In today’s episode, Kip Herriage dives into a range of hot topics shaping the markets, including the latest election results and what they really mean, the unstoppable strength in semiconductor stocks, and the powerful trends revealed by technical analysis. Kip Herriage also breaks down how prediction markets are influencing investor sentiment and gives his bullish outlook on Tesla—explaining why it’s the must-own stock for the innovation revolution.

Don’t look back the market is closed. Good Wednesday afternoon everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Got several things to talk about today. I think really adventures and also very important.

Going to talk a little bit about the election results from last night. What they really were instead of what I think people think that they are talking about today. The semis leading today again the semis have been non stop leading. I shared that chart this morning. Our favorite, my favorite relative strength chart since the birth of quantitative easy. This is so important and I’ll tell you, it’s important to everybody on Wall street that does any degree of technical analysis. But you barely hear anyone talk about this. And I think it’s a secret weapon.

You know, it’s like technical analysis. There’s a couple of these stochastics is one, you know, one of our momentum oscillators, once stochastic get to extreme robot levels, that’s just a sign that the market’s tired, you know. And the same thing on the reverse when it’s extreme oversold. That’s the very, it’s so easy to follow that, right? That’s the top, that really the top momentum oscillator right there in your, in your charting system. That’s one thing that everybody can follow basic if you’re an index, you’re looking at a stock etc and the other, this is a little bit of a deeper dive and it’s so important is the relative strength chart which we do a lot of work in those here. Rel street chart of the semis to the s and P500. And again since quantitative easing started in 2008, 2009, this is the one chart that’s mattered the most for market timing, for telling the what is the direction of the market. We going higher, are we going lower? Where’s the strength lie? How should we be.

Should be in the market, out of the market, should be short, should be long. The semi 500. I shared that chart this morning in our, in our letter. And you see right there, I mean this is, this is a chart that you look at this chart on any stock and you go, yeah, okay, that’s a buy. You buy the pullback. It’s in a tight channel. It keeps going higher. It’s, it’s led the market higher from the exact lows of April, the seventh of Trump’s tariff insanity.

[00:02:00]:
That’s been the bottom, that was the bottom of the market. And it’s confirmed by this relative stream chart of the semi tens we have hundred again leading, right, semis leading. Going to be in the market semisly Tech. Tech leads the broad market. Semis today up 1.8%. Had been up as much as 3%. We did see a little bit of a sell off into the close, but it was a good bounce back day. It was definitely a solid bounce back day today in the market.

After yesterday’s topsy turvy action, there’s some chinks in the armor of this market. Talked about that a little bit today. I’ll get in that in, in a moment as well. Because look, the obvious point, and this is what any investors that’s done this for any length of time at all knows, not that it makes it any easier to deal with it, okay. Because it is very difficult to separate emotions from money. Especially if you pay attention, if you, if you’re paying attention to your portfolio on a daily basis or certainly, you know, if you’re, if you’re, if you’re, you know, right in front of your screen throughout the day, then, then you know exactly what I’m talking about. It is, I’ve done this 40 years. It’s very, very hard to separate emotions from money.

But what you have to realize at the same time is this is not a sprint. This is a, I hate to even say it’s a marathon because I don’t think that’s quite accurate, but it’s not a sprint. You know, this is like the 400 versus running the 100 and you just gotta have, you gotta deal really a thick skin and a patience and to understand that, you know, it’s not where we are at any point in the year, it’s where we wind up at the end of the year. And if each quarter, of course that’s another good checkpoint, but that keeps, really kind of helps me keep my sanity, is just to take a step back and go, okay, you know what? Yesterday sucked. Yesterday was not a good day. But we’re not in this for a day. And this is why I just encourage so many people to maybe, maybe listen to me on this point. Because day trading, short term trading is so incredibly difficult.

Again, talk about separating emotion from money there. I know maybe 10 traders in my career that have been able to make that happen. Now if you’re a professional day trader, you know, you’re trading for quarter of a point, half a point. Really. You have really good discipline and tight limits. Totally different story, right? Those guys are machines. And of course now most of them are using machines to make that happen. Even that’s not infallible but otherwise it’s very difficult to trade on a very tight daily basis and to have success.

This, this market is just, it’s, the volatility is too high, it is controlled by machines and it makes it very difficult. At least, at least, at least for me. I tried that a long time ago and I found out within about six months that that is not the road that I was meant to go down. Tesla today up 4% on the day. We’ll get that in a moment as well. Poly Market now is out there. Updated odds of must compensation plan passing is at 97%. These prediction markets are just unbelievable.

