. So frankly, a little bit of a pause, a little bit of shakeout really shouldn’t surprise anyone. They’re going to keep leading this bull market, we believe, for a very long time to come. Nasdaq today was our big loser on the day as far as broad market indexes finishing down just under 1.2% on the day. Again, not what you want to see. Semis and tech leading away lower. Dow Jones only down 68 points of the day. That’s less than two tenths 1%.

SPF hundred down six tenths 1%. And our market leader, as far as the broad markets are concerned, broad market indexes are concerned. Small caps, guess what, they led again today, only down one 10th to 1%. So they were the best of the losers. I think that makes it does five out of six days that small caps have led. And remember, as we’ve been sharing with you here, small cap, it surprises a lot of people. Small caps have actually led the sp of 100 higher from the October lows, which is when this melt up started. I think that surprised a lot of people.

But that told us, and it’s been telling us this market is broadening. It’s been broadening. All those folks have said it’s just a handful of stocks going up. They’ve been wrong for a long time. But it goes to the mainstream media doesn’t really want to report that. They just like to talk about what a thin market it’s been. It is not. This market is really broadening out.

[00:03:34]:
In a minute, when we cover the internals, you’ll see again exactly what I’m talking about. Let’s see jobs report this morning, also got that again, good jobs report this morning, 275,000 jobs. Creative assessment of 200,000. That only sounds like a hot number on the surface. When I first saw the number, I thought, okay, well, here goes. Bond yields are going to spike higher. Here goes a sharp move lower in the markets. We wound up getting at the end of the day actually, but not at the open.

Futures were down this morning about 100 points. Then we had a big reversal, higher intraday and Dow Jones at one point was up well over 200 points and again finishing down today. But jobs report was solid. But it does show some weakness. The unemployment rate rose from 3.7%, the estimates to 3.9% this month, month of February. Wages did continue to grow at 4.3%, a little bit lower than what the economists thought. But again, we’re not going to quibble here. This is a fantastic sign that wage growth and productivity remains healthy, above trend extraordinarily bullish for the US economy, but it does make the Fed its job easier.

There is underlying weakness that we’re starting to see now in some of our indicators that tell us the Fed, that we believe Tyler’s covered this much more than, much better than I have. But we’ve been telling you for the last six months we thought the Fed was making a mistake and that they’re hiking. The last two rate hikes were not necessary. Now, it certainly hasn’t appeared that way, has it, because the economy has been so strong. But if you notice what’s happening to the ten year yield, ten year yield now is down below a 4.1% it was just a couple of weeks ago is over 4.3%. Even as we’ve continued to have really strong economic data. The move in interest rates, the move is taking place in gold, the move that’s been taking place in semis and tech, and the move that’s been taking place in utilities. Higher.

[00:05:29]:
All confirm as bond market derivatives. Okay, interest rate derivatives, all of those confirm that the Fed is going to cut rates likely at the June meeting and that rates are going to go lower. We stick by our forecast that there’ll be two to three rate cuts this year and I think that’s probably going to be spot on. I think probably three rate cuts this year. But again, good jobs report, not red hot, showing a little weakness and we’re fine with that. At some point you would think these higher rates would start to kick in and hurt. So far that just has not been the case. Let’s see here.

I don’t want to skip around too much without getting to the meat of the matter, but again, the smart money indicators I want to cover one more time. These are smart money indicators. As to the actual direction of interest rates, again, the ten year, because the Fed never leads, they always follow. They will be following the ten year lower. That’s why they’re going to be cutting. Inflation is essentially done. We have disinflation. Again, it’s a little confusing terminology for folks that don’t understand aren’t in the world of economics, but essentially it means inflation is lower than it was at this point last year.

We think that’s going to continue to be the case. Small caps have been rallying. Utility stocks have been rallying, gold’s been rallying, bitcoin’s been rallying. Semis intech have been rallying. These are all again smart money indicators that tell us the direction of rates which will be lower. Also, I wrote this up this morning, because it just is. You have to see the chart. Everyone knows what Nvidia has done, but we’ve really been paying attention to what we think is the most important relative strength chart that there is.

