In today's episode, Kip covers the market's rocky return to trading after the long Easter weekend. Kip breaks down the latest economic data and what the future of global trade may hold. He also dives into today's declines in our major indexes, the surge in gold, and where other opportunities may be in today's trading. Tune into today's VRA Investing Podcast to learn more.

Don’t look back because the market is closed. Good Monday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Hope your Easter weekend, long Easter weekend was good as well.

Unfortunately, we came back to these markets and to this economy, this slowing and to just mass confusion that’s happening everywhere because of Trump’s tariff policy. I think it’s important, I think it’s really important, as a matter of fact, that Trump supporters, and that is me, I’m in that group, right. Taking a lot of heat for that over the years.

Folks lost a lot of clients and subscribers over it. You know, look, I’m not a, I’m not a Johnny come lately here. Okay? Go back to early 2016, when I first endorsed Trump and I was one of the first Wall street types to do so. Wrote a book predicting he win and he won. And again, taking a lot of heat for the year side. My point is this, and I include myself in this group because I’m a Trump supporter. And it’s really important, really important that Trump supporters start, start speaking up. I’ll be honest, I’m seeing a lot of cowardice.

[00:00:58]:
There’s a difference between loyalty and blind loyalty. Because what’s happening with Trump’s tariff policy has just been the word I’ve used all along, has been reckless, been reckless and horribly communicated. What is the strategy? You know, the Japanese trade delegation left, I think it was on Thursday. And the reports now that they’re like, we don’t know what they want. They haven’t told us what they want. So it’s not. And maybe chaos is part of this master plan. I don’t have.

Lucy, I got a lot of questions. Well, I got a lot of questions, but again, markets got hit today. Let’s cover that quick. Got a lot of points to cover today. Gold continues to soar. Earnings are starting to pick up speed. Got some interesting, I think, insights on that, what we’re looking for. And now we’re seeing the technicals begin to combine with the fundamentals for the next move.

Lower potentially at the same time as I speak right now, the Trump is in the White House meeting with the C. I think it’s the CEOs. The, the heads of, I believe I saw of Walmart, Target, Home Depot and Lowe’s. I think those are the four. Amazon, I’m sorry, Amazon and one of the either Lowe’s or Home Depot. But meeting with them about tariff policy, we could very well have Trump come out for a microphone and announce changes to Terror policy, because that’s where this lies. As I wrote this morning, everything about this market comes down to one man. It is the President who can change his mind, as he’s shown.

[00:02:37]:
He will do very quickly. And I would imagine that that was a very no hold bars meeting. That’s the way Trump likes it anyway. He likes it. He likes directness and likes honesty and he likes loyalty. But he also understands I can’t be surrounded by yes men. Being surrounded by yes men gets me nowhere. Okay? And unfortunately, that does describe a lot of Trump’s administrations because anyone that’s taken Trump on has lost.

Look at Ron DeSantis. I can give you about another hundred examples. So again, Trump has got, I think, I think he’s got a great team surrounding him. Okay. I think he’s made some great choices for cabinet and for his financial people. But now we’re starting to see the cracks right, in that organization with people like Peter Navarro, who’s been a real loose cannon. I don’t think he’s done Trump any favors. Maybe he’s Trump’s hitman.

[00:03:30]:
As Tyler said, as Tyler told me, he’s. What’s the guy’s name from the first term with Trump? Was it Defense Secretary? Was it the wild guy with the big mustache? Apologies. It’s been one of those days. Been up since about 2:00 this morning. I don’t sleep a lot in these kind of markets. My mind just keeps racing, as I’m sure yours does as well. But again, I think the key point I’m trying to make here is that it does come down to one man. And I think it’s really important that the Trump’s base, this is when you speak up, this is if you see it, if you see something not working for you.

And that thing not working is again, at the bottom from what, three weeks ago, this market lost $11 trillion. And it happened quick, right? Maybe you’re a really long term thinker, maybe you’re younger, maybe this doesn’t bother you. Maybe you’re just using it to add to your positions. Hey, I’m all for that. I applaud your efforts. But that doesn’t apply to people that are in 60s like me, 70s, 80s, 90s, people that were planning to retire. You know, when I was on, I was on Fox Business on Thursday and the guy that runs the Fox studio here in Houston pulled me aside afterwards and said, so I can tell you’re concerned now. Now tell me, tell me what I should do.