[00:04:51]:
They’re so accurate. And what makes it. We first saw these prediction markets but before the presidential election last year, this is when we really started paying attention to it. Polymarket Kaushi, there’s a lot of them springing up now. This is real money being wagered, being predicted on these sites. Right? And it’s legal in all 50 states now polymarket, at least as of last week you can’t legally, in the US a lot of people are doing it through VPNs but you can’t legally place these prediction wagers there. Now on Cauchy you can. I’ve got a cash account, I’m toying with it.

And again these prediction markets have just a bit unbelievably accurate and that’s because we don’t have some anonymous unknown source taking a poll, calling people supposedly. Right. And that’s why these pollsters are just out of business. Because the real money being placed, that’s where you’re going to find the truth. Then again, Polymarket now has the odds of Musk compensation plan Pennsylvania passing tomorrow at 97%. That’s a, that’s the highest level that certainly I’ve seen it at. It was about 65% a month and a half ago and it’s been a lot of energy dedicated a lot of it by social media by the way. I think it’s just incredible.

You know, every now and then you get a glimpse of the goodness from social media and you know, we talked about Charles Schwab a couple days ago, you know, major investors in swab, meaning investors that had their money with swab, found out that SWAB was planning on voting against as a passive investor, which by the way that’s a whole other ballgame that needs to be outlawed. If you don’t own the shares directly, why are you allowed to vote them? Right. Unless someone’s giving you explicit proxy to vote their shares then you shouldn’t be allowed to. And I think that’s something that’s going to be like these groups, iss, I think these groups are, I think they’re, they’re finally going to meet their maker and going to go bye bye because it should not be legal. They only sprung up during the Obama and Biden time frame because they wanted to be able to pressure corporate America through these passive voting. It’s a scam. And anyway, it’s just great to see investors in Charles Schwab that have their money with Swab stand up and say, you know, it’s all over social media. Hey Swab, you’re free to vote.

I guess you’re free to vote however you want to. But if you, if you vote this proxy for the shares you control against Musk, his compensation plan, I’m taking my money elsewhere. Enough people did it that Schwab came out, I believe it was in 24, at least 36 hours and said they are voting, they’re voting for, in favor of Musk’s compensation plan. I think that happened a lot of places. And again, that’s fantastic that, that kind of pressure. Again, social media, you know, I got to give, got to give it to them. It’s certainly got its negatives but this was a, this was a real example of something good coming from it and that’s the way it should work, by the way. But again, Tesla up big today, up almost 4% on the day, putting it up 17 bucks.

This year happened as high as 466, closed at 462 on the day. Again tomorrow at 3 o’ clock Eastern is when the shareholder vote takes place. We should find out the results of the comp plan very soon. But Tesla’s on its way. It’s essentially already broken out. The 52 week high is 488. That’s the all time high from last December. And you know it’s going to blow through that.

I, I, I say it like I know it for sure. I don’t of course, but that’s, that’s our call, is that it’s been a call for a long time. It’s going past 500, well past that. This is the beginning of what they’re calling, I think very accurately. So Tesla as the real world leader in AI, certainly for autonomous driving, we, I can tell you that that is absolutely the case. Personal experience. It is unbelievable how much this car drives me around, how perfect it does it. And so the Robotaxi Cyber Cab as they call it, is going to be all over the country next year and then, look out, Uber, look out, Lyft.

You know, certainly, Waymo, these companies are in serious trouble. And I think they. If I were them, I would strike a deal with Tesla. I’d do it as soon as possible. I’d do a licensing deal. Because otherwise, why would you. Now, there’ll be some people that don’t feel comfortable at first letting a car without a driver and no steering wheel. No, I mean, no pedal, right? No, no.

[00:09:18]:
No brake in the car. There’ll be people that are nervous about that. Rightly so. That’s how a lot of people felt when Uber first came out. Like, let a stranger drive me. I don’t know who these people are. Well, we did it with Taxi, so that was a little easier to overcome that fear. It’ll take a while for people to get comfortable with the cyber cab driving around, but when people start saying, oh, wait a minute, you’re telling me that I could have made, I could have taken the same trip that cost me, say, 40 bucks, I could have done it for $22 or 18.

I mean, that’s the kind of cost savings we’re talking about here. Because again, there is. And there is no tip. There’s no company overhead to have to pay that an Uber or a Lyft has. So I think you can see where I’m going with this. It won’t be long until cyber cabs take over the entire. That’s global, folks. It’s going to happen everywhere.

And then, of course, robotics with Optimus. Now, AI. The AI story for Tesla is probably, probably the new chip they’re working on. Tyler, when he’s doing the podcast on Friday this week, I’ll have him get into that because he’s more the technical guy than I am. Again, he’s a millennial, and this is. They’re born into technology. He gets to that DNA level and I’ll have him do that. I ask him to do that on Friday.

