In today's episode, Kip breaks down recent market turbulence, including today's rough start to the week. Despite these tough conditions, Kip highlights the potential for a bounce-back, given a few key market analytics and current extreme oversold levels. Additionally, Kip presents a contrarian perspective on recession fears, arguing that market decline is more of a short-term US-centric event amid strong global markets. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Monday after everyone. Kip Herriage here with the Daily VRA investing podcast. Hope you had a good day today. My guess is you did not. We did not hear. I was out of the office today about half the day. And every time I check, checking my phone like, okay, there’s there, there are no rallies here.

This is a heavy market and unfortunately that’s typically the sign of a market that’s not going, gone, going down yet. Before I get to any more on that, because we are at extreme oversold on steroids essentially across the board, which is when you always get a bounce. We are that oversold. To prove that, let me read some. We get some good research here for some people we trust and that we’ve worked with for a long time. For example, bespoke, bespoke research came out with a really good piece today. Let me pull it up here. They actually had two pieces that I think are significant.

This is from an hour ago. 31 of the last 32 times SB 500 has opened down 1% and then fallen another 1% of the open and close. It has then been up three months later every time but once. Okay, so that’s a level of how deep this was today as far as Nasdaq 100 goes. Check this out. Nasdaq down now 12 and a half percent in 13 trading days. The biggest 13 day drop since May of 2022. Only a little bit further, it’ll be the steepest 13 day drop since the COVID crash of 2020.

[00:01:25]:
Trump team talks about a little pain, but that they want a market crash. Tyler reminded me of this earlier today. One of the Democrats strategies that they’ve used time and again is what they call the wrap up smear, the rapid spear is when they have their favorite friends, in this case economist or market strategist that put out a comment talking about, okay, inflation is going to be caused by Trump’s tariffs. The economy is going to slow down rapidly because of Trump’s tariffs. They get that into the media and then they, you know, again to their favorite media sources and then they come back with the wrap up smear and say, we see, we told you so. Look what’s happening. The media is saying it, economists are saying it, strategists are saying it. And that’s the wrap up smear.

That’s what we see playing out here. Consider this the if you’re tied to Trump, you’re getting hit hard. If you’re tied to Elon Musk, you’re getting Hit hard today, Tesla. And this is just the last count that I, excuse me, Twitter X is called now was down. The last I saw was down five times today. And Elon Musk is saying straight up that this was a hack job and that this is being done intentionally. He said by powers that be, be it either country, a combination of countries likely, I’m sure implying even to the US Deep state. So they attack X today.

[00:02:49]:
They attacked Tesla today, again a friend of Trump, they attacked bitcoin today. The bitcoin president is in office. And oil, which actually you know what, oil is sharply lower as well. That actually is what Trump wants to see. He really wants oil down in the 60, $65 area. We’re fairly close to that now at 66 and change. But this feels very much to me like a wrap up smear because the selling pressure makes no sense. You don’t go from just a month ago, economic growth, GDP wise was estimated to be 2.5%.

And then what happened? The Atlanta Fed was the first to say we were going to have negative growth and then they went all the way to -2.8% growth. That happened in a single month. I’ve never seen that happen before except during COVID Now you tell me, do you think this timeframe is Covid? I sure don’t. Our tariffs to Mexico and to Canada make up a total of 2.8% of US GDP. So this looks to me like a wrap up smear. We are. If you are, if you own any of these holdings, if you investor in the market, you’re now collateral damage. You’re a friend of Trump, essentially a friend of Musk.

[00:04:02]:
And you are as an investor, as an American. We are collateral damage. That’s what’s happening here. Because what we’re seeing, the selling pressure does not make sense, especially because global markets are so strong. This is a, we were been saying this for the last week and it’s even more the case today because this has been a US centric decline. And, and while global markets keep hitting all time highs or 3 year high, 4 year highs, etc. That means this is very targeted to the United States. Now why, why would that be? I don’t think it takes a conspiracy theorist to point to what’s happening in the market and say, you know what, they can’t impeach Trump this time.

They don’t have control of the House. Trump has control of everything in D.C. essentially. Right. Not including the rhinos, but what they can do through the powers that be, talking about everything, capital S state based, be it the central bank, in this case the Federal Reserve, possibly global central banks, major Wall street investment firms, certainly hedge funds. These are groups that do not care for Trump. And what’s happening with Musk and Dogecoin which is essentially uncovering this massive level of fraud. I think this is the state attacking the markets and the system going you’re getting close, you’re over the target.

[00:05:23]:
And they don’t want them to find what they’re likely going to find. And I think this is what Trump has said, look, this transition period as he called it, may be a little rocky, but this is the price we have to pay to root out the issues and to get America back on the right track. Do I think we’re going to recession? No. Is the market trading like going to recession? Yes. But again this feels very short term, very targeted, very much a, like a wrap up smear. And I think that’s, that’s what most of us feel, you know, from talking to you, talking to our friends of the business, this, this, there’s not a lot of sanity behind this decline, certainly not in the decline of Tesla. Tesla was $488 in December, it’s 222 today. Does that make sense to you? Yep.

