In today’s episode, Kip dives deep into the remarkable performance of the markets, reflecting on the predictions made just five weeks ago as we inch closer to new all-time highs. Kip discusses why having endured four bear markets in the past seven years has left many investors feeling uneasy, even as the data and market trends point towards a powerful, sustained rally. Tune into today's podcast to learn more.

Don’t look back. The market is closed. Good Thursday afternoon everyone. Kip Herriage here with the daily VRA Investing podcast. Hope you had a good day today. Markets certainly did. Again today I got to start this podcast and forgive me, it sounds like that we’re patting ourselves on the back here. It’s going to sound like that.

I know it is. But here’s what we started saying on May 19. These are the exact words from a first VRA letter. We’ve said it pretty much every day since then. Quote, There is a magnet on this is main it five weeks ago. There’s a magnet on the market dragging it to new all time highs. This then higher still. We continue to think that the best analogy for this market is the pandemic.

[00:00:35]:
Remember, it wasn’t a pandemic. It was a plandemic bear market of 2020. In that year, after the March lows were in, we had a V shaped bottom. As Tyler covered on this podcast, not only did we get all time highs in the pandemic, but far beyond with additional sharp gains in the year end. For example, once the March lows were in again, this is in 2020. Nasdaq proceeded to rally another 79% into late November. We may not get that kind of parabolic move higher, but what is clear to us is that we’ new all time highs and then well beyond. That’s from five weeks ago.

How did we know that? Because folks, we, we wrote a book three years ago saying that we were in the, in the innovation revolution, that we’re in the roaring 2000s and that these by the way, remember this is now we had four bear markets since 24 bear markets in seven years. Unprecedented. Absolutely unprecedented. We’re back to two all time highs again now folks. And you know, Tyler, just having this conversation, I would imagine that everyone listening to this is going to be able to relate to what I’m about to say whenever we are out like this past weekend with friends and family down in Galveston area. But whenever we’re out and we’re just talking about things, you know, invariably when I’m talking about the economy, stock market, whatever, we always get this reaction. I don’t know how you can invest in this market. Just scares me to death.

We hear this all the time. And that’s the reason when you have four bear markets in seven years, again unprecedented where the average stock loses more than 40% of its value right in. In two of these, the average drop was more than 50%. Folks, if you know that the average Stock is dropping 40 and 50%, how many of our holdings dropped 60%, 65%? That happened, right? Especially if you use leverage ETFs. It just can, it can demolish a portfolio, which is why, you know, having a VRA investing system so important right now, by the way, we’re at 9 out of 12 screens. Bullish. It’s a full on buy signal. But back to, back to the public, couple things here.

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Number one, reality hurts, right? Four, bear market, seven years, that hurt, right? That’s enough to scare anybody and to want nothing to do with this market. But number two, it’s the media, it’s the propaganda machine because it is raging, okay? It is absolutely raging. You know, it just depends on who’s president, you know, but, but when, when Trump’s president, you listen to CNN or MSNBC or whatever, you know, or Bloomberg or cnbc, and what you hear is fear, you hear risk, you hear downside, right? And it just flips again, depending who’s president. So we have a bifurcated system. And again, there’s still the bottom line is, look, what we know is this, there are so many people, the vast majority of people now, they may have money in the market, but they’re sitting on eggshells. When’s the next shoe going to drop, right? And so I bring all that up because this is exactly when you get your biggest moves higher. This is, this is textbook. When you get your