Talk about the new. The new Tesla chip, because apparently it’s just going to be, I mean, unbelievable. And again, that’s very few people talking about that. Tesla energy, very few people talking about that. Again, I’ve said this 100 times since the last earnings call, and I’ll say it again, as Musk said on the call, you know, you’re investing in a lot of startups in Tesla that we’ve always been a startup, and then we start other companies inside of Tesla. So there are at least 10 divisions in Tesla that you own as an investor in Tesla and I don’t think that’s going to change. I think it’s only going to continue to grow. So again we like the stock.

[00:11:11]:
As you know, if you’ve been with this for a while, it’s the one stock we say must be owned for the innovation revolution and very excited about where that’s going. Again, price Target is a 2000 by 2028. That means by 2028. That means at the end of 2027. So it’s got a lot of room to run the next two years. We think it’s going to get there. What else today? Tyler just told me the transports today hit their highest level since August. That’s good to see transports leading again.

They had been very weak. Now they’re starting to really get some gas here. That’s good to see. We’re seeing good rotational action in the market. That’ again we saw it today. This is the sign of a great bull market and that’s what this is. Of course the, the bears that are jumping out of the woodwork now. I just.

It happens that every turn down we have again we’re 2% away from all time highs and the fear and green index yesterday hit 21 which is extreme fear. We’ll get the AAII investor sentiment survey tonight. I think that comes at around 10 o’ clock tonight. And Tyler and I’ve already voted for the week. Of course we’re bullish but I think with the downturn we had this week yesterday, meaning my guess is that AI investor sentiment survey came in again pretty bearish as it has been now for some time. And from again market psychology point of view, investment psychology point of view, this is a tell. This is a tell. When you see this kind of weak investor sentiment when the markets are essentially at all time highs, that is just the opposite of a sign of a market top.

[00:12:42]:
It’s really more indicative of market that’s nearest bottom than its top. And it’s a very important sign, something we pay a lot of attention to here. So when you see these I want to say Christian Bale but instead I’ll say say Michael Burry. If you’ve saw the movie the Big Short, of course Christian Bell played Michael Burry in that movie. You know he came out was it yesterday I think and our day before filed his 13D filing and said that he was short, you know, two positions short by puts, you know, not, not actually short but via puts, Nvidia and Palantir. And of course you know the market was down yesterday that was part of the reason people said, oh, this big guy, the guy predicted the big, you know, predicted the housing crash and now he’s, he’s negative on the market. Of course, you know, you do a little digging, you find out that this last decade has been absolutely brutal to Michael Mike Burry. He’s not had a good run at all.

So. But a lot of people come out and that’s what keeps happening here. You know, at the first sign of any trouble, the internals start to get a little weak. We have a couple bad days, they just come out of the woodwork. And I just don’t think that’s normal. But what I do know is when we start to see these same people, and trust me on this, it will happen. These people, these perma bears, these fear mongers will wind up, mark my word on this, we’ll reach a point in this bull market. Now, at this stage, it may take toward 2027 for that to happen.

It probably will. But we’ll reach a stage in this bull market which is generational, but we’ll reach a stage when all of these fear mongers and perma bears are saying, buy the dip. It’ll happen. They’ll go bullish and they’ll say, buy the dip. And that’s when we’ll be paying attention and say, you know what, that’s, that’s, we’re looking to take some money off the table. You know, it’s not going to be the exact sign of a top, but it’ll be the sign, a sign that the market’s gotten real frothy and we’re just not there yet. We’re just not there yet. No question.

People have gotten more bullish. Like, I don’t, I don’t, I don’t, I don’t deny that. That’s what happens in big bull markets. People wind up getting more bullish, but there’s still so much fear out there. And we see that, you know, money market accounts is 7, $7 trillion. We see that every time we have a dip. And you see, you know, we see a lot of people head for the exit, right? But we talk about it all the time. This is the Trump is three big reasons, folks, and they haven’t changed.

Three big reasons. We’ve been bullish now since we wrote the Big Bribe In August of 2022, excuse me, we call the bottom and the bear market October 13, 2022, and that is the Trump economic miracle. 2.2.0, if you will, the innovation revolution and this ocean of liquidity and they all work very well together. You know, it’s important. What’s coming up with the Supreme Court case. I have a little bit more information on that because of course that took place today. The hearing on this at the Supreme Court took place today. As I understand it, it’s a one day thing, but I’ve not had a chance to pay a lot of attention to it throughout the day.