[00:07:07]:
And this is semiconductors to the S and P 500. We shared again with our folks this morning. If you’re not a member with us here, come and join us. If you’re a letter again, vrainsatter.com again, vrainsatter.com get two free weeks. The semiconductors from the lows of October 13, 2022, the bear market lows. The semis from that day have been leading the market higher. And now this relative strength ratio is just going parabolic. So again, would not surprise to see a shakeout.

Also would be very surprised to see it last more than just a short period of time. As we’ve said for a long time, buy the dip remains the smartest of Smartman strategies. Just crazy. We bought Soxol the day after the capitulation lows of October 13, 2022. We bought Soxol, the three time leverage semi ETF. It was just over $6 a share. Then it closed today at $48 a share. Had hit a high of just over 56 at the open this morning.

Anyway, bottom line is from this October 13, 2022 lows, Zoxel is up 760%. Yes, Nvidia is in there as, of course, about the 15 other chipmakers as well. But again, there is no better broad market tell than the semis. They lead the market in both directions. It is that simple. Don’t let anybody tell you anything different. It is just that simple. So yeah, the fact that semis are down almost 4% today, the fact that Nasdaq was down better than 1%, that is a little bit of a yellow light.

[00:08:47]:
But as we cover here to move forward, I think it’ll be pretty clear. That’s all that it really is. I want to cover bitcoin in a minute. Gold as well. All right, let’s get to these key points. Let’s talk about the internals here, because again, folks, as I cover these internals and they’re so important, remember, they are the foundational strength of the market. They’re also telling you what price action should likely do going forward. With weak internals, it’s very hard to have confidence in the market.

Strong internals, exactly the opposite. Listen to these numbers and remember, SPF hundred today was down 34 points. All right, Dow again, not massive decline, still seven tenths of 1%. Nasdaq today down a bigger 1.2% on the day. Right. Keep that in mind because here are the internals. Nasdaq advanced decline was only negative by, what is this, 20 stocks? That’s it. That’s a big win.

NYSE Advanced decline was positive by 300 issues. All right. You would expect to see negatives across the board today, or at least something close to that. We had positive across the board today. This is a garlic strong market, folks. Volume today even again with Nasdaq’s decent sized losses better than 1%. Nasdaq volume today was positive by $500 million worth of trading. That’s not nothing.

[00:10:18]:
And fiance decline volume for NYSE was negative, but again, by only, by $100 million worth of trading. It’s chump change. These were very good readings today. Also in our new 52 week highs to lows we had. And this is the biggie. 638 stocks hit a new 52 week high to just 97, hitting a new 52 week low. With the action we saw today in the market, especially the semis, down almost 4%. Folks, this is a big tell.

This is a big tell. Very healthy market action today. We’ll see what happens over the weekend. Kind of hope we get on Monday. But there are some things that we’re looking at here and adding to. And again, come and join us. We’ll tell you what that is. In our sector wise today we had, what is this? Seven sectors finished higher.

[00:11:11]:
Five finished lower. Led to the downside by technology, down 1.8%. Consumer staples and eight tenths 1%. Materials down half percent to the upside. Real estate up 1.1%. Again, lower rates help. Utilities, also a benefactor of lower rates, up two tenths 1%. As the largest borrowers of money in the country, energy stocks today, we love this group, have been pounding the table here.

It’s been moving a little sideways, starting to get a little bit of juice now. Energy stocks today down up four tenths 1%. Very quiet day, frankly, all the way around in our commodity watch. And this is where it starts to get very interesting. Again, telegraphing lower rates. Okay, gold is telegraphing lower rates. Gold today up another $19 ounce. A new closing all time high of 21 84.

Hit a high today of 22 two over 2200 today in closing at 21 84. Gold is so undervalued. The technicals are fantastic, folks. Massively like five year cup and handle formation. Very bullish technical formation, high probability, big breakout is targeting just on that one technical indicator alone. Again, a cup and handle formation. Targeting a move to roughly 2500 for gold this year or targeting on the move. Our target remains minimum target $2,400 an ounce.