[00:04:55]:
What, what are you thinking here? Because I was planning on retiring this year and that doesn’t look possible. I got to meet with my financial planner coming this week. But what are your thoughts? And so I just gave him both sides of the equation and I said what I said to you here. This is all down to one man. It is Trump. And because he’s always been, at the end of the day, he’s, he’s listened to his base. He reads the room better than, and I’ve said this over the years, Trump reads the room as well, if not better than any politician or human being that I’ve ever seen. And if he’s reading the room now, unless he’s only surrounded by the likes of Peter Navarro, right then he’s getting an earful.

And I hope that’s what he got today from these, from these retail heads about the trouble that’s coming our way. I’ll share more of that in just a moment with you. And again, this is not yet another, this is not Peter Trump. But I’ll say one more time, this is when true is Trump supporters, right? This is when you speak up, right? This is when you want, you want your voice to be heard, be on social media or whatever context that you have. Because this rollout has been, it’s been bad. I mean there’s no, you can’t, you can’t put lipstick on this pig. So you know, again, it’s a long way till this thing is done. It’s very possible, maybe even probable that Trump’s got a master plan none of us are aware of.

[00:06:20]:
But right now, this is not a good looking market. This is a clear bear market with 200 day moving averages that have rolled over. We have a, like a page long list of, of death crosses. And like those, those can be, those can be unreliable. But in my experience, when you’re rolling into a bear market with the 200 day moving average rolling over just as the death crosses are happening, my experience with that is not good. From the long side, this is a market that is full of risk again, I’ll come back to that in a moment. Dow Jones, today we finished off the lows by what, a couple hundred points today? My guess is because of that White House meeting, I would think that there’s some people covering shorts and maybe taking some long positions just in case because we’ve seen what this market will do when Trump puts out good news out there. Okay, we saw what the third, the third biggest single day gain since World War II happened just a couple weeks ago on exactly this.

So I think that’s why the market rallies today. Otherwise, especially with Trump hitting Jay Powell again, you know, again, I’m going to come back to that. That’s an important segment we’re going to do here about get Trump because that’s, I think most of what we’re seeing here is matter of fact, I think it’s all get Trump. It’s all get Trump. That’s what we’re seeing here in this market, certainly what we’re seeing with the Federal Reserve. Next time Jay Powell says we’re not political, just look for the nearest trash can so you can vomit in it. Because it’s just complete bullshit when he says that, we all know it. If this was Joe Biden as president and they had some big grand grandiose plan like Trump’s tariff strategy wanted to pull off, oh man, they’d have already cut.

[00:07:54]:
Since the election, since the election, they had already cut three times. I promise you that would have happened. And I think we all know that. But we’ll come back to that. Again. Dow Jones off the lows finishing down 2.5%. SB 500 really writes the same. 2.4%.

Russ 2000 down 2.1%. Nasdaq leading lower down 2.5% and leading Nasdaq lower. And this is what we, again, what we don’t want to see is the semis down 2.5%. So they’re really, semis actually did come back a bit at one point. They were down over 4% today. So again, a bit of a recovery this afternoon. I will take that as, as a, as, as a, as a, as a possible win there. 10 year yields.

Here we go again. 10 year yields today on yield basis up 1.66%. That’s a 7 basis point move higher a yield to 10 year yield at 4.405%. Our recent highs, if you remember was 4.1, 4.51% from a couple weeks ago. And again, the 5% level, that’s going to be, that’s going to be the line in the sand. I believe if this 10 year yield gets to 5%, and I have no reason to think it won’t at this rate. I think the die is cast. This is the leverage.

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This is Trump’s pain threshold. It’s the bond market. It’s the bond market. Vigilantes. We saw it the last time. We know that’s what he will cave on. And he did. I mean, again, I’m a Trump supporter, but you got to be honest about this, right? He’s completely caved to the bond market vigilantes.

And he’s not the first. Most every president has done this at some point because they rule the world. Banks and bond market vigilantes, they rule the financial world. They are truly the financial masters of the universe from Bonfire, the vanities. That’s who they are. And of course, that extends to the central bank heads as well. Or to the cartel, I should say, of central banks. So, yeah, not, not a good look today.