[00:15:43]:
I know Scott Besson said, you know, he’s there, Treasury Secretary, he said he was there and he was very pleased with how it went. The prediction markets, in case you’re wondering, are not that positive. They’re at like 40% poly markets. I think I saw polymarkets at 40%. That Trump’s tariffs are going to hold up. That’s a little, it’s a little scary because Trump’s, of course, this is his signature economic policy and he’s put so much energy behind it for good reason. You know, it’s, I know, I know that there are people that feel just the opposite that hate these tariffs, but we’ve been taking advantage of on trade policy for so very long. I’m just glad we have somebody in there to shake it up and to try something different.

And to the end result, folks, you’re going to see this next year. This, this will be, this will be rock hard evidence next year that this tariff policy is working as, as manufacturing returns in the United States. And it’s going to be massive. We’re already seeing facilities being built, not just AI which is happening everyone, not just chips. That’s happening everywhere but throughout the country. True manufacturing, these are high paying jobs. And I think that’s the key point with AI. You know, I think the, the negative feedback that I, that we hear the most, certainly me is that, okay Kip, yeah, things look good now.

We see all this AI revenue and commitments being made. That all sounds good. Tech earnings are exploding higher. Of course they are. That’s all sounds very good. But what are we going to do when all these jobs disappear? That’s, you know, you saw the Amazon announcement. Layoffs. IBM just announced layoffs.

What are we going to do when all these jobs start to disappear? And I just have to say that that’s just not history doesn’t. History tells us something very different about that issue. And you know, it’s not easy to explain how we’re going to replace the jobs that are going to be lost, except I can just tell you that they are going to be replaced because there’s never been a time that in US or global history, that technological advancement has resulted in fewer jobs. Somehow it always results in more jobs. And so I think that, I think if I had to say one reason for that in this case, it’s going to be that we’re going to have new industries that right. Today we don’t even know of. Right. That are going to come up.

And I’ll tell you, one of those that’s really exciting is space. Space exploration. Space. Space tourism. Space. We’re going to be doing things on the moon and probably elsewhere, but we’re building. You can all sense that, right? We’re building toward this. It’s going to be a massive job creator.

[00:18:10]:
It already is. And of course, the AI boom is creating a lot of jobs as well right now, mostly manufacturing. But, but, but those jobs are going to come as well. And I don’t even know exactly how to explain how that’s going to happen right now, except the history tells us and it’s crystal clear on this point that it always does. My favorite story about this, forgive me if you’ve heard me say it before, but it’s the New York Times cover back in the day when Henry Ford was starting Ford and opening his first production, production line and New York Times had a story about this is devastation for the horse and buggy industry. How are we going to replace all of those jobs? And that’s, that was the fear. You know, it’s a little different now, but not really, is it? So again, we are extremely bullish on the, the, the growth, the coming growth of the U.S. economy.

But Atlanta Fed just came out with their GDP now estimate. It’s up to 4%. Right. That’s the highest that it’s been under Trump, certainly under Biden. It never got this high. And again, our forecast has been and remains that GDP growth will surpass 5% no later than the end of the second quarter next year. And frankly, if it’s, I think it’ll be much center, I really do. We’re headed in that direction.

Manufacturing again, coming back and just a solid economic growth. Animal spirits returning. But as far as the election last night, let’s get to that now and then we’ll talk about some of the chinks in the armor. I want to spend a minute on this. I wrote it up this morning because there’s so much negativity in Republican circles about this. I’ve just heard from so many people like, oh my God, this is just horrible what happened last night. Is it, is it, is it really horrible? Because don’t we already know that in these states, New York, in New York City in this case, and Virginia and New Jersey, you know, they don’t require proof of citizenship. They don’t require an id.

Virginia accepts some form of id. You have to sign, you know, a document saying it’s true. But in New York City, you don’t have to have anything to vote. You just have to, I think, sign something and make a statement. And I know it’s the same thing in New Jersey. I do not trust these elections. I don’t trust any election in a blue state. And the thing that drives me crazy, and I think I speak for a lot of people on this, I’m sure most of you listening today, is that Republicans aren’t.

[00:20:33]:
They have stopped talking about these rigged elections. They’ve stopped talking about the need for paper ballots. Now, I do know, but behind the scenes that work is progressing in this area. But this has got to be front burner. This has got to be an issue they’re talking about all the time. And they should, they should point it out when elections last night in blue states happen where Republicans have almost no shot of winning. And this is, this is the other point that I’ll make and when I say it’s not, it’s not really a bad thing, is that, and I’ve said this before because the minute that I saw this guy Mamdani and I saw, I saw, you know, the, the, the odds coming in, he was favored to win. And everybody’s so up in arms about that.