[00:12:41]:
By the end of the year, I think we’ll surpass that. Gold is ready to go just when no one’s talking about it. Just when the open interest is at record lows. Just when everybody’s talking about bitcoin, selling gold to buy bitcoin. But guess what’s happening in the background. Countries buying record amounts of gold again this year. Global countries also central banks buying a record amount of gold this year. Back to back years, it’ll be so you’re looking at the smartest smart money.

They’re buying gold here. That’s what we believe should be happening as well. And we really like the miners. They had a pretty good week this week. Didn’t do much today. Kind of disappointing, frankly, with gold the way it was. But the markets were down and after all, the miners are equity, so they do tend to move with the markets. Can be a little frustrating.

We look at this buying opportunity. Silver today down seven cents an ounce at twenty four fifty. That’s down a quarter of a percent. Copper today down three pennies at three eightyn a pound. Crude oil again down a dollar. Just over a dollar. Bureau today at 77 80. So we talked about gold and the reason to own it and the miners reason to own it again.

[00:13:53]:
The miners GVX is the minor ETF. The miners are trading at minimum 30 year low valuations to the price of gold. The earnings are rocking and rolling again. Higher gold prices certainly help and they’ve really cleaned up their balance sheet. So these miners are a great story. At some point we think they’re going to go ballistic to the upside. I think that started now. I think this is the bull market of bull markets for this group.

You can see a lot of bull markets happening out there. It is turning into the everything bull market, which means you got to pick and choose only the hottest areas. We don’t have enough money to buy everything, right. Got to pick and choose the hottest areas to be in. That’s what we try to do with our sector analysis. And then individual stocks that we use and leverage etfs to get maximum returns on these moves. Use that as more of a listed trading vehicle. We’re not really day traders.

We’re not really even considered active traders. We have our parabolic options program, which is a bit more active. But we are position builders and we like to buy into sectors and stocks just before they’re going to have major moves higher. We like to hold them as long as possible and then only then take our gains just when they’re about to reverse lower. And so that’s our position here. And we love the groups we’re attacked, semis, precious metals, miners, energy, small caps. This is how we’re positioned. We feel very good about it.

[00:15:23]:
Bitcoin again this week is deja vu, isn’t it? This week, bitcoin right now, by the way, is trading at hit an all time high again today, folks, as you probably know by now. Just last trade though, just under 69,000 of bitcoin. It traded as high today as broke 70,000. Remember earlier this week after it hit all time high, it shook out down to, what was it? Below 60. We got below that again today. No, I’m sorry, the low was 66,000. When we had the shakeout early in the week after we hit all time high, we had a 14.4%. Just the bottom fell out, right.

And it’s kind of to be expected. You finally hit all time highs and here comes some sellers and there’s no buyers left because they’ve all used up all their energy in helping get it to all time highs and the excitement of that. And so then the bottom falls out and that’s a buying opportunity. These shakeouts folks are buying big buying opportunities in bitcoin, we believe had it again today. Hit an all time high of, again, 70,000. And then boom, here came the sell off. Hit a low of 66,000. That reversed immediately.

And again, we were right back. Over 69,000 in the last hour. So we think that pattern is going to continue, folks. It’s just the demand. Again, we’re broken record. There is no better supply demand story in the planet. The SEC approval of the ETF was a game changer. It changed everything.

[00:16:47]:
And now everyone’s looking forward to the having and the fact that it’s hit all time high. Two pieces of data for you. In three of the last four times, bitcoin’s hit all time high cycle highs. The average move time it’s taken to double your money from that breakout has been 18 days. So if history is a guide, the move in bitcoin is about to accelerate higher. Also, we know that with the having approaching now, I think it’s 40 days away. So we’re looking at mid April. In the last three havings, there’s only been three.

This is the fourth. The one year later, bitcoin is up 79. You made 79 times your money. 7900%. After the having in 2012 and the having in 2016 again take place every four years. And the having in 2016, bitcoin went up 2900%. You made 29 times your money in 18 months. And at the last having in 2020, over 18 month period, bitcoin went up 700%.

