In today's episode, Tyler breaks down the historic comeback from correction territory that just took place in the Nasdaq, and despite today's sideways action, the VRA continues to see this market heading higher. We'll also cover the surprising economic news about over reported job growth, what it means for the market, and the Fed's upcoming decisions on interest rates. Tune into today's podcast to learn more.

Dont look back because the market is closed. Good Tuesday afternoon, everyone. Tyler Herriage here with you for Todays VRA investing podcast. Hope you all had a great day out there today. And after what has been a fantastic eight day run here for the S & P 500 and for the Nasdaq, we got a little bit of a breather from our market action today. No concerns for us here at the VRA. If you’ve been with us here listening on the podcast or a VRA member for some time, you know that we look at days like today as an opportunity here. And what has been, like I said, a very good run over the last eight days here.

And check this out. It’s one of the best runs since a correction like we’ve seen in this market for, in more than a decade. Now, we would argue that some of the terms like correction, pullback, bear market have kind of arbitrary labels to them. You know, it’s just by and large, these rules go, and it’s, if the market pulls back 10%, it’s a correction, 20%, it’s a bear market. Those words don’t tell you any more than that. We’ve had plenty of scenarios where we’ve pulled back 21, 20 and a half percent. Right. People were screaming from the rooftops, oh, it’s a bear market.

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Get out of this market. And that was the moment that marked the lows. Same thing with a correction. We’ve had corrections that have gone to 13, 14%, and everyone is, you know, the sky is falling, we’re going down to more than 20%. Get out of this market while you can. And that marks the lows. So again, those labels don’t tell you anything more than the price decline. Right.

They sound scary. That is by design, by the way, to keep people fearful and out of this market. It’s part of the psyop of negativity that we talk so much about here, but we like going the optimistic route. And so far, check this out. The Nasdaq did go from its all time highs in July down to 10% at the beginning of August and already has rallied back more than 10%. So it’s already officially out of correction territory. Seems like as soon as it started, it was already over, and it is the fastest that the market, specifically the Nasdaq, has gone from correction territory to out of it since 2011. And what comes next for the market, as we would all agree, that’s what really matters here.

Historically, it bodes very well for the market. Twelve months later, the Nasdaq is higher 86% of the time, with average gains of 23.6%. Given that we are in a still young new bull market, we haven’t even wrapped up year two here, we think the gains for this market could potentially be even better than that, and specifically for tech and the semis and our other favorite sectors as well, which I’ll cover more on here today. But first, we got some surprise, maybe not so surprising, economic news reported by Bloomberg. Zero hedge put this out yesterday, though, about job creation here in the US. Now, if you’re a regular listener, you know I’ve broken down and so has KipP, these job numbers multiple times, and this administration’s willingness to leak this data almost as if they know what’s coming next. Because the market has rallied on days where we’ve gotten Goldilocks numbers and the market has sold off on less than favorable jobs data in advance of the data being let out, right? So we’ve said that for some time that this administration has likely been the very worst at leaking this data before it comes out, and we’ve seen it in the market reaction time and time again. But the news today from the Bureau of Labor Statistics, the BLS, that they have vastly over reported us job growth.

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Now, we’ve said this a ton, but the numbers are astounding. Bloomberg quoted as up to a million us jobs just vanishing. Those are their words. The largest downward revision in over 15 years could be one of the largest ones ever, as the again, the million jobs number might be an understatement. Check this out. The expected revisions for 2023 are that they were overstated job creation. Washington overstated by 735,000 jobs. The revisions just so far in 2024, we’ve only gotten seven months of data in 2024.

We’ve yet to get August data right? We’ll get that in September. But the revision so far, the estimates are for between 600,001 million jobs. So if you go to the high end of that, you’re looking at could be close to nearly 2 million jobs just vanished, fabricated out of thin air. Now, before I go any further, because I know this sounds extremely concerning, we are talking about nearly 2 million jobs, right, that are potentially fraudulent. If any one of us in our jobs missed on a number by this much, do you think you’d still have a job? Probably not. But yet these people at the BLS are likely getting raises right now because all of their buddies who they leaked the information to are making a killing right now. So again, I know this sounds extremely concerning, but remember, this is over the course of a year. So we still do have growth.