Well, listen, I don’t think it’s, I don’t think it’s any shock that we could see that New York City was already heading in this direction. It’s like 30, what is it, 34, 38% white now. It’s like a foreign country. And that’s the point that Wayne Rood made. As a matter of fact, I’ll, I’ll read his post in a minute. I thought it was excellent last night and. But Mamdani is going to be the face of the midterms. I don’t hear many people saying this.

And to me it’s like a crystal clear, you know, like a clarion call that this is the main point to remember for the midterms, which are far more important than the election that took place last night. Yesterday for the midterms, you know, it’s all about turnout. And that’s why in an off year, in other words, there’s no president on the ballot, which of course will be the case next year. This is why historically, the party in power, the party that won the presidency tends to not do well in the midterms. Well, there’s now a new source of motivation for Republican and independent voters, and I would imagine also for a lot of Democrat voters that just don’t want the New York insanity in the face of Mondavi to be anywhere near their own backyard. So I predict that the turnout next year, because again, he will be everywhere. I think that the turnout next year is going to be extraordinarily good. Hopefully by then they’ll have made some progress on, if not paper ballots, at least tightening up the system so that Republicans, and again, I hate to even say Republicans, it’s really just patriots, people that just love our country, come out in droves to vote for Republicans to make sure this insanity in New York City doesn’t come their way.

Mamdani’s mandates, and I’m sure you’ve seen this, but they’re insane. He wants to freeze rents, right? He wants universal child care and he wants free buses for people. Now, that may all sound good to somebody that goes, you know what? That kind of makes sense. Wouldn’t it be fair to work that out? You know, there’s always a flip side of that coin. And in this case, I’m just telling you, this is going to be exceptionally hard to pull off. First, these are not New York City issues. These are statewide issues. This had to be approved at the state level, which means money’s got.

A budget’s got to be approval, right? They got to get budget approvals at the state level. This stuff’s going to be very expensive and even illegal, especially unconstitutional when it comes to freezing rents. And that. That is a constitutional issue that is simply not going to pass. So, you know, the guy’s running on things that he can’t deliver. I don’t think it’s going to be made clear pretty soon to him. I’m sure he’ll get some crazy stuff done. But I think it’s the crime rate increases in New York, and that’s almost certainly going to happen as we see an exodus from New York City, the number of businesses, individuals that finally just say, I can’t take anymore.

I’m not going to put my family or my company, my employees at risk in this kind of a deal. And they flee. Then a lot of them will come to Florida, a lot of them come to Texas. We don’t really look forward to that here in Texas. I guess our real estate prices, home prices will go up. That will certainly happen. That’s been happening but you know, we really, we really don’t want the, the carpetbaggers in our, in our southern states for, because that’s happening already. If you’ve seen what’s taking place in Austin from all the folks that have moved there from like California, you know what I’m talking about, they’re bringing some of the insanity with them.

But right now, you know, Texas remains a red state. Certainly Florida is very, very red. We got to get rid of Governor Abbott though. He’s just got to go. He’s a, he’s RINO all the way through. This state has gotten incredibly liberal. Democrats are running the state, if you can believe this. And you know, that’s, that is concern long term.

But again, in the meantime, I think the midterms are going to come out very well if they play their cards right. And I think Mondomini again is going to be the face of the election. Here’s Wayne’s post from last night. I want to read this to you. I read it and agree with every word that he said. Wayne said, I predicted for weeks we would lose every race tonight because blue states are rigged. The people are brainwashed, self hating morons and dependent welfare queens. Wayne never mentions his words, does he? And the illegals are voting by millions.

[00:25:26]:
Yes, they are. With mail in ballots. We cannot win blue state elections until stupid, clueless, cowardly GOP Congress passes voter ID and proof of citizenship for federal elections. Period. We were never going to win in Virginia or New Jersey and Mondani was always going to win in New York City because it’s now a foreign country. How true is that? GOP Congress is a bunch of rhino losers who do nothing. You know, we’re going to have Wayne on a podcast here pretty soon to talk about his new hundred million dollar lawsuit against Stanford University, Twitter, formerly of X and a lot of other defendants. He’s now filed this.

We’re going to have him on as soon as we can free up his schedule to talk about this. It’s very interesting what’s happening behind the scenes because yeah, that means there could be opportunity for us as well. If you’ve been harmed by the censored, you’ve been banned, you’ve been debanked. Right. I think a lot of us have. That’s happened too. Certainly happened to me on all three cases. And so we’ll talk about that.