You made seven times your money. So again, there are a lot of catalysts here, a lot of reasons to be bullish. And that’s why we say, keep buying the dip. I’ll repeat, I believe that prior to just either right before or just after the having, bitcoin will break 100,000. That’s not a new prediction, that’s an old prediction. But we had to place something after we hit our initial target of 50,000. And so again, the scarcity value here and the demand that’s coming in. What’s amazing about the demand coming in, the average buying over, they’re only mining 900 bitcoin a day, and they’re buying ten.

[00:18:25]:
Buying over 10,000 bitcoin a day. It’s a little crazy. But what’s really interesting about this, in my opinion, is that there are so many firms that aren’t yet participating. We talked about this a lot this week, haven’t we? Blackrock is the. I forgot their names yesterday, and I’ve forgotten their names again today. What is going on with my brain? I see an n and I don’t see the rest of their name. This is driving me crazy. Driving me absolutely crazy.

Now it’s a middle block, right? Okay. The second largest asset manager in the world manages $7 trillion, and it’s just my company. My God. All of you out there are saying, kip, it’s this, it’s this. Wow. Anyway, they have yet to allow the purchase of bitcoin, these etfs. Also JP Morgan, Goldman Sachs. See if you can remember a few of these.

JP Morgan, Goldman Sachs. Charles Schwab, a T. Edwards, Wells Fargo bank of America. Although the latter two did start allowing bitcoin ETF purchases this week. But again, it’s a process. So all of these brokers that work there, financial advisors, right. All the employees that work there have their accounts there, because that’s a requirement. Right.

[00:19:41]:
They don’t want you trading away from the firm to combat insider trading. So all these tens of thousands, hundreds of thousands of employees can’t buy bitcoin. They can’t buy it for their clients, can’t buy it for the firm, can’t buy it for themselves. This is interesting, folks, because it’s all coming. Every one of those firms is going to wind up approving this ability to buy bitcoin etfs. And so the demand is just going to continue to soar. And if you’ve seen the videos I’ve seen, very interesting meetings are taking place in the Middle east about they bitcoin doesn’t pay interest. And that is one of the requirements.

Know, I don’t know if that’s a surreal all thing, but in the Middle east, they’re not allowed to invest in anything that pays interest. Guess what? Bitcoin doesn’t pay interest. It’s a perfect investment for Middle Easterners that abide by that religious tenet that you can’t invest in something that pays interest. The floodgates are opening, folks. I know it’s had a big move, but it really hasn’t. Remember, we’ve just now hit all time highs. I’ll wrap with what my mentor, Ted Parsons. Rest in peace, Ted.

My first mentor, Ted Parsons underwood Newhouse told me a long time ago, 38, 37 years ago, would tell me and tell everybody to listen that robo markets don’t even start until you hit all times highs. And he was right. That is when the launch pad takes place. We’ve seen it in us equities. They hit an all Dow Jones SPF hundred, Nasdaq. Nasdaq 100 have all hit all time highs and then they keep going higher. But it’s just starting. And now bitcoin and gold have just hit all time high and now their bull market is starting.

[00:21:22]:
So it’s a very special time to be an investor. That’s been our theme for a while now. And why would we change it? It’s really just picking up speed. It’s going to get crazy, folks. It’s going to get Crazyville. Know that. We have yet to get to the hot IPO stage that’s coming. We’ve yet to get to the mergers and acquisition stage yet that’s coming.

We yet to get the stage of this bull market when people are quitting their jobs and droves to go home and day trade. But that’s coming. You have to get to the point where you get into your uber, your Lyft or taxi and they’re giving you their stock, hot stock and ETF tips. It is just the roaring two thousand and twenty s. I mean, that’s what we’re in. And again, early innings. All right, folks, listen, always appreciate you listening. Hope you had a great day and even better weekend.

We’ll see you back here again Monday after the close.

Podcast Newsletter

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Time Stamps

00:00 Daily View podcast: Tyler out, Kip in.
04:43 Underlying weakness seen in economic indicators, rates.
08:12 Semis lead market, up 760% since October.
12:41 Gold poised for significant growth despite low interest.
15:23 Bitcoin hits all-time high after previous shakeout.
17:50 Bitcoin price to reach $100,000 before halving.
19:41 Firms don't allow employees to buy bitcoin.

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