This isn’t necessarily a call for a recession here or, or that something terrible has happened in the us economy. It does mean, though, that growth has been overstated. So for an average, we were looking at about, over the last 18 months or so, average 240,000 jobs per month created based off the fraudulent BLS data. So we’re looking at a more realistic number of 160 to 190,000 jobs created per month. So still growth, and that’s what I want to focus on here, is that these still aren’t recessionary numbers. Nothing to freak out about, nothing to sell the farm about here, or in that case, selling all of your stocks. But if you’ve been tuning in with us here, you know that this isn’t a huge shock. These job numbers have been incredibly overstated by, again, simple manipulation here.

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There’s a few different ways they do it. I won’t get into all of them here. One example, though, would be that if someone were to lose their job and then have to get two part time jobs in order to make ends meet, they would count that as at least a net, one job created because you lost one job and got two more. So you’re on the count there for one. And they usually keep the job loss data in a separate category. So you could see ways that they would count that as a net, two jobs created somehow. Right. There’s also these very strange birth death adjustments, seasonality adjustments similar to what they do for inflation.

Essentially a black box that can be looked at as a placeholder for just saying we manipulated this data, right? That’s what they’re doing. Kip said this right before the cast in our end of day calls. I thought it was so good. You know, figures don’t lie, but liars figure. And that’s exactly what we’re looking at here. So the key point, the take home point from what this means, as Bloomberg made this point as well, that this is just another example that the Fed is behind the curve here on lowering interest rates. Now, we’ve said that, welcome Bloomberg, to, to the camp here. But this should be no surprise if you’re a regular listener here, that the Fed has been behind the eight ball for some time here, overly restrictive, and that their next meeting in September should be a 50 basis point cut.

We’ll see if that’s what they do. I thought that after this kind of news broke today, because it was getting some pretty good traction actually, that we might see some adjustment in the CME group’s Fed watch tool, where just a week ago it was the majority view that we would get 50 basis points worth of cuts, now firmly in the favor of just a 25 basis point cut. We think that, you know, not necessarily that would be a mistake, but it would be doing too little and too late. And the Fed needs to really get ahead of this. But I overall, no concerns for us here. We just think that this leads to the Fed cutting rates potentially more quickly or potentially for longer. You know, Jay Powell will probably make the same mistake he makes every single time, and it’s being too late to the party. We think back to the 2018 December from hell.

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There were hiking rates for too long and strangely, into the month of December, which is a notorious illiquid time for the market. So, oh, shocker that it disrupted market action then in 2020 when they cut rates for Covid, you know, not a terrible reaction there. So you can still make an argument that they might have done it a little bit earlier. Not a whole lot of problems with that one. After that, though, to gaslight the american public over and over and over again about inflation, right. We all remember was happening during 2021 where people were starting to say, oh, well, we just added 40% to our money supply. Inflation is going to start coming. We should start tightening now, Fed.

And the Fed said, oh, the inflation isn’t a problem. You know, we don’t see that at all in our data showing up. And then it was, okay, we do see inflation showing up, but we’ve got the tools at our disposal handle it, so don’t worry about it. And then all of a sudden, it was an overreaction. Inflation is going to destroy the american economy. We’ve got to cut rates, got to cut rates, got to cut rates and quickly. And in a large way as well. One of the fastest rate hiking cycles going all the way back to Paul Volcker there.

So the fastest of any modern Fed. Right. They just completely whiffed on the whole thing, calling it transitory before downplaying it. You know, this is what we’ve come to expect from the Fed. They’re late to the party now once again looking like they’re going to be late to the party. Another major policy mistake here coming from Jake Powell. But what does that mean for us going forward? Well, it means that the Fed is going to start cutting rates and quickly, and the next step after that is restarting the money printing machine. And now you will be in the same boat and saying that why are we adding more money right to the money supply here in the US? When we do have an inflation problem, well, again, we’re in the same boat there.

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But regardless of how you feel about it, it means that more devaluation of the us dollar is coming. That doesn’t always necessarily mean inflation, but that your dollar can buy less, which essentially can be, is inflation. Right. But I mean, for different assets has different ramifications. So what do you do in that scenario? The same thing we’ve been recommending since we wrote our book, the big bribe now, almost two years ago, since it came out now. And that is that you have to own hard assets. This isn’t the time to be storing dollars in your mattress because those dollars are being devalued by at least 3% every single year. Right.

