In today's episode, Kip takes a deep dive into the week's record-setting stock market action. We'll explore the positive trends in market internals, the resurgence of small-cap stocks, and the impressive performance of the semiconductor industry. Plus, we will cover the latest action in our favorite names and sectors. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Friday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Hope your week is fantastic as well. Everyone in our area here is without power still in the greater Houston area. It’s really been a complete mess here. We were without power for only a couple of days.

Of course, when you’re in 100 degrees heat and you have no power and no cell, which is what we had here, the day’s still a little bit longer than 24 hours, but we still have, again, over a million people without power. And now word is breaking about Centerpoint energy and their wokeness and their commitment to DEi and the fact that the upper echelon of Centerpoint all has preferred pronouns. They go by. It’s a recipe for disaster. And this is what’s really happening throughout society. You just don’t think it’s happening in our city. In Houston, Texas, has been a long time red state. And, you know, Houston now, after being conservative for forever, for the last decade, now has been run by Democrats.

[00:01:05]:
And so this is what’s happening. Far left city government combined with now a far left centerpoint, our primary energy provider, and a Greg Abbott that is, frankly, I know there are conservatives like him. I don’t understand it. I do not understand it. Remember what happened during the pandemic? He was one of the first red governors to shut our state down. And that’s just one example. Many others like, why hasn’t he closed our border? This is a guy who’s governor of our state, can lock our border down if you wanted to, then fight them in court. Right.

Make force them to come down and remove your national guard from our border. So again, I have long term problems with Greg Abbott. I think any true conservative and freedom lover does. But also, especially on this, again, this is not something, if we had Ron DeSantis as governor, this wouldn’t be happening in Texas. And the reason I’m concerned about this for my fellow Texans is we’re now in Hurricane season. Barrel was a category one. Yeah, the winds were twisting and, yeah, it was strange. Really strange winds.

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More like Twister, tornado type winds. The damage we saw was from that, but we didn’t have a lot of flooding. The winds weren’t that high, 80, 90 miles an hour. So what’s going to happen later in the year if we get a serious cat, three, four or worse, what’s going to happen then? So everyone we know is getting their generators, making sure that, as we’re doing now, we’ve had it. Now make sure it’s installed fully and operational because we think this could be a lot of, imagine living in a blue state. A lot of you listening. Do you live in a blue state? You have this to contend with along with criminality, this influx of now gangs from all these southern countries that have found their way into our great country. So, yeah, that’s why more than any reason, this election is that important.

And while I’m on record, it’s having a lot of problems with Donald Trump. There’s not much conservative about him, the way you handle the plan, demic, the jabs, operation warp speed, like, I’m on record of that long term. But I don’t have a doubt this guy loves America, probably second to himself, but he does love America. And he’s a, he’s a fighter. He’s what our country needs. And we absolutely have to be Biden or whoever it is that, that’s running in his play. So I talked to Wayne Root today, by the way, and thanks again to Wayne for having me on the show last night on real America’s voice. The root reaction.

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Great show. Really. He’s doing really well. It’s flat up the charts. I think he’s the second most popular host now on real America’s voice. And I know he’s got, he’s in negotiations for other shows as well now because this guy’s nonstop. He works 26 hours in a 2024 hours day every week. He is really relentless.

But I know Wayne talked. I don’t think you’d mind me revealing this. He talked to team Trump today. I won’t say who he talked to in Team Trump, but it’s either the big guy or someone very close to him who said that. Yeah, they believe it’s over. What they don’t know is will he quit on Lester Holt’s show, the interview on Monday evening or will he wait till after the republican convention to do it? But Team Trump is convinced that he’s gone and he’s going to be replaced. So a lot of big wall of worry as we go into November for sure. The markets today, really good day today again, all time highs for the first time in some time in the Dow Jones all time high.