But one thing about Wayne I have to really give him credit for, you know, Wayne is as big a Trump fan as you’ll find. That’s no secret. If you Know, Wayne Root, he’s interviewed him something like 17 times, which no one’s come close to that in that format. Trump may have been on Fox more, but you know what I mean, Independent journalist, it’s wayne. I think 17 times is the number. And what I really love about Wayne is this guy is true blue. He’s going to tell you what he thinks and he doesn’t pull any punches. Wayne wrote, in addition to the post that disrupted him last night, calling Congress a bunch of rhino losers who do nothing.

Spot on. I think that, you know, for Wayne to be as close with he is to Trump, I mean, they’re obviously friends. They speak on a regular basis now, which is kind of cool, knowing we’re once one step removed from the President. I can tell you that there have been a couple of issues that I’ve brought to Wayne that I thought the President should know about, and Wayne’s taking them to him. Now, whether or not my reaching out to Wayne had an impact, both of those issues went, wound up going our way. I just know that we at least have a guy that doesn’t mind and actually is cool with, you know, passing on our ideas to the President. But, you know, when it comes to the job, right, and when it comes to Trump’s handling of the pandemic, Wayne is the guy, as close as they are, and he knows this could damage not just their, their, their business relationship, their friendship, his ability to even have an open door policy of the president, to be able to call him and have President Trump to speak, to answer the phone. But this could really damage all of that.

Wayne’s access, right? It could just shut the door. But Wayne has never hesitated. He stood strong. He talks about it almost on a daily basis now. And I just, I love the guy for it. You know, he’s got a backbone made of steel and he is a, he’s a, he’s just, I will tell you, he is a great friend. And we, you know, we go back about 23 years now and, you know, when we have him on the podcast, I’ll tell the story of how Wayne and I first met because I think about it often with Wayne, it’s a great story and it’s just a happenstance story. It tells you the universe does work in mysterious ways and things happen as they’re supposed to, and they certainly did in that case.

[00:28:47]:
All right, let’s see here. Yeah, semis again, leading today up just over 2% right now. Let’s talk a little bit today about some of the chinks in the armor. I covered this a bit yesterday because there are some change. But remember, bull markets climb a wall of worry. Also remember, don’t fight the tape, don’t fight the Fed. Also remember as I talk about these that we’re in now the best month of the year for this 500. We’re also in the best six months of the year for the SP 500.

Look, we’ve come a long way in a short period of time. SP 500 as of two days ago was 13% above, above the 200 day moving average. That is extended, that rubber band is stretched. And so these shakeouts are just normal. They happen and they wring out the excesses, they remove the froth, the we can sell. Right. And it serves an obvious point in every bull market. You’re going to have these, it’s just the way that it is.

But there are some chinks. Trump’s tariff policy, if that’s overturned Escotus by the way, it’s not going to happen immediately. I’ve heard both, I’ve heard this in both ways, but I don’t, I’ve heard no one this credible that say this ruling is going to come before at least at the earliest, early 2026 and probably February or March. This is the way the Supreme Court works normally in these fall cases. The, the ruling wouldn’t come until June of the following year. But this is probably going to be expedited because the importance of it. But again, I just, I haven’t heard anyone say, hey, this could come down pike at any time. Yeah, this could be in a couple weeks.

I don’t think that’s the case. If you hear different on that, if you know different, let us know. But I don’t think it’s a short term concern. We have but also tell you, and I’ve done a little work on this, that Team Trump has a number of backup plans. There are so many different ways they could go with this. It’d be a little convoluted, certainly be complicated. I’m not saying it won’t hit the market short term, but the markets are smarter than all of us. The markets are smarter than all of us.

And the markets build this in they, they, they are, you know, it’s a six month discounting mechanism really is what it is. And so I think by the time the ruling comes, I’ll tell you the truth, I think the market may get hit on the news and that’s going to be a buy the dip opportunity because the damage will have already been done. And so that’s the way we’re going to play it here. Look, I’ve got a lot of experience in this area. I used to see bad news and, oh, my God, I gotta sell. Sell positions, buy puts. I’m like, I bought, I bought puts at the very bottom of this, of the short term dip. And now the market just reversed it.

Dowser 500 points from where? What was I thinking? Right, again. Emotion. Getting the better of your investing sanity when we’ve all done it. I’m not ashamed to admit that I’ve done it a lot, but I try not to do it anymore because the markets build this in. So I don’t, I don’t think, I really don’t think that this tariff thing is going to be a big deal. I think if it’s not, you know, if SCOTUS doesn’t vote in favor of this, I think that the backup plans in place are going to mitigate most, if not all of the damage. His team is ready for it. There, There are, I’ll probably write this up tomorrow.

