In today's episode, Tyler covers this week's eventful stock market action. While we started the week at all-time highs, we experienced some pullback across major indexes by the week's end. However, we continue to see buy-the-dip opportunities as the smart money strategy. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Friday afternoon everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a great day out there today. Hope it was a great end to your week this week as well. It was a weekend to the week this week and we started off this week at all time highs for our major indexes, but we did finish with some weakness here across the board for our major indexes. But if you’ve been tuning in with us here on the podcast, you know we’ve been talking about this a little bit. It was a phenomenal week last week after the Trump election.

Enthusiasm, you know, markets soared, bitcoin soared really across the board. A lot of all time highs last week. And this week here we had hit a little bit of overbought levels on our short term VRA momentum oscillator. So a pullback here is not a great surprise, both healthy and normal for a bull market. Here we can we’ll talk about a couple of the reasons for this action this week. I think the main story here is that we had hit overbought levels, but our point remains, our view remains unchanged here, that any opportunities that we have to buy the dip in this market remains the smart money strategy, the same smart money strategy we’ve been using since the October lows of 2022, which ended the bear market and has led to this phenomenal rally that we’ve seen over the last couple of years, which we still think we are in the early innings of here again, we just wrapped up year two of this bull market, a bull market that we see is having a long way to go here. And there’s still so many reasons to be bullish on this market. Even taking out the Trump enthusiasm which will help send this market to new levels of highs, the new Trump economic miracle 2.0 that we’ve talked so much about here.

[00:02:12]:
But in the shorter term, again, we had hit overbought levels. But remember, we just learned this yesterday as well. We have record levels of cash sitting on the sidelines right now in money markets that continues to grow, hitting an all time high of $7 trillion. Absolutely astounding to believe. I know there was a lot of hesitancy. You know, we heard it from members, we heard it from friends, family, really people in our industry as well that were hesitant to be long this market going into the election. And now that we’ve hit that point and we’re through it, we think there’s a lot of that cash is going to be coming off of the sidelines, which just adds more fuel to the fire for this market. This is the return of animal spirits that we’ve talked so much about here.

And we’ve got to remember, you know, again, last week’s enthusiasm was about the election. This week, you know, kind of settled into that a little bit. All right, we’ve got a little time to go. He didn’t get inaugurated until January 20th. Yes, some very exciting things are happening right now and that’s sending some shock waves through the market as well. Like we’ve seen with RFK’s nomination as the, the new Director of Healthcare. What I’m forgetting the exact position here, but I think you’ve all probably seen the news by now which absolutely has destroyed biotech companies and rightfully so. So many of these organizations that are, you know, have multiple felonies under their names that make up a large section of our health care stocks in the biotech sector, you know, talking about Pfizer, Moderna, both of which were hit hard on the day, the sector overall down 5.3%.

[00:04:05]:
You know, no love lost there for us. It’s similar to the financials. Yes, we want to see the financials participating in a bull market. It’s just part of a healthy bull market. But if they were getting hit for the right reasons.

Going after some of the practices from the large banks out there and financials were getting hit, you know, long run, we look at that as a healthy and bullish thing for our economy as a whole and for the market as well. So again with the financials got hit, no love loss there either, but we’re seeing it in biotechs right now, which we don’t mind seeing at all. And so yes, there’s been some market reaction in that from that point of view. But overall, you know, we see a couple of reasons for the action this week. First and foremost, again after the massive post election rally, we had hit overbought levels. Second here, you know, the story last week, again, the excitement there and kind of the reality of coming home to it this week where we had some warmer than expected inflation data on the week. Now we think that most of the inflation story is in our rear view mirror here, but that don’t, doesn’t mean it won’t spook the market in the short term.

[00:05:17]:
And the second part, again, part, a second part of this second part here is the Fed. And so the comments from Jay Powell last week in his FOMC meeting and this week as well following those warmer than Expected inflation numbers.

These comments have just kind of taken some of the excitement out of the market this week. You know, the Fed talking about looking at a shallower Fed rate cut cycle than expected. You know, that has the market a little bit worried. But we think those are reactions. Right. And we don’t like to invest based off of emotional responses, reactive responses. Right. That’s not what we want to do here at the vra.

That’s why we have the VRA investing system. So again, we’ll use any weakness to buy the dips in this market. But I do want to pause on the Fed for a second here because it seems like since the election election Jay Powell is back to his old ways here, you know, doing his best impression of his old self. Remember, Jay Powell has the worst track record of any modern Fed chairman since they started doing these post FOMC meeting newsreels that they do the constant speaking at events. Right. Fed chairman and Fed officials have been turned into celebrities and not rightfully so.

[00:06:48]:
In our opinion, at least so of any Fed chairman. They only started doing these speeches with every meeting I think in the last 20 years or so. And you can tell J. Powell very much likes the attention. You know, especially thinking now to some of his previous comments when Biden was in office and really now the post election J. Powell that we’re seeing here. I don’t want to hit him too hard, but I would say he seems very much like a very bitter person now compared to where who he was before.

And again, I think he does like the attention a lot. So he at least on the surface, watching some of his comments and thinking about him, in hindsight now he seems like someone who, who is learned that their time in the limelight is coming to an end and very much trying to hold on to it here as much as possible. You know, thanks to the Project Veritas video, we know that Jay Powell very much is not a fan of Donald Trump. So I wouldn’t expect much positive out of him. But you can’t have it both ways. Jay Powell, you can’t say, oh, the Fed is so independent and our independence is the most important thing for a resilient financial system and then also not be able to contain your emotion based off of who is president.