It didn’t close there, but it closed right at 40,000. That’s about 77 points from all time in an intraday, all time high, though, at one point up about 450 points. I think I saw 470 points today, finishing up 247 points. Good to see the Dow again. This is the rotation we’ve been talking about. Tyler spent a lot of time going through this yesterday, the rotations, because every great bull market, this qualifies this early, remember, it’s still a young bull market. We’re still in just the second year of this bull market. I think people get very.

[00:05:21]:
It’s easy to be confused. It’s easy to be confused. It’s easy to be bearish. Again, before this bull market started, we had three bear markets in five years. In each of those, starting in 2018, in each of those bear markets, the average loss for the average stock was better than it was, 48% to 65%. This is brutal in five years to have that happen three times. So, yeah, it’s easy for, as I said, pretty much in every interview I’ve ever done, I completely understand why investors are leery and why they are afraid to commit new money and why every time we have a shakeout, even though it may only be a few days or just a few percentage points, most people sell their stocks. And that is what’s happening here.

I understand that. But the point being, in a bull market of this size, it’s a structural bull market for all the reasons we’ve covered here so often, this is a key difference I think too many people aren’t picking up on because the underlying theme, and I don’t want to go too far off tangent here, okay. But the underlying theme here, really, of our. Of our call for this bull market has been that this is structural, and this is not something. This is the kind of bull market that has a lot of links to it, typically. So this thing could go on 810 years plus. When you add that to the fact that we’re in an innovation revolution and we have technological change coming, happening right before our eyes right now, that makes you feel like you’re living through a science fiction movie. Bottom line is it promotes true GDP growth of size and scope.

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So instead of having GDP right now growing at about two, 3%, four, five, 6%, Kathy Wood’s team at AHRQ believes eight to 10% growth in GDP. And that, of course, means corporate earnings are skyrocketing. We’re already seeing that this is going to be the best quarter that we’ve had in about two years. And again, we think that’s only going to accelerate. So that’s the structural component of this. And so at the same time, we have this psyop of negativity that I’ve talked about for about a decade. It is real. I know it.

I know that. I know the perpetrators of it, and it’s the state, folks. This is an intelligence operation. Now if you’d asked. So what’s the purpose, Kipdin? Why do they want people to be negative? Well, I’ll give you three reasons. I’m going to write this up for a Monday’s letter. Number one of the final stages of communism taking over a democracy is demoralization. Demoralize the public.

Make them. Everything that’s left, that’s all you’ve always seen, is left, is now right. Everything you think is up is now down. Nothing makes sense. Demoralize the public. Make them believe the world is horrible, the economy is horrible. It’s not. Again, we’ve talked about this so much.

But for our newer folks, I’m just gonna, I gotta rattle a few things off because frankly, there’s just, there’s almost nobody else saying this. And it’s so easily verifiable. That’s what’s really very much, I think a tell for me. All right, here we go. Home prices. I’ve got these all memorized for the first couple weeks. I used to talk about this. I had a chart in front of me, you know, not necessary anymore.

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I think I’ve said this in 20 different interviews just in the last year. We also covered all this. Some of this at least in a big bribe. Some of these facts, of course, have come out cents. These are all, all time highs about to give you. Okay, all time highs. Home prices, all time high. Net equity in homes, all time high.

One third of Americans own their home without a mortgage. All time high. Credit scores, all time high. A consumer net worth, all time high. So again, even, maybe even bigger is that, at least as big is that over the last 15 years, consumers have cut their debt by 25% to disposable income. And so we learned from the financial crisis, we learned we never want to put ourselves in a position where the banks can take our stuff, where people can impact us financially just because we go through a horrible one to two year period where home prices and the markets drop. Right. And so we learn and we reduce our debt.

Companies did the same thing, also reducing their debt by 25% to market cap. This is even, this is, this may be the most powerful of all. Corporate debt to market cap is trading as a 50 year low. It almost is an all time low itself. So american companies are sound and profitable. The consumer, again, you don’t hear this, but the consumer is sound and profitable. This is, the consumers haven’t been this strong in decades. So again, demoralization, that’s one reason.