Again, a bit of a rally here. But it all as, again, it all comes to it just, we all know this. It comes down to women. Here’s what I hope that Trump is looking at. And he has to be right again. He has to know what I’m about to tell you. We learned over the weekend, global container booking volumes, right? Global global shipping, okay, is plummeting. This is in multiple industry publications booking volumes.

[00:10:21]:
This is for the week of. It’s like, it’s like, it’s like two weeks ago, right, for, for a one week run. It’s a bit, it’s a bit late to update. Okay. But anyway, total booking volumes have fallen over that time frame by 49%. Imports from China have collapsed 57%. So these readings are, I’m gonna come back to that because a lot of people are going, hey, that’s good, that’s what we want to see. That Trump’s whole objective is to get rid of China and bring manufacturing back home.

There’s no doubt about. That’s right. Just know that these readings are worse than what we saw during the pandemic. And we really haven’t even seen the beginning of the slowdown yet, frankly, because China has essentially now stopped shipping to the US So how long does it take to get here from there? I don’t know, is it a week, 10 days or something? So you see what the future is going to look like. A lot more of this and a lot worse than this. So Trump has to be looking at this. And the counterpoint to this is exactly what Trump wants to see is this. How long is it going to take for US Manufacturing to make up for these international shipments that we are not receiving? How long? And remember, it’s a two way street.

[00:11:41]:
Our shipments to other countries are a lot of, there’s tariffs on us that way as well. So that’s with China and Europe. So global trade is collapsing. That is just a fact. And if you say that’s good news because we want to build out here, look, I support you. I think it’s great. How long is it going to take, how long is it going to take to build these, to build these manufacturing plants and hire these people, train these people, get these products made? Because like for companies like Amazon, it really matters. 70% of their products come from China.

Again, that’s, that’s, that’s what we want to not see. Right, I get it. However, think about small businesses, the million upon millions of small businesses that their entire business model is based on importing from around the world and selling those cheaper products. All it’s going to take is a shortfall of one to two months from the shipments and these companies, again, millions of small businessmen and women are out of business. So again, it does feel like a part two, doesn’t it, of the plandemic? In so many ways it does. But we have a little bit of Runway because at the same time this is happening, we also have individuals and companies that are front running the tariffs. They’re buying in advance. That demand pulls.

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It’s called as we onshore and as we front run tariffs. So I think that’s going to be supportive of GDP early in this quarter and it might even save the second quarter. So Trump might have some time. I just don’t think it’s a lot. And again, if we’re aware of this, Trump’s aware of this, which is why we continue to believe that trade deals will be completed in the near term. The first two most likely are Japan and South Korea. Again, these are allies. These are pretty much all allies of ours, except maybe for China.

So these deals you would think could be easily forthcoming, but they’re not so far. The question starts to become why is that? And will Trump have to cave again? Because if the 10 year yield gets anywhere near 5%, the decline we’ve seen in the market so far is just a snapshot of what’s to come. I don’t wish that, I don’t want that. I’m telling you that’s what’s going to happen. There are a couple of trading points that we’re looking at. I’ll just mention it to you briefly here because we look for repeating patterns and frankly I really like trading. I hate the feel of these markets. But when you can trade counter trend action with the primary trend, something I’ve got a fair amount of experience in, these can be extremely profitable trading environments.

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Right. But you have to have a different mindset. We’re not now talking about buying and holding for a year or two or three. We’re long term investors here. We’re position builders. Except for our leveraged ETFs, which we trade everything else, we’re long term. That’s the Peter lynch school of investing, Warren Buffett school of investing. It worked for them, it’s worked for me.

Not to the same extent, but pretty proud of our results. So here’s the trading point that we’re looking for and we will be acting on this as this trading pattern of Trump supporting the markets with good trading news. Because that’s the only time the market goes up. It’s when Trump says something positive. If that stops working, that would be a pattern change. At that point, the markets will start reversing lower. On trade news. I’ve seen this happen so many times.

Hear me on this. If we see the current pattern of good trade news resulting in rallies, if that stops working and Trump loses the ability to make the markets go up with his tongue, right, with the spoken and written word on true social, then we’re going to start seeing high probability moves lower with velocity. These will be extremely profitable for a nimble investor. And that is what we started doing now in the VRE portfolio we had our first trade was a week ago. 25% in one day, a profit in one day. I think we’re going to have a lot more of those, but we’re going to pick our spots very carefully. It’s a no. I’m in no rush to do this whatsoever.