There are a lot of things built into the law that Trump can already use to replace a lot of his tariff policy. So, again, I think it’d be complicated, but I think the Trump administration is ready to deal with it, and I think they have been for some time. This is not a huge surprise to them. Right. Or you’d just be like, Biden, Supreme Court rules. You just ignore it. You know, Biden did that more than once. Remember the student loan thing? Supreme Court ruled it wasn’t legal.

He just kept doing it. Just add another little, oh, just change the spelling of this word. And we’ll do it that way. And now it’s going to have the policy, the, the trip to the Supreme Court is going to have to restart. He just ignored the Supreme Court. I don’t expect Trump will do that, but again, there’s a lot of workarounds there. And listen, the economy is going through a little bit of a tough phase here. I will tell you, as bullish as we are, long term on GDP growth, in the very short term, again, we’re still dealing with a lot of Biden’s policies.

[00:32:48]:
We’re still in that. We are still in that transition process. Trump’s only, what, in office now? What, nine, ten months? And to add to that transition period, you know, there are now 2 million, more than 2 million illegals that are out of our country. Only half of the, excuse me, only 500,000 of those have been caught by ICE. The other 1.5 1.6 million have self deported. How interesting is that? You know, I, it’s not that, by the way, it’s not that I don’t have compassion for these people. I think I was, I think I would speak for probably most of us that we have someone in our life that helps us either with your yard or with your home, maybe cleaning, you know, maybe you have help in other areas that, and we come to really like and love these people. I can tell you that’s our case.

And I don’t want them to have to go through this. They came into the country a lot, a lot of these people came, illegals came into the country because Biden invited him open the door and said, come on in. You know what? If I were in their place, I’m in their shoes, I want a better life. How can you fault any of these people for taking Biden up on that opportunity? And so I have a lot of compassion for these people and I think that, yes, and Wayne and I disagree on this big time. I think that, I think, I’m not saying I support a policy that they can become citizens. That’s not at all what I’m saying. But I think we need to find a workaround for these people that came here and so that they are paying taxes, right. That they’re fully in the system, that they’re not on food stamps.

Right. That’s so many, so many are taking advantage of our system. All of that’s got to be removed. And maybe when that happens, a lot of these folks will leave anyway. Right. But I think it’s hard not to have compassion for them. Wayne believes that all 40, 50 million, he thinks it’s 50 million plus illegal. Should be removed from the country.

I have a little bit more of a heart than that. I mean, I get his point completely. But look, we’ve already lost 2 million people and the economy is weaker because of it because again, these are consumer purchases, basic necessities, fast food, I mean think about it. They all have to eat, live somewhere, they use electricity. This is consumption that is not taking place. It’s 2 million people in a short period of time. You. Yes, that does have a short term negative impact on the economy.

The government shutdown is having an increasingly larger impact. Right. Missed paychecks. Right. People are cutting back on spending. This affects a lot. The government’s the largest employer in the country. At least I believe they’re still bigger than Walmart.

Maybe not now. I think Walmart may be the largest, but it was right there, pretty close. But again Missed paychecks, airline travel, you know, the UPS crashed yesterday. Now, I don’t see, see any evidence, haven’t heard any evidence that was due to anything like this with air traffic controllers or anything. But I know a lot of people are more nervous about, about flying and I think you should be. Obviously, the wait times at airports have grown immeasurably. You know, if you’re going to the airport for flight, I think now you better get there three, four hours in advance if you really want to make sure you’re on that plane again. Also, 42 million people on food stamps, a lot of missed paychecks, Federal employees, federal ice, in this case, federal law enforcement not being paid, military.

[00:36:11]:
I believe that there was a stopgap measure to make sure they’re paid. I don’t know if that’s going to continue. But, you know, you missed a couple paychecks for the average person and you feel it, right? So this is beginning to have a real impact not just on their lives, but on the broader economy. And I think also maybe the larger point is that animal spirits. This is a negative. This is a clear negative. And I’m not saying, you know, Trump or Republicans are blame, they’re clearly not to blame. The blame for this is entirely, 100%.

If I could go higher, I would. The blame is entirely on Democrats on this. Remember, folks, if you disagree with me, I One thing you’ll have to know about me is I’m a lifelong independent. I call it like I see it. Yes, I may have my biases. Who doesn’t? But I call it like I see it and we do our homework and then we call it the best way we can. And I’m telling you, it’s 100% on Democrats that this stoppage is taking place. And of course, I think, I think the government’s going to open very soon, don’t you? Now that these elections are out of the way, they use it as leverage, you know, and I think that the shutdown is going to end pretty soon.