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There are another very. There’s a couple other very clever reasons that they want us to think things are horrible. If you’re really, really wealthy, what? And you’re building wealth, what do you want to be able to do? You want to keep buying things on the cheap before they run up. So you want to be able to keep buying cheap real estate. You want to keep. Keep buying cheap stocks, so you make the public believe things are horrible so they stay out of the market, allowing the elite and the smart money, if you will, to really buy stocks and real estate, etcetera. Assets on bitcoin, etcetera. Every asset on the purchase.

Metals and miners buy them on the cheap. So that is the best I can tell, is what’s behind the scipe of negativity. There are some other minor reasons as well, but it is real. And so it has to be real, right? Because while, yes, there are two Americas, the mainstream of the country is doing incredibly well. And again, the media would have you believe otherwise, but the facts simply don’t support the media’s cause. I think the primary reason is demoralization, because we see it throughout society, don’t we? Things that just don’t make sense, you know, transgenderism and trying to groom our children, the open border. This is. None of these things have ever made, will ever make any common sense.

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And they’re trying to make it seem like it’s just another normal day at the office. So, anyway, the bottom line is it’s a structural bull market. For all the reasons just talked about, this bull market is just getting started. And so the rotation theme now is what makes this so compelling, because if you only have the seven mega cap stock, MagnuSon Seven, if only they are going up, your bull market is only going to extend for a certain amount of time. That’s what we were telling you, that as those stocks were going up at the other 493 SB 500 stocks were going to play catch up, and that we believe that the internals were going to improve, and they’ve been really horrible for some time. Well, guess what happened this week? That game changed. Everything that we just talked about began to happen. Broadening, action taking place.

The internals. Tyler covered this yesterday. Yesterday, 80% upside volume days. Yesterday in NYSE, Nasdaq, 75%, Nasdaq 78%. We had another really good day today as well. Seven to one advanced decline yesterday, NYSE, even as Nasdaq was getting clobbered yesterday, right. That the megacat tech stocks had a horrible day, by some accounts the second worst day on record. For the largest tech companies.

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Well, they bounced back today. But even though that happened, our markets rose. The internals were stunningly good. So again, these are tells, these are big tells that tell you something different is happening beneath the surface, and that dips must be bought. And so the rotational theme that’s now happening, you’re seeing small caps catch fire, mid caps, really plain catch up. The other four hundred ninety three s, five hundred stocks now moving high, not all at once. Right, but they, but this is broadening. And again, we see that in the internals.

And I’m going to write this up again for Monday. But, boy, there’s just so many compelling reasons to look at this and say this bull market is so early, it’s so incredibly early again today, all time high in the Dow Jones. That that happened again. Right. We’ve been talking about that for 2030 days plus days in a row for the s 500 in Nasdaq. Now, we can say it about the Dow Jones, but guess what? We can’t say it about yet. And this is why it’s a slam dunk, in my opinion. Small caps, right? IWm rust 2000, it remains 12% below.

It’s November 2021. All right? It’s almost been three years since the small caps have traded at all time high. We believe this is the markets giving us a gift. And we’ll look back, I believe, and look at this, at IWM, that rust 2000, and we’ll look at all that sideways action, all that chop, all that churn, and we’ll go, okay, that was basing, that was consolidation, and it’s going to have this great base now which to explode from. You look at the chart and you’ll see what I’m talking about. Now, broken out to do 50 gm, but still 12% below. It’s November of 2021, three years ago, almost highs. So, again, as the markets continue to broaden, as rotation continues to take place, it doesn’t mean that now we’re going to sell our tech stocks, we’re going to sell our semis.

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They’re gone. We’re going to sell bitcoin. All our financial engineering stocks are all, no, no, no. It’s just that they hit extreme overbought on steroids. It’s time for them to take a breather, and now it’s time for the rest of the market to do its thing. These rotations are textbook bull market action. And the fact that so many don’t see this, and I follow a lot of people, and the fear is high. And again, every time we have a little shakeout.