[00:08:13]:
We already know that the Fed is politically motivated and now their rate cuts from this year appear even more politically motivated in hindsight.

Most people said that at the time. You know, there definitely was an argument that could be made that the Fed was overly restrictive. We were in that camp that yes, it looks political here. You, you should have cut rates already though in our view, you know, earlier this year or at least have not raised rates as high as they did was our initial view there. But now it does make that, that decision look even more political when just after the election now they’re not looking at rate cuts anymore.

And you could say for whatever reasons, but the reasons that he’s given in the FOMC meeting and his follow up comments now, you know, he doesn’t really seem to have a very good reason for having done that outside of the political spectrum. At least he’s not answering the questions very well at all. So it’s, you know, again the Fed members may remember this are roughly 80% Democrats there as well. So it’s hard to make the argument that this is any kind of an independent organization anymore. So it’s certainly going to be very interesting to watch what happens next in the Fed in the coming years. You know, at the very least we get rid of Jay Powell when his term ends in May of 2026. So we’ll see. You know, stay tuned.

[00:09:41]:
We’ll continue to re reporting on that here. We have one more FOMC meeting before the year ends. On that note, yields were slightly higher today. Finished well off the highs of the day though we did get back above 4 1/2% on the 10 year yield for the first time since May earlier this year. So you know, it wasn’t a problem for our major indexes in May. We talk about this here a lot. But rates at a 4.5% don’t concern us here. You know, we’re looking also at yields that have gotten extended as well and hit overbought levels too.

So again we compare this period a lot to the 1995-2000.com melt up. The NASDAQ rallied 575%. Yields averaged well above this level, you know, 6% level. So no, again yields at 4 1/2% aren’t a major concern for us here. Now turning to our markets on the day to day again, you know, an ugly day to finish out the week here. We started off the week at all time highs. You know we’ll look at it a little differently though. This is a market that is working off overbought conditions here after a great run to all time highs.

[00:10:59]:
So I just want to stress that here one more time. You know, yes, we finished lower across the board. We’ll look at this as a buying opportunity and wait till I get to the sectors on the day to day as well. Because on a day like today, if we were looking for a big move lower, you get sectors negative across the board. There’s no bright spots on the day and there are still very many bright spots in a market that we continue to see as broadening here. And remember the semis have not been participating yet. If we get to the level semis start participating here, we’ve got Nvidia earnings coming out next week. That could be a big catalyst for the semis to get back to all time highs and then you know, this week is a distant memory.

All right, so looking at our major indexes, the Dow held up the best on the day and on the week down 7/10 of 1% to 43,444. Still that’s an incredible number right there, isn’t it? Even after a little bit of a pullback after that the s P down 1.3% to 5,870. Excuse me, after that the Russell 2000 down 1.4% to 2,303 and finally the Nasdaq down two and a quarter percent to 18,680. And I will point out the semis did lead lower here down 3.3% on the day to day. But we just shared this chart with our members this morning. If you look at the comparison of SMH to spy, the S P500 ETF, we have reached a level of oversold that we’ve only seen eight times in the last couple of years here. And each time that we have gotten to that level served as great buying opportunities for the semis. So again we look, we look at this as a buying opportunity especially for the semis here.

[00:12:52]:
All right, looking at our internals on the day to day, you know, not pretty numbers here, negative across the board here, but also you know, not terrible numbers here. After a week like we just saw, you know, nothing out of out of the ordinary here. We did have more declining stocks than advancing stocks. Coming in just shy of 2 to 1 negative on the NYSE. Just over 2 to 1 negative on the NASDAQ. 52 week highs to lows also coming in negative here just by a few issues though on the nyse but coming in roughly four and a half to one negative on the Nasdaq. Remember the NASDAQ does not all is not completely made up of prime time players. So it’s not uncommon to see these kinds of 52 week lows after a move like this.

Lastly here, volume coming in negative as well for both the NYSE and the Nasdaq, but no two to one beats or anything here today. All right, looking at our sectors, as I mentioned earlier, it wasn’t a throw the baby out with the bathwater kind of day to day. And yes, this was more defensive sectors heading higher here. But interestingly, even with yields higher on the day, utilities actually leading the way. And utilities, we’ve talked about this for some time, they’re the biggest borrowers in the nation. So very yield sensitive. Seeing utilities head up with yields, you know, considering that the stock market is a forward looking mechan mechanism, you know, utilities here tells us that yields will continue to head lower after that. We had financials and real estate positive on the day.

Our biggest losers on the day, tech as you might expect. Healthcare as you might expect. Again with the RFK news earlier and communication services. Finally here for today, our VRA Commodity watch. Not a whole lot to look at here either. Gold now down 210 of 1% to 2,567. I will point out here. You know, we’ve talked a lot over the last couple weeks about the strength in the US Dollar.

[00:14:55]:
Dollar was up slightly today. We talked about this here earlier in the week. Kip has as well that when during Trump’s first term, you know this, we got a similar move in the dollar right after he was elected, but then his first year in office, the US Dollar fell significantly. So we could be looking at a similar kind of move here for the dollar after that we had silver down 7/10 of 1% to $30.33 an ounce. After that copper down 6/10 of 1% to $4.06 a pound. Oil now down to $66 a barrel, down 2 1/2% at $66 barrel. And finally for today, bitcoin getting some love, you know, positive one on the screen here to wrap up the week. Getting some love to close out the week up 4.2% now on the day to $91,336 of Bitcoin just below its all time high 93226 from just a couple of days ago.

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 vraletter. Com, click the podcast link at the top and we’d love to have you with us. Thanks again for tuning in. Until next time, have a great weekend. We’ll see you back here on Monday for the close.