They’re attacking must hard people are being paid to go basically firebomb his locations. The left obviously saying oh, we’re never going to buy a Tesla again. Well, I know a lot of conservatives that are buying Teslas, that includes me. And by the way, before I forget about Tesla again, this is, this is one of our Focus stocks. This is a VRA10 bagger. What do I think about Tesla 222? I’ll be buying more tomorrow. I bought more today. I genuinely, and I know this is, this, this may sound a little insensitive because we’re sitting on big losses from where we were just, just two months ago.

[00:06:43]:
Right. Buying Tesla anywhere near 200, even if it goes below 200, the charts say, by the way, is extreme oversold on steroids. This is the most oversold Tesla’s been in many, many, many years. And by the way, Tesla has always been a volatile stock. But this again, this is very unique. And by the way, there’s something else they targeted possibly. I was talking to a good friend, Wayne Root today and he didn’t shy away at all from the feeling that the starship that exploded last week, maybe there was something sinister that happened there because these coincidences that are happening here lead a lot of us to be very suspicious. And I don’t think we’re the only ones saying this or, or thinking this.

So we’re, we’re at extreme oversold levels. This is where bounces happen. We just shared this, what I just shared with you from the two pieces from Bespoke a minute ago. And we also have something out, just out now from Cathie Wood. Now this is interesting. I think Cathie Wood just put out a post. In our view, the market is discounting the last leg of a rolling recession, essentially the Biden recession and now the Doge recession, if you will. This will give the Trump administration and the Powell Fed many more degrees of freedom than investors expect, setting up the US Economy for a deflationary boom in the second half of the year.

[00:08:13]:
Well, as Tyler just reminded me, we know from what China just reported over the last couple of days about their CPI and their inflation levels, they’re at zero. Okay. So basically China is exporting deflation. This backs up our view, continued view that inflation will not, was not going to be and will not be a problem in the United States. We’ve also made a call that both the US Dollar and interest rates will continue lower. We nailed those calls. Dollar again hitting new lows. So let me pull up, I’m curious now.

Let me pull up that chart real quick just so I get this exactly right. Yeah. Okay. So US dollar has fallen from 110 essentially to start the year about mid January to 103 now. Just, just over 103 right now. And again, same thing with interest rates. The 10 year has fallen from today, by the way. It’s 4.2% the 10 year just after the election.

[00:09:14]:
Let’s call this. We’ll go from the beginning of the year like we did with the US dollar. The 10 year as we started 2025 was at 4.7%, if you will hit a high of 4.8%. The 10 year now is back down again to a 4.21%. So rates have gone the way that Trump wants them to go. The dollar’s gone the way that Trump wants it to go. Oil has gone the way that Trump wants it to go. And now we’re seeing again, we believe that inflation is absolutely going the way that Trump and Scott Bessant, Treasury Secretary, wanted to go.

What does that leave you with here? Does that really leave you with an environment where you think a recession’s happening? Yes. Because of some tariff policies? No. This sounds very, it feels very much to us like this is the wrap up smear. They can’t impeach him. They don’t have the power to do it now. They have to attack them in other ways. How do you attack them to really hurt Trump? You hurt his base. How do you hurt his base? With their pocketbook, the flip side of this coin.

[00:10:17]:
And there’s a big flip side. And by the way, there are now estimated to be between 3 and 4 rate cuts by the end of the year by the CME Market Watch. They’re basically their rate guessing service if you will. But as we pointed out from the birth of this bull market, from the time we wrote the big bribe, what we have happening in this economy is nothing short of spectacular. Meaning the strength, the underlying strength of this economy. Just got to repeat it again maybe for our Newer listeners here. 40% of Americans have no mortgage on their home. They’re paid off.

40% never been that high. In addition, net equity in homes is at an all time high. Consumer net worth is at an all time high. I could keep going. And when it comes to companies, the, the percentage of debt to market cap for US companies is at a 50 year low. So when you combine all this together, when you combine it all together, the ability for consumers and U.S. companies to lever up is unprecedented. And that’s the kind of thing you look for in these market shakeouts.

[00:11:25]:
When so many people through a wrap up smear are talking about the negativity of the economy, the, the, the potential crash in the markets. This is what the left, this is what the state capitalist wants to see happen. Unfortunately we’re collateral damage and we’re caught up in this. When are we going to see a bottom? Let’s go over some of those things now. Seasonality this week is turning bullish again. From mid February to this week, seasonality has been bearish over the last 20 years. Our peaks in mid February and then the lows in the second week of March had been the norm. Investor sentiment flashing big contrarian buy signals.

Fear green index last I checked was at 16. Let me get a fresh, fresh. Yeah. To 15 now. Excuse me. Now down to 15 again. This is the level of fear, extreme fear in the market that you see at bottoms. We saw the same thing with last week AAII investor sentiment survey.

[00:12:23]:
Also an extreme fear. We when the bull bear spread for the survey is this far apart as it is now, the market outperforms over the next one month, three months, six months and 12 months. That’s the level of fear now people being shaken out with this sell off. And as I said a minute ago, I think we think this is a crucially key point. Global markets are surging. This is a US centric short term sell off only. That tells us that it is short term. This is almost likely being coordinated to get Trump and Doge and Trump’s team, which by the way, this is the smartest cabinet and the smartest advisors we’ve ever had in a presidency.