They’re the first to the door. That’s what we want to see. Because there’ll come a time when that won’t be the case. When we start to get shakeouts and market pauses and then these same people say, oh, don’t worry about it, buy the dip. That’s when we should be concerned. That’s when we should be concerned. But right now, when we have these short term shakeouts and all of a sudden the fear and green Dex drops below 50 or below 40 into fear territory, as just happened a couple of weeks ago, and these other sentiment surveys really begin to collapse on just almost nothing, then that’s a buy signal. That’s the psychology of a bull market that really, we think is very important.

Again, it’s a tell for where we are in this bull market. Continue to believe we’re in about the second inning of this bull market because this Dow Jones is going to go to 100,000. Been our target now for two years. This is the bull market, takes the Dow Jones to 100,000. This is the bull market, takes Nasdaq to 40,000. Look, it may sound fanciful to make a forecast like that. We typically don’t do that. We are trend followers.

Until we wrote the big bribe, Tyler and I wrote spend a year researching it and writing it. Until we wrote that, I didn’t make these grandiose sounding forecast because we’re trend followers. And it doesn’t mean we’re not a trend follower because we’re making big forecasts. But again, you write a book, we found these five mega trends that were taking place. We’re going to power the bull market. And it just all made sense because of the earnings growth that we forecast, that this is where the markets were going to go. Because again, we’re looking at this as a similar market to 1995, to 2000 melt up. But again, we think this is more powerful than the.com melt up, much more structurally bullish and longer lasting.

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This is that bull market. And this we’ve just encouraged everyone, look, and just telling you we are staying locked in. Tyler and myself and our team, we have made the decision. We made it some time ago. This is that bull market. Stay locked in because this is an opportunity to build generational wealth, help our clients and subscribers build generational wealth. And, you know, it helps when you’ve got other projects like lost soldier oil and gas that we’re involved with and our ten baggers that have an opportunity, I think, to really, really make this a special run for us. That’s why we are staying locked in, folks.

It’s 24/7 all hands on deck. And stay with us here. We’ll keep telling you what we’re doing with our own money, and that way you can make a decision about what to do with yours. That’s always been our approach here at the Vrade bank. Stocks. Banks reported earnings today. Really kicking off Q two earnings. What a fizzle this was, huh? All of them were closed down on the day.

Not bad numbers really, except Wells Fargo. But the Citibank reported today they were down 1.9%. JP Morgan, again, a mixed earnings report. They beat. But there were some parts that weren’t as strong as they wished of investment banking and others. JP Morgan down 1.2% on the day. Wells Fargo, probably my least favorite bank of all time, just because I know the shenanigans that they played for so long. Down 6% of the day, and again, not horrible earnings at all.

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Here’s my experience with these bank stocks. They almost never stay true to form on the first day of trading. I believe that starting next week we’ll get a rally in the bank stock. Here’s something for you. The BKX, which is the bank index, is 26% below its all time high. While the XLF, as Tyler just told me, XLF is the financial ETF theyre at all time highs, right? So you get a lot of fintech, you get visa, you get Mastercard. Instead of just owning the big banks, which are brick and mortar. This is, Tyler just explained all this to me.

So its, I used to know all this at some point. Its great to have Tyler give me up to speed again now. But seriously, that’s why we’ve avoided the bank stocks because of the brick and mortar business, because of the liabilities they carry as assets that really aren’t assets. They are true liabilities. It’s just better places to make your money. But having said all that, I do think because again, we’re looking for an exceptionally strong quarter, I think bank stocks are going to rally next week. Again, as part of the broadening action, there is some seasonality here to be aware of. We just today actually marked the final day of one of the most bullish periods of the year.