 

That’ll be, that’ll be positive for the markets. Remove a lot of the uncertainty and the lack of liquidity that’s coming in the markets. That’s some of the weakness we’ve seen in high beta stocks, momentum stocks, Bitcoin. Again, all of this starts to add up. And once animal spirits get a cheek in their armor, you start to see weakness around. You start to see the edges begin to fray. And that’s essentially what’s been happening here. But again, now that the, the elections have taken place.

I would expect that you’re going to see the government reopen again here pretty soon. All right, let’s take a look under the hood today. Oh, one more point. I covered this yesterday. I’ll mention it quickly. I covered this morning in the letter. US Dollar after hitting extreme oversold levels again. We’ve been bearish in the dollar since the election.

We told you that Trump wanted the dollar lower, the dollar would go lower. That’s all that it did. But then it hit extreme oversold and it began to rally. Well, that rally now is taking the dollar right back exactly to the 200 day moving average. And it’s also hitting extreme overbought levels. This is a classic sell signal. Again, the primary trend, the dollar has been and remains lower. We don’t trade currencies here, but we kind of do because there are so many of our investments that are tied to, at least in some part tied to the direction of the dollar.

And that would be gold, silver, certainly the miners. Again, this whole group is impacted. And what do we see today? What do we see today? Let’s talk about it real quickly here again, gold today was up handsomely. I’ll give you that specifics in a moment. More importantly for us really is the miners. Again, when gold had its six day ten shakeout, the miners got smoked. Of course. That’s where the leverage is.

That works both ways. GDX, the gold miner ETF hit a high of 85 last month and it dropped down to 68. Right? 69 this morning was low. But today the miners GDX was up 3.4% today. This group looks fantastic to us. We are adding two positions in this group, certainly in our VRA10 baggers in this group. And I would expect a very strong move higher into year end. Very strong.

Again, seasonally wise, it’s a great time to own gold, silver and the miners. And that continues by the way through, I believe through February, seasonally speaking is the strongest time to own this group. But we remain, you know, remarkably bullish long term and short term and medium term on gold and the miners. And now that the dollar is set to reverse, this will be, this will give, this will give the investors a solid reason that track this kind of thing as the dollar falls to, to allocate more money to precious metals mine. Just another reason like this group certainly on this pullback and again we’re pounding the table on this group right now. Okay, let’s look under the hood today. The internals today, kind of, kind of just a reverse an inverse of yesterday, frankly. Solid internals today, 2 to 1 positive for advanced decline volume today.

[00:40:11]:
We actually we were three to one negative yesterday, so not quite as strong. Volume Yesterday was about 70. Downside volume again that’s not, that was not a shocker for as negatives. Yes. Remember Nasdaq yesterday was down 480 points. Right. But today we had 56.7 upside volume in Nasdaq, 64%, it’s almost 65% upside volume in NYSE. And we had about, about 100 more stocks hitting a 52 week low than hit a 52 week high.

And our sector watch again, the inverse of yesterday we had eight sectors finished higher, three finished lower. Led to the upside by communication services up 1.6%. Consumer discretionary up 1%. And then to the downside, frankly it’s Almost like all 11 sectors were higher. There’s just nothing here. Consumer staples, we’re down a quarter of 1%. Right. And there’s just, there’s no damage done today in this market.

It was a good bounce back day. Again we remain very bullish and remain dip buyers for all the reasons we’ve been talking about with you here in our commodity watch today again, good bounce back in gold 3990 now I think it’s going to hover around 4000. We’re buyers here of course, up 30 bucks announced today. That’s up 8/10 of a percent. Silver up 1.2% today, 4786 copper today up 8/10 of a percent at 4.98 a pound. And finally the day crude oil, excuse me, crude oil down was down, down 1 1/2% today, down 92 cents a barrel, back below 60 at 59.64. That’s what Trump wants. We’ll talk about this often here, haven’t we? Trump wants a lower price of gas and lower price per bureau of oil because this commodity happens to go in pretty much everything and that’s how you deal with inflation.

And finally the day bitcoin rallying back here after dropping yesterday below 100,000 back now, last trade 103,451. That’s up by 2.3% over the last 24 hours. And of course we like bitcoin here as well. We are in the strongest quarter for bitcoin as Tyler reminds me and I think he’s right about this. The average move higher in the fourth quarter for Bitcoin in the last 10 years. I think I’ve got this right. If I remember right, like 57% again. We’ll have Tyler cover that in some detail on Friday.

I think that’s pretty close at least. So, again, this is a very good quarter for bitcoin, and we think this is a good buying opportunity here. All right, folks, that’s it for the day. Hey, always appreciate you listening. Appreciate your feedback. Have a great night. We’ll see you back here again tomorrow after the close.