Right. And they had back Trump’s back fully on his economic and his terror policy. So there are no global panic sell signals, something we should be concerned about. No debt crisis, no sovereign debt crisis. And this tells us this is short term. It is a bloodbath, no question. But we believe this is short term. What else today? Let’s take a look again.

[00:13:26]:
Let’s give you, let’s give you the bottom line numbers. Nasdaq today down even 4% down 727 points. That was our loser on the day. Dow Jones down 2% today, down 890. SPF 100 down 2.7% down 155 Russ 2000 down 2.7% today. But again NASDAQ our loser down 4% even on the day. With the semis today down 4 and a half percent, semi is leading lower. Folks, this isn’t what you want to see.

Semis, lean tech, technically the broad market. This is not what we want to see. It likely means the lows aren’t in. But all it would take is a flush, right? Maybe a turnaround Tuesday. Tomorrow get a flush at the open because we are there. All of our indexes and key sectors are at extreme oversold on steroids. This is when bottoms take place. We might just need a flush tomorrow morning and then have a turnaround Tuesday.

[00:14:20]:
Let’s take a look at the eternals today because they really, they weren’t, they weren’t as bad as I thought they were going to be when I got back in the office. And check these like, oh, this is actually surprisingly good. Today we had both NYSE and NASDAQ pretty much right together at at 544-to-5 to 1 negative. Yeah. Say 4.2 to 1 negative. On a day like this it’s not uncommon to see seven or eight or nine to one negative readings for that’s it for advanced decline for volume down volume on both NYSE and NASDAQ almost identical Both in this mid 70% range. NYC 76% down volume. NASDAQ 73.9% down volume.

Again, these are days where you typically see 85 close to 90% or 90% plus down volume days. We also today had 508 stocks, 72 week low to just 98. Hitting a new 52 week high in our sector watch today. This wasn’t pretty. It’s about what you think. We actually had two sectors finish high on the day, energy and utilities. Believe it or not, energy stocks up today with oil down the way. It was an interesting sign.

[00:15:26]:
Technology again led the way. Lower down 4.3%. Consumer discretionary down 4% again number of groups down 2 to 3% today including the financials which are performing very well. Also we’re hitting new highs of late financials down 2.3% on the day. And our commodity watch gold today again it’s, it’s, it’s been, it’s been a stalwart, hasn’t it? Not today. Down 7/10 of 1%. Down $20 announced today at 28.93 puts it right at a hundred dollars announced below all time highs. Silver today down 1% at 32.44.

Copper today down 1.3% at 464 a pound. Crude oil today down 1.6% at 65,92 a barrel. And finally of the day, Bitcoin also lower on the day again if it’s, if it’s Trump related, if it’s Musk related, it’s being hit. I don’t, we don’t think that’s an accident here. And again we aren’t buying the recession talk by the way. I’ll just make one. Bitcoin down 7.7% today. Excuse me.

[00:16:31]:
That sets a seven day today 24 hours down just under 3% at 79,380. That’s the last quote I’m going to, I’m going to wrap with this. If we’re right, this is the wrap up smear. This is the get Trump get bus. This is the we’re collateral damage. If that’s the theme. I think it’s time to see the counterpunch from Team Trump including his, you know, all star lineup of cabinet members and advisors. It’s time to see a counterpunch from Elon Musk.

What is their counterpunch? Do they have one? Are they just content we’re seeing this happen? I can’t believe that they are because again we own Tesla but we don’t work there. This is Musk company. You cannot take that personally. Musk has many, many, many thousands of employees. And again if it’s Tesla, it means that people at SpaceX are feeling it. If it’s Tesla, all of his companies are watching. What’s happened to Tesla, which is the public one, right. And we know they’re, they, they got, they’re attacking X.

[00:17:37]:
So I want to see the counterpunch because I’ll leave you with this. I would not in any, any universe, right? In any alternate reality, never, ever, ever would I go up against two people, Trump and Musk, when they’re on the same team, we’re on the same side. I think that would be flirting with suicide. I want to see what the counterpunch is here. Or are they just going to let them play themselves out, let this market get completely flushed out and then have the short squeeze, you know, from a best short squeeze of all time. Remember this as well. The wealthiest member members of humankind are also the largest investors in equities in housing and bonds. Right.

And debt. So when they make an attack like this, they’re attacking themselves. So we’ll see how far this takes us. Again, we are hitting extreme oversold on steroids now, certainly with Tesla, certainly in the, in the tech stocks. Seasonality is turning bullish. Investor sentiments flashing big contrarian buy signals. This has been a very much a US Centric crisis, US Centric decline, and it’s not impacted global markets. We believe we’re nearing a significant move higher and the lows are just around the corner.

[00:19:00]:
I want to see a counterpunch from Trump and Musk. Let us know they’re aware of what’s happening and that they have a game plan to stop this kind of carnage from happening in the future. All right, folks, that’s it for today.

Hey, hope you had a good day. Even better. Night. We’ll see you back here again tomorrow after the close.