[00:15:58]:
We’re letting the market come to us on both sides. All right? We’re going to trade both sides of this market and let it come to us. The VIX today, by the way, was up 14% back to 3,382. I will be surprised at this point because the semis are leading lower. We shared this chart this morning. The most important chart to watch from a market timing point of view. And I don’t think there’s a close second. And I’ve written this up probably a thousand times over the last decade.

It’s the semis to the S P500. It’s a relative strength chart and I shared it this morning and it’s just a nine month pattern of lower highs and lower lows. I wish I’d paid attention to it. We talked about it all the time. I couldn’t believe it was breaking down. In my defense, I did not know Trump was going to initiate this kind of a tariff policy. Remember the day 10% baseline, and here are all the reciprocals. We’re like, wait, what? Rug pull? Right? Awesome.

[00:16:53]:
Horrible rug pull. And then the crash is on. But when the semi start leading higher and we’ll know this from this chart, this relative strength chart, semisi 100 when that starts happening, because right now the semis are still leading lower again, a little lower today. When that change comes, we will put on some aggressively long positions and we know exactly what to look for. It’s not just this chart. There’s some moving averages that we follow. You know, we’ll, we’ll walk you through all that in our very letters and we put out VRA alerts. We’ll tell you exactly what we’re doing, try to give you a day’s heads up notice if possible.

But kind of a bottom line is even with investor sentiment as bearish as it is, and we’re talking about levels of bearishness that we’ve not seen before. Just for that reason, this market should go up. Except it hasn’t been right. We were talking about the Fear and greed index being at what, 10 or 15amonth and a half ago? And it’s, and it was 22. Now somehow you know how that’s possible. But all these seven indicators show exactly how bearish people have gotten. So we are below the 200 day. We are in a bear market.

These rallies should be viewed for the time being at least as bear market rallies. It’s a high risk environment. We are in a high risk investment environment where our most urgent systemic risk may be in the process of playing out. And I don’t say those words lightly. I don’t want to say those words. I’m an optimist. I’d much rather be a bull than a bear. This could again turn on a dime with one, one man’s change of heart.

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Right. Doesn’t feel like he’s going to do that because if he does, I think a lot, Yeah, I think even his biggest supporters can go, so what was all this for? Right? What was the 11 trillion, what was the $11 trillion in losses? What was all the crap we had to take from Trump haters? What was all this for if we didn’t gain anything from it? That’s why he’s locked into this. But, but he’s compounding it because he’s also going after J. Powell and the Fed. I’ll come back to that in just a moment. But again, we’re seeing correlations break down. That’s what makes this a high risk investment environment. When you have, and I’ve been talking this now with you now for, since, since it happened, okay.

I said it on Charles Payne show on Thursday. We’ve only had this happen twice before. It just happened two weeks ago when the US Dollar, government bonds and the stock market all moved lower together. First of all, that’s very rare. But when they do it lower together with velocity, and that’s of course, what we’ve had as gold skyrockets. This has only happened now three times in history. 1987, the week of Black Monday crash, the week before the October 2008 market crash started, and then again two weeks ago. These are the kind of things that get your attention.

It’s not normal for interest rates to go up while the stock market is crashing. That’s not normal. Usually you also get support in the US Dollar. Again, you’re seeing correlations that are breaking down that simply have not broken down very often at all in the past. Last point. Then we move on to the again. Gold. Just what a champ.

[00:20:11]:
Gold today, up another $108 announced. That’s four days out of what, eight? That’s been up more than $100. That’s 3.2% move higher. 3.3% move higher today. What a champ. It’s extreme. Overbought does not care. The level of buying coming in is so obscene that it’s forcing.

I think even the manipulators right now are forced to say, well, we can’t stop this. You know, we can’t stop this. But as I wrote this morning, you look, we, we’ve had some really good trades here. We’ve got some great positions right, right now we, we love every position we have here, okay? Even Tesla, which was down another 5% today and reports earnings tomorrow to the close. We’ll have that for you tomorrow on our podcast after the close tomorrow. But it’s gold silver. But in particular, gold silver’s done okay too, though. It’s beaten the market, of course.

