In today's episode, Tyler breaks down another exciting day of trading that saw our major indexes rally across the board, marking four consecutive days of gains for both the Nasdaq and semiconductors. We'll also cover today's latest economic data and it's potential implications for the Federal Reserve. Tune into today's podcast to learn more.

Dont look back because the market is closed. Good Thursday afternoon, everyone. Tyler Herriage here with you for todays VRA investing podcast. Hope you all had a great day out there today. If you were watching the markets today, you know, it was another good day for our major indexes for our sectors really across the board here. And one thing that we’ve seen all week, this week, and it continued today as well, it looked a little shaky out of the gate this morning, you know, mixed market action right out of the open, and then we were able to finish higher across the board here, wrapping up now four days in a row of gains for the Nasdaq, four days of gains here for the semis as well. So another good session. And exactly what you want to see if you’re bullish on the market is finishing well off the lows of the morning.

Even if we were higher in the morning trading to finish strong and get a strong smart money hour like we saw today, especially from the Dow Jones and the S & P 500, both finishing at their highs of the day today. So that has been the theme of this week, mixed to lower opens to finishing near the highs of the day. We want to see that kind of trading continue here. And we’ve got a few reasons for it that we see as to why that’s happening. Now, I’ll dive into those here today, but first, this morning, we got another look at inflation data here. We had the producers price index following yesterday’s CPI number and similar to the CPI number, no big surprises here. And really, the market’s attention has shifted from inflation data to jobs data. Now is that’s what the Fed has been talking about.

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You know, part of their, what they call their dual mandate managing inflation and the job market as well. So now that they feel that they’ve got inflation under control, I use the term feel there very intentionally. Um, now their shift, their focus has shifted to the jobs market. But again, let’s cover it here quickly. We had August PPI on a year over year basis falling to 1.7%, which was below expectations of 1.8%. Core PPI inflation unchanged at 2.4% again, though, below expectations of two and a half percent. So no big surprises there. But what was interesting today is earlier this morning, after the data was released, we saw, well, let me take a step back here.

Going into today, the odds for a 25 basis point cut from the Fed was the firm majority probability. Just yesterday, it was 86% likelihood for just a 25 basis point cut. Now, today, that shifted. And what I found interesting is it wasn’t the inflation data that seemed to cause this, because after the inflation data came out, there was just barely a slight downtick in the probability of a 25 basis point cut. But as the day went on, the odds of a 50 basis point cut really shot up. So it went into the day at just a 14% likelihood of a 50 basis point cut. We close the day at a 37% likelihood of a 50 basis point cut. So again, now the focus shifts here from inflation data that we got today into next Wednesday’s announcement from the Fed.

And Kip covered this on his podcast yesterday. You know, he’s looking for a 50 basis point cut. And I agree with that here as well, that the Fed should cut 50 basis points. But I also felt that they should have been cutting ahead of this meeting. Right. So I think most people see it as, yes, they should absolutely be cutting by 50 basis points, but after the major policy errors that we’ve seen from Jay Powell, you know, it’s tough to really get your hopes up there. Now, what is interesting here is we know that this, the Biden administration is notorious for leaking data ahead of public announcements, and we know that the Federal Reserve is certainly not above that either. So the fact that the probability of a 50 basis point cut was up today and again, hours after the PPI data came out of could be an indicator here that the Fed is considering a larger cut.

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And again, would not be surprised at all to find out that they’ve leaked that decision beforehand, or at least leaked the idea that they’re willing to cut by 50 basis points. So we’ll be watching the market closely. We believe the market might be telling us that now as well. And we’ll certainly be watching the CME group’s Fed watch tool here to see what the shifts take place into Wednesday, next Wednesday’s decision here. But again, this market action here does look like front running of that event. And since we do remain and have been long and strong, this market will take it here. Absolutely. I will point out yields were slightly higher on the day to day, the ten year of three quarters of 1%, still just at a 3.7%.

And I’ll point out that we are still at very oversold levels here for yields. So a little bounce like we saw today and even a little continuation from there would not surprise us. But if you’re a longtime listener, you know our view over the long term, medium to long term, the trend for rates continues to be lower, and nothing has changed in that regard. We still see yields heading lower from here. All right, so now let’s shift gears here and take a look at our market action on the day to day again, good day here. Our major indexes finishing positive across the board. We were led here by the small caps, which have been performing very well this week. Led the way today, up 1.22% to 21 29.

Next up, the Nasdaq. As I mentioned, both the semis and the Nasdaq wrapping up for positive sessions in a row here. The Nasdaq up a full 1% to 17,569. Now, the semis did not have as good of a day, up two tenths of 1%. So hey, still a win here. And remember, we were up over 5% on the semis yesterday. So no concerns for us there at all. We think the semis will continue to lead, really the chart here, bouncing off of the 200 day, making a nice, you know, somewhat double bottom here for the semis.

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A lot of these charts look similar here, that we’re bouncing off of important trend lines, which is exactly what you want to see. We want to see those support levels holding. It’s exactly what we’ve gotten. Yes, pullbacks like this, especially what we’ve seen in the semis, are never fun, especially when you’ve got a long position on right. But as we see it, we remain in a new bull market, a structural bull market of size and scope. And the dips like this need to continue to be bought. We said it here in early August, shortly after the August 5 lows. We said that might be the low for the semis for the rest of the year.