That’s probably why you saw the sell off into the closing and Dow was about 450, finished up right at 250. So we lost a lot of steam at the end there in the last hour of trading. Smart money hour, not what you want to see really. And we are hitting extreme about levels. So there is risk in this market at this point. No doubt about it. But look, it’s been a great run, as we’ve said, for a VerY LONG time, based on the VerY investing system. When we report to you that we’re extreme overbought, that’s not a time to take profits necessarily, but it certainly is a time to be smart.

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It is a time to use discipline, and that’s our approach here. As much as we love Tesla, we started reporting two, three days ago that Tesla was hitting extreme overbought on steroids, on the very system, which is our most overbought designation, with all our momentum oscillators together hitting extreme overbought again. We call that extreme bought on steroids. We Just said, you know what? It’s not time to buy. Just stop buYing. It’s a good time to hold. Don’t sell. For sure.

It’s not a reason to take profits here, but just be PATIent, use discipline. And of course, yesterday Tesla dropped 12%. It was back up 3%. Today we use these dips in these extreme overbought levels in our favorite investments. TESLA is one of those. Of course, we use that as a buying opportunity. That’s what you just got to be a little patient. Sometimes hard to do.

You get caught up in this. Bull markets are fun. You know, when you’re making money, you want to make more and you want to pile on the positions. I get it. You want to pyramid it up. You know, if you’re a blackjack player, you know what I’m talking about. But there’s a time to be smart and have discipline. This is that time.

Not a sell signal, just a time to be smart. As far as what’s going to happen next week, seasonality may not be as strong, but I remind everybody we’re looking for a very good quarter in earnings. And in addition, seasonality does remain strong, even though the second half of July is not great. Seasonality does remain strong through mid August or even a little bit later. But again, a lot of people now concerned about what’s going to happen in November. I understand that they’re going to do something stupid with the bombing of Russia starting World War Three. Yeah, there are always risk, but we do have a big wall of worry. Bull markets tend to like to climb that.

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But again, the primary takeaway, the macro case here, is that this bull market is just getting started. So unless you’re a day trader, very short term trader, you could buy here and go on vacation. Check your prices in three years and you’ll be just be glad you didn’t do anything except continue to own your favorite investment. That’s where we think this market’s going again. All right, let’s get to the internals here again. Another good day today. Again, the bears have been really, really moaning about the internals now for a couple months, and they hadn’t been great. That’s changed now.

Stellar internals yesterday. They’ve been improving today. Rock, rock solid again. We had, what was this? Three to one positive. NYSE advanced decline. Nasdaq also right at three to one volume today, 71% of volume day. NYC yesterday was 80%. Nasdaq today, 75% of volume day.

Very good day again yesterday. Even with the shakeout in growth and tech stocks, the internals still were rock solid. And check this out. Been a while since we’ve had this kind of a number. We had 622 stocks hit a new 52 week high to just 48. Hitting a new 52 week low brought again broadening action. There’s your evidence, there’s your proof. Broadening action is taking place, of course, in small caps are on fire now.

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Right? Big move yesterday, another 1% today, and we believe that’s going to continue. Nasdaq today, by the way, did bounce back up 115 points of, if you’re wondering about our favorite group, our number one tell, which is, of course, the semis. Yeah, up again today, up 1.6%. They were down big yesterday. Got a lot of that back today. We do like the semis here. It’s interesting. As overbought as parts of this market are, the semis now aren’t in that group.

They still look very good here on the charts. And live your investing system with this rotation. We think against housing. Real estate is really doing well. We love energy here. Precious metals and miners, of course, and small caps. That’s the broadening accident we’re talking about in our sector watch today. This is another great day here.

The sectors, ten of eleven sectors finish high on the day. A lot of strength here. A lot of sectors of a half percent or more led the upside by consumer discretionary of nine tenths 1%. Materials also nine tenths 1% as Washington technology up nine tenths of 1%. Big tailwinds for small caps here, folks. Rates are falling, rates will continue to fall. Tyler spent a lot of time on the inflation data yesterday. I’ll make a key point to you.