Gold, silver and the miners, the junior miners in particular. This is where our focus is, is is now. One of our junior miners today was up 12%, the other up three and a half percent. They’ve been on a hell of a run. What people don’t understand about this, if you don’t know, if you don’t know the industry like we do, like I do, okay, I’ve traded this group. I went to my first gold conference when I was still on Wall Street. It must have been 1995. My dad was a gold bug and I fell in love with junior miners.

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And that’s where we’ve had a lot of success. We’ve had a lot of success in this group. I have some big, big wins. I have no minds. Made in what, 12, 13 months. Vista Gold been in and out three times. This, I think this may be our fourth. No, this is our third time in it.

Gains of more than 600% and, and, you know, a whole lot of other singles and doubles. But the Junior Miners are still so incredibly cheap, even based on essentially every metric that there is, right? Cash flow multiples, price to earnings multiples, gold in the ground, cost of gold in the ground. These are trading at almost record low, if not record low valuations both to gold and to the overall stock market. The Junior Miners, they’re just now getting legs. Okay, that’s just starting to happen. This is a bull market. That’s only beginning. And the key point I think for this is that the reason this move is going to move higher, is going to spin so many heads, is that the management teams we speak with tell us that they see a wave of buyouts and increased mergers and acquisition coming.

The quote that we got from one of our companies last week was everyone is sniffing around one company that we work with, which I think Leo talked about this last week. Snowline Gold was in Australia last week on a roadshow. And the CEO, like I said, it’s Monday. Long day. Jesus, you’re losing a man. Sorry about this. But anyway, Snowline Gold CEO Scott Bertol, sorry about that. Scott gave me a story.

00:23:09]:
He said, listen, we’re me because they’re on a roadshow, you know, meeting with big investment groups. And he said, the industry people that we’re meeting with here in Australia are telling us because their company has a market cap of $1 trillion. Excuse me, of $1 billion. And he said the companies that they’re seeing being bought out in Australia and I guess probably throughout, throughout that region of the world, the companies that have the amount of gold that Snowline has in gold just based on one pit, just on their first emr, their first mineral resource report, okay, which was. Came in at 7.3 million ounces. They said companies that have, that are being bought out in Australia and in, in, in the region for anywhere from 3 to 5 to $7 billion. Snowline has that and their valuation is only a billion and they’re only, they’ve only so far tested one pit and they’ve got like more than 900,000 acres in the Kuon. So I think that as more and more people learn these stories, they’re going to just be blown away by how cheap these valuations are.

So I think we’re going to do really well in this group. Very confident about it again, even in a bear market, there are places to make money. As a reminder, even in a depression, there are places to make money. The best investment during the 1930s was a little company called Homestake Mines, who wasn’t so little, but over the decade of the Great Depression produced a total returns to investors. That’s annual gains plus special dividends. They used to pay a lot of those out, apparently, but Homestay made investors a total of 700% over that decade. Remember, gold was fixed because it was confiscated at a fixed price. They raised it later, but 25 to 35 or something, but again, still very tightly controlled.

[00:25:08]:
So the money was made in the miners. And so that is going to be, I think, great no matter what happens to the economy. The economy slowing, there’s no question about it. I think, I think, I think we’re going to make a lot of money in this group. And I think, I think the ones that we own are unbelievably cheap. Okay, so they’ve had good runs already, but, yeah, we’re still buying them. Okay, last point on Trump and Chair Powell. This morning I addressed the question, will Trump fire Powell? All right, first of all, that’s going to go to the Supreme Court pretty quick.

It’s been tried before 1935. FDR tried it unsuccessfully because, interestingly, the fetch here died before the trial could take place. So there was an answer to it, and it wasn’t a full answer, but essentially they were told no, that you, you just can’t, you can’t do that. Well, there’s another case now before the Supreme Court whether or not the president has the power to fire pretty much anybody he wants. It’s in an unelected federal position. That’s the case. It’s for the Supreme Court. I don’t have a date as to when that’s going to go.

[00:26:22]:
But again, the answer to the question, will Trump fire Powell? We think it’s unlikely. And I’ll tell you why not, not whether he can or can’t do it. It’s what happens next. Because I believe the turmoil globally, but again, US Centric and the financial attacks against Trump and America, because, remember, when we say get Trump, it’s get America. It’s one of the same. All right? We’re paying the price for what he’s trying to accomplish. Right? That’s the way this works. And again, his supporters have been incredibly true to him on this.

Right. How long would that last? Because when you get in the way of somebody’s money, you talk about A whole different dimension start to kick in. Okay. Worked on Wall Street a long time. Believe me, I know that to be true. But there’s a very loyal following to Trump that may stay with him through all of it, regardless of how bad it gets if that happens. But if he were to try to fire Powell, I believe it would be hardcore get Trump. Gerard Griffin, I’ve told this story so often over the years, taught me more than 30 years.

I think this must have been 35 years ago that Giovanna Griffin did just an amazing American legend. Okay. Creature from Jekyll and author, of course he spoke, I don’t know, 15 of my events over the years. We always had a private dinner before the event started. Just. He’s like your grandfather, you know, he’s just such a. He was just such a n is still going strong. A great guy.

[00:27:49]:
I miss the guy, but he taught me this more than 30 years ago that the most powerful cartel on the planet, and there are seven cartels. Geo Griffin does an entire presentation on this. Okay. It’s powerful. The most powerful cartel on the planet and he says not a close second is the banking cartel. So if Trump is going to go ahead and try to fire Powell, in other words, make a direct attack against not just the US Central bank, Federal Reserve, but all global central banks. Remember, they are the financial masters of the universe. At least that’s what they believe.

Look, I’ve said how many thousand times of the years in the Fed, Ron Paul always had it right. I’m not a defender of the Fed. Trust me on this, okay? Powell shouldn’t be there now. It’s the worst Fed chair of our time. Time. He’s. This is his fifth or sixth policy mistake that he’s made. This is a big one, by the way.

The one he’s making now is a big mistake, but it’s completely political. But if Trump goes after this group, I hope he’s got his ducks in a row. I believe JFK tried to do this and I hope that he’s got his, you know, his coalition in place because the damage they will do, could do and probably most likely would almost certainly would do to the US stock market and economy. They just wouldn’t care because at the end of the day, they’re going to show Trump whose boss they did it in 2018 with eight straight rate hikes when it wasn’t necessary. They were hiking. Racing into Christmas, folks, in December when no one was around to buy produced the Christmas from hell. The worst fourth quarter in Christmas since the worst than the Great Depression. We’d never have one worse.

[00:29:20]:
That’s how bad it was. It just ruined everyone’s Christmas. They did not care because they had to teach one person a lesson. And at the end of the day, he, they, they taught him. He got very quiet when it came to criticizing the Fed. Now he’s back to doing it again. But you got to get credit. Guys got balls the size of cantaloupes.

You got to, you obviously, obviously got to give him credit, all the credit in the world for the courage this man has. But sometimes I think you gotta, you gotta question the wisdom of some of his attacks. This is one I don’t get. He has a Treasury secretary named Scott Bessant who by everything we’ve heard, is really good at what he does, really respected on and off Wall Street. Let Besant be that guy. Right. And maybe that’s the game they’re playing. Good cop, bad cop.

Again, I don’t have those details, but my druther would be that Trump let Beset do this negotiating. And maybe if that was the case, the 10 year yield wouldn’t be at 4.4%, maybe be at 3.5%, which is where it should be. The 10 year yield should be at least very close to a full percent below where it is now. And the Trump. And with rate cuts taking place all of a sudden now, we’d have a very different market, wouldn’t we? We’d have a very different looking and feeling stock market. This market might even be up because people would understand, hey, look at this. The Fed and Trump are working together on this strategy. All right? This is the coalition that I’ve said from day one that I believe should have been who Am I right? Why does it matter what Kip thinks? And I get that.

[00:30:50]:
But so far this has not played out well. And I just have to hope for all of our sakes that these guys get together for the bet for the betterment of America and Americans and figure this out. Right? Because this is clearly something Trump wants to do. And Jay Powell is exactly wrong saying this is going to lead to inflation. They’re certain now they’re guessing. And that’s what he said. They don’t do. They don’t guess.