And that would be a phenomenal buying opportunity. And that is continuing to look like what it is shaping up to be here. Even where we are right now, we’re nowhere near overbought levels. Buying anywhere in this range is going to. We think you’re going to be very happy with that decision over the medium to long term. Absolutely. So again, Nasdaq having a good day today. Semi is taking a little breather after that massive day that we saw yesterday.

Next up, the s and P 500, up three quarters of 1% to 5595. And this might shock a lot of people if you look at the chart, we are so close to all time highs here. If we get another two days like we saw today, we’re just, let’s see, 70 ish points, 74, 75 points away from an all time high. We were up 41 points today. So again, another two days like this and we are back to all time high territory here. And I’ll also point this out that yesterday we saw what technicians refer to as an outside reversal day, which is that earlier in the session we had a lower low than the day before, but we finished above the highs of the previous session. Again, in technical analysis, this indicates a potential change in trend, especially in the short term here. The short term trend has, was lower for the S P from its all time highs.

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So this is a bullish outside day here. And the last time it happened was in June, when the S P went on to rally big into those all time highs as well. That’s the kind of move we’re looking for here again to fresh all time highs and beyond Dow Jones also up on the day to day, up just over half of 1% to 41,096. And I’ll point out here as well, we are just 500 points away from an all time high in the Dow Jones as well. When you’re that close to all time highs, it’s very tough to be bearish. You’ve seen the bears here have really gotten quiet this week. You know, they’re shouting from the rooftops last week that, oh, the charts are so ugly. And there are some, there is certainly an aspect to it there, but these charts have improved quickly this week and we want to see that continue.

But what has been different from the rebound that we’ve seen here has been sentiment, and that is what continues to have us bullish. I from the August 5 lows, any bounce back that we’ve seen, we quickly went from fear to greed on the fear and greed index. That has not been the case this time. We’re still in fear mode on the fear and greed index here, and we saw it today. We got back the latest AaIII, investor sentiment survey, which very similar story. Any bounce back that we saw was methadone with a bullish sentiment to it as well today. That was not the case. For the first time since June 5, bulls have dropped below 40% here, 39.8, bulls falling 6% week over week here with a nice uptick in bears as well.

So again, as contrarians, that’s the kind of action that we really like to see. Next up here looking at our internals on the day to day. Similar to our major indexes, the internals rallied into the close today, finishing positive here across the board, advancing stocks beating out declining stocks. Over three to one positive on the NYSE, just shy of two to one positive. Excuse me, let me sip of water here. All right. Again, just shy of two to one positive here on the Nasdaq 52 highs to lows, nearly ten to one positive for the NYSE and coming in positive on the Nasdaq as well. And despite the number of updates we’ve seen from the Nasdaq, we haven’t seen as many updates for 52 week highs to lows.

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Now, the 52 week lows, it was a small number. We still haven’t seen any uptick in the number of stocks hitting 52 week lows with. Which is another factor here for us that has us so bullish once we get back to the point. And there will come a day where we start to see a big uptick in the stocks hitting 52 week lows. That’s just not the case right now. We’ll continue to alert you to that here, but good to see positive numbers there. Lastly, volume coming in nicely. Positive as well.

2.5 to one positive on the Nyse. Just shy of two to one positive on the Nasdaq today. Next up here, looking at our sectors on the day to day, the S and P 500, all eleven sectors coming in. Positive communication services, which is a proxy for tech here, leading the way up a big 2% on the day to day, followed by consumer, discretionary and energy. Our laggards here have been the leaders as of late, still finishing positive, but up by the least amount here, which was real estate, which, if I’m not mistaken, that might have been another all our 52 week high today. Let’s see, just pennies away from a 52 week high here, despite being our laggard on the day, followed there by financials and the utilities. So good day from our sectors here. And finally here for today, our VRA commodity watch.

I wanted to spend a little time on this because this has been a big day for commodities. Gold breaking out here. Hitting an all time high today. Up a big 1.76% now to 25 87, taking out that mid August all time high. And just what you want to see from this group, the miners leading the way, also very close here to a 52 week high. And, you know, in our view, this is where the real leverage in this group takes place, because this has been such an unloved area of this market. You have to go all the way back to 2011 to find the all time high in the gold miners. So we’re still over 30% below those all time highs.

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This is, again, where the real money to be made from this group is. Of course, you do want to own gold in your portfolio, but there’s absolutely a place for the gold miners here. One thing that we’ve liked about this group for a long time. They’re well financed, low debt levels. And again, such an unloved area, you know, and maybe for a good reason, because it has been, you know, it’s been a rough road for the gold miners. There’s been some great trades in there, but no breakouts from this group. We feel like we’re on the verge of one of those right now. We also got good volume today, far below what really good volume would be from this group.

But this was the biggest buy side day since April from this group. So that’s exactly what we want to see and confirms our view here. And once we start to get that volume into this and the miners begin to be loved by this market, we really think it’s going to be a rocket ship kind of move higher from the gold miners. Next up here, silver up nicely on the day as well. Up a big 4.4% back above $30 an ounce at $30.21 an ounce. Copper up over one and a half percent as well at $4.21 a pound. Oil trying to make a comeback here. Still below $70 a barrel, but it’s working on it.

Up 2.8% on the day now at $69.19 an ounce. And lastly here for today, crypto also continuing its rally on the week, getting to its highest levels of the week, up 1.2% now to $58,170 a bitcoin, folks, that is all that we have time for here today. Please be sure to subscribe to receive our VRA podcasts every day at the market close. You can sign up@vraletter.com comma. Click the podcast link at the top and we’d love to have you with us. Thanks again for tuning in. Until next time, we’ll see you back here tomorrow for the close.