The only reason that on paper, meaning in the CPI readouts, the only reason the CPI has been stubbornly high, there have been two of them. They are insurance and shelter or housing. Those have been the two areas that have been stubbornly high, where prices continue to rise. And now those fell yesterday because they’re lagging indicators and because everything else is well below 2% that the Fed’s worried about. This is when we’re likely going to see inflation fall off the map here. It won’t be long until you’re talking about people saying we have deflation. We’re headed there. We clearly been in a disinflationary environment now for well over a year, which means inflation is falling.

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It doesn’t mean it’s reversing. It’s just, it’s less than it was before. That’s clearly been the case, without question, very definition of disinflation. And now, because China has been exporting deflation now for over a year, again, all of these internal gauges and CPI and PPI are now beginning to fall like a waterfall. Okay, you’re going to see prices really begin to rapidly. And so we’re looking for disinflation and then deflation because we are in the innovation revolution. That’s what innovation does. It causes disruption.

Disruption means falling prices of goods and services. That’s very bullish. And that’s why the ten year yield is going to continue to fall down below, of course, well below 4.2% now. And that’s why the Fed funds rate at an effective 5.33%, is way, way, way, way too high. The Fed should have already started cutting. They’ll regret waiting to cut in September, because again, they’re well over a percent higher than the ten year yield is now. But at the end of the day, it won’t matter. Because again, the bottom line is the economy just, it is strong.

[00:26:25]:
It’s a very strong comp, only going to get stronger. And hopefully we got Trump that really will know what to do with the strong economy to maximize the fun we’re about to have. Because imagine everything we’ve just talked about, all the reasons we’ve had to be bullish with Trump as president rather than Biden as president. And if we got the House and Senate as well, we do some real good. Because that’s the one thing Trump knows. He knows the economy, he knows business, and that’s what has us most excited. And by the way, if the market is truly a discounting mechanism, it is wonder what has been discounting, wonder why it’s going up yet. We have the underpinning to a very strong economy.

Innovation, revolution, AI, all these other things. But yeah, now we’re going to have an even more red pilled country with some normalcy returning and getting rid of these communist tendencies and takeover attempt. You can see how very quickly this could go from people being so, so bearish to, oh, my God, I’m so bullish. The future looks great. And people catching up with where we’ve been to. I think that is our future. Very excited about it. We just got to make sure they don’t try to pull another election rig because that is our biggest risk, isn’t it? And our commodity watch.

We had kind of a flat day today. I really, as you know, we really like. We’ve had a good run. Gold is now at 20, 416, down $5 an ounce. But what is that 40 ish? $45 from all time highs. I think it’s going to blow through that probably next week. Great looking setup, great looking charts. Silver today was down 2% at 31.03 an ounce.

[00:28:08]:
Copper today up 1.6% at 458 a pound. Crude oil today down a half percent at 82.19. And finally, bitcoin. I just saw today, just for this podcast, I read that you know this Mount Gox, right? Distribution. Some of that was to governments like the government of Germany. They had their coins and they sold all of them. They wasted no time at all to sell all of their bitcoin. That’s why they couldn’t hold it and just say, hey, it’s a chance for us to diversify out of fiat currency and out of fiat currency related debt.

Back debt. No, they had to sell it. Well, that’s put pressure on bitcoin, but that’s a buying opportunity. Seriously, the chart looks great. We’re just a bit below the 200 day moving average on bitcoin. I don’t believe that will last for long. Everything else is hitting extreme oversold levels. This is a buy signal.

[00:29:03]:
This is a big buy signal from the VR investing system recommending bitcoin here. The last trade, 57,611 a year in target remains 100,000. That may be on the low side. A cycle high is 250,000. That’s a two to three year target. Love bitcoin here. Okay, folks, that’s it for the day. Hey, I hope you had a great week.

Hope you have an even better weekend. We’ll see you back here again Monday after the close. Bye.