So in order to fight against that, you have to own stocks, you have to own real estate, you have to own precious metals. I just saw this chart this morning. I probably shouldn’t be referencing it if I don’t have it in front of me, but I’m going to do my best anyway. That if you look at the S P’s valuation, if you put it in terms of gold, we’re back to where we were in like 1971 with gold at an all time high here, right? So most of the value created in stocks has actually been just a devaluation of your dollar. It’s just worth less in dollar terms. Right. So really interesting comparison there. If I can find that chart, I’ll be sure to share it again here as well.

So going forward, everyone will be looking at the Fed minutes tomorrow coming out. You know, not a whole lot that we really expect to see from this, but what will be interesting and what people will be watching for is the question that Jay Powell was asked at his most recent FOMC meeting is how many Fed members wanted to cut in August. So we’ll be able to see that from the Fed’s dot plot. That will be interesting to see. We’ll be reporting a little bit on it here as well. Then, of course, we’ll get Jay Powell’s Jackson hole speech on Friday as well, where we do expect him to be dovish there. All right, let’s take a look now at our market action on the day today. You know, we did finish negative across the board, but not a terrible day out there.

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The rough 2000 did lead the way lower, down 1.17% to 21 42. The rest of our major indexes held up much better today. The Nasdaq down just over three tenths of 1% to 17,816. Next up, the s and P 500 down two tenths of 1% to 5597. Now, I know that we just talked about this correction in the market. Would it surprise you to know that the S and P 500 is now just about 72 points away from its all time high high? I think that would surprise a lot of people. The all time high, 5669. We closed today, 5597.

We think we are back on the way to all time highs. We’re right in the range right now. Next up, the Dow down 0.15%. So leading the way today to 40,834. Next up, here are internals on the day today. Know, not great, are certainly not good numbers here, but not terrible either. We’ve had a few bright spots. We did have declining stocks beating out advancing stocks for both the NYSE and the Nasdaq.

Less than two to one negative, though on the day. 52 week highs and lows were actually our bright spot on the day today. We haven’t had a whole lot of sessions like that, but coming in positive, nicely positive for both the NYSE and the Nasdaq. And volume, which actually Nasdaq volume. Just refreshed to negative at the close today after the final settlements of trades, we were still positive at about 259, but we just finished slightly negative there. Again, no concerns for us, but we were over two to one negative on the NYSE. Again, after the incredible move, we’ve had a to the upside, you know, not a big surprise here, to get a little bit of a pause. We’ve already begun to hit overbought levels on our short term vRa momentum oscillators, but any pullbacks that we do see continue to need to be bought.

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Next up, looking at our sectors on the day, as Kip and I have both talked about here, we’ve got a lot of sectors banging on the doors of either 52 week highs or all time highs. And consumer staples and. And healthcare led the way today. Continue to hit all time highs. Now, they’re not our favorite sectors, but new highs beget new highs. So, hey, we’ll take it. After that, we had real estate and communication services where our four sectors finishing positive on the day. We did have seven sectors finishing negative.

To the downside, we’re led by energy, followed there by materials, financials and tech. Those three, though just fractionally lower on the day today. Finally here for today, our bra commodity watch gold continues to rally, hitting another all time high today at $2,570 an ounce. Slightly off of that level now, but still up over four tenths of 1% to $2,552 an ounce. And I’ll also point out GDX, the gold mining ETF, continues to rally with the precious metal as well. We look at that as very bullish. And GDX just hit a 52 week high here today. This is a group, both gold and the miners that we see is having a long way to run here.

Next up, silver, up 0.58% on the day to $29.47 an ounce. Copper now down on the day, six cents of one percent to four dollars. Fifteen cents a pound. And oil now down three quarters of 1% to $73.11 a barrel. And finally here for today, bitcoin tried to show some life, trying to get above and stay above 60,000 here today. Couldn’t quite do it now. Still up one 10th of 1% to 59,158 of bitcoin. Again, another group remain very bullish on long term.

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Folks, that is all 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 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.