They’re absolutely guessing. And it is addressed to the Chicago Economic Club or whatever it was last week. He was over the line. His attacks on Trump, without question. Was he wrong? No, I don’t think he was. But any inflation we’re going to have is going to be, it is going to be transitory this time. And the Fed should be able to see through that because everything else that we see tells us that deflation, not inflation, deflation is taking place in America, maybe a lot of it. All right, Oil prices, true inflation shows the inflation rate’s been well below, below 2% now for more than six months.

[00:31:49]:
So this is political, it’s ego, it’s a repeated bonfire of the vanities, it’s master of the universe stuff. And we’re all just, we all are just having to watch them play chicken and play along, aren’t we? I don’t care for that very much. I don’t know about you. I don’t care for it. Okay, let’s take a look under the hood today again. These are not a good internals. It doesn’t matter how you look at it. Okay.

For the advanced decline, NYSE was 6.3 to 1 negative again. That’s getting up there. NASDAQ a little better. 3.13 to 1 negative. Down volume for NYSE was 84.8. That’s high. Not outrageously high, but it’s high. It was 90% about midday.

It got a little better. NASDAQ down volume was 63.5% again that’s, that’s fairly manageable. We had 60 stocks in a 52 week high to 300. Hit a new 52 week low. Do I think we’re going to have a retest of the lows? Yeah, I do and I think that could be very, very healthy. Double bottoms are extraordinarily healthy. Most sharp declines like this will are going to have. You’re going to have a double bottom.

[00:32:58]:
That’s just how the market works. I’d rather get it over sooner than later. And let’s just get it going. Let’s get a V shaped recovery. If we can get that going, that’d be great. But yeah, I think we are going to have a retest and then maybe then we’ll start to see retail investors change their outlook. Because this is one of the bigger issues problems that I have with this market. We’ve seen it in all the data.

Retail investors have been stepping up the plate and buying these three time leveraged ETFs like they’re going out of style. Like record. You’ve seen the stats, right? You’ve seen the charts, record levels. This is going parabolic. And I can tell you from the retail investors that I speak with, communicate with, hear from on X and other means of communication that most retailer, I’ll say, I’m going to say 70% of the retail investors I speak with are on the Trump train, aren’t selling and believe that this is all going to work out. That’s called complacency. And I put this down on X today. This is the most complacent I’ve seen retail investors in my career.

[00:34:09]:
I cannot remember a time where retail investors just said, oh, you’re gonna keep going, gonna keep going lower. Fine, fine. Keep, keep selling it to me lower. I’ll keep buying it lower. I don’t remember that happening in a decline that is this serious. Right. And again, I want to be wrong on this, but I’m just telling you that’s, that’s what my experience, it did with so far. And unfortunately, bottoms don’t take place like that.

Bottoms take place when retail capitulates, which might mean we got to go lower than just a retest. We have to get retail shaken out. Now, I also say this, okay, because that doesn’t have to happen. There’s no rule that says it has to happen. That’s just what normally happens. But there’s also, as I said last week, there is the possibility that, like Japan in the 1990s, early 2000s, which is the Mrs. I, I, I swear, I think I lost brain cells overnight. Mrs.

[00:35:10]:
Magataki Watanabe. Mrs. Watanabe, which is a real thing. It was actually retail investors. It wasn’t just women, but it was like 70% men, 30% women. And for that, you know, again, 30 years ago, 20 years ago, that’s, that’s, that, that you didn’t have that many. It surprised people to find out that many Asian women were playing the forex market and supporting the yen and doing the yen carry trade. And they were, it was so recognized, it became a global phenomenon.

They were, they supported, they helped save the yen. And some very crucial moments. Mrs. Watanabe. Well, our retail investors here, our Trump supporting retail investors here, may wind up being the Mrs. Watanabes of this, of this era. It’s entirely possible because again, the millennial generation has that kind of power and they certainly got that kind of money. It’s entirely possible.

[00:36:06]:
So, again, I don’t mean to play devil’s advocate myself, but there’s usually two sides of the story and that’s, there is two sides to where this can go. I think we need to get capitulation. But I’ll just wrap with this. It all comes down to one man’s Trump. What do you want to do? How fast do you want to end this? How far do you want to take it. And I don’t think any of us really have that answer at this point. And sector watch today all 11 sectors finished lower. Led the downside by consumer discretionary and technology both down 2.8%.

Again all 11 sectors lower. 8 sectors, 9 sectors down at least 2%. That’s rare. You don’t normally see that wide broader dispersion of sectors that were down about the same amount On a day like this I don’t think that’s a good sign either. For call ratio as Tyler told me was, was, was a little elevated today. But again, you know it closed at a 1.02. It traded about that range all day. 1.02 to 1.05.

[00:37:07]:
By now with these kind of declines you’d really want to see a put call ratio that was 1.3, 1.4. That’s what you see at capitulation bottoms. Again we just not quite see. We saw it one day but other than that it’s been, it’s been bearish. You know people buy more puts and calls but not by a lot. Not by a lot. In our commodity watch again just a house of fire gold. Gold up today 106 right now at the 30.

That’s June gold at 34, 35 an ounce. Of course another all time high right now it’s $7 off the, the high of the day which was 33 44. Our UN target from the beginning of the year was $4,000 an ounce. You know we’re, we’re probably gonna be on the low side at this rate because the demand for gold is just insane. And that’s everywhere. It’s everywhere. And everybody from central banks to governments to individuals to retail, everyone’s buying gold now. It’s extremely revolt and does not care.

[00:38:04]:
It just keeps going. It’s a honey badger. Just doesn’t care. Silver up 610 of 1% today at 3,266. I am surprised gotten going yet again as a precious metal rather than just an industrial metal. Copper today was down 2 pennies at 4.72 a pound. Crude oil down $28 a barrel back to 62.73. And finally the day bitcoin Getting a lot of questions about this.

Okay so let me just. I’m going to cover this in tomorrow’s letter. Right. Look and I understand it, we want one of the early bitcoin bulls. We’ve made a fortune in this group. 2200% in Bitcoin gains from, from in the last, over the last four years that we Booked, but we’re out of it now. Okay, so what’s our next move going to be? Well, right now it’s been trading extraordinarily well. It is trading differently.

This is a pattern change for Bitcoin. So here’s what we’re doing here. First of all, bitcoin, if you look at the chart, has now rallied back to the 200 day moving average. I think, I think, I think it’s right at it. Okay, maybe just above it. But See now the 200 day may serve as resistance instead of support. So the script is flipped. At the same time, Bitcoin is hitting extreme overbought levels on our shortest term momentum oscillator stochastics.

[00:39:23]:
Just looking at the chart, if the market continues lower and if we get that retest that, that, that we’re looking for, I would expect Bitcoin to give up some of these gains. I would expect bitcoin to at least get back into 70s and let’s see how it responds there. That’d still be fantastic because again, in every big sharp decline we’ve had in the stock market, Bitcoin has wound up, you know, is a liquidity event, if you will, and is wound up going sharply lower. And that has not happened this time. You know, I mean look at the high was like 107, right? Low of like 72 during the turmoil. But it’s bounced back down again to 87 last trade up 2 1/2% on the day. So we are going to take a wait and see approach here. If I, we have to buy back higher, I have, have absolutely no problem with that.

Okay. It’s only up, it’s only 5% higher than when we sold it. Who cares? And again, where bitcoin’s going to go, which is going to be a million dollars. Okay, I understand. If you didn’t sell bitcoin based just on our trading system, I have no problem with that. That’s off to you. Right. But we did it because again, past experiences, Bitcoin has gone lower in liquidity events.

[00:40:34]:
That’s what we’ve had here. Right. Very risk off liquidity events. And now with these correlations breaking down, again, it was just a probability thing. And that’s why we sold didn’t want to. It was a tough call. It was like 51, 49 that we do it. And we said, you know what, let’s just, let’s raise cash, let’s not take any chances.

And by the way, it was the right move at the time. Again, it dropped 10,000 from where we sold it. But you know, it’s back above it now. So we’re not going to play the short term day trading game with bitcoin. When we buy it back, it’ll be for all the right reasons and then again we’ll be long it probably for another couple of years or something. Right? So that’s what’s happening with bitcoin and that is our view there. All right, folks. Oh, I got one.

I’m a wrap with a quote from Jim Grant of Grant’s Interest Rate Observer. If you know the bond market, then you know Jim Grant. Great quote from Jim Grant. The Fed’s dual mandate is as arsonist and firefighter. How perfect is that? And it’s so incredibly true. All right, folks, that’s it for the day. Hope you had a great day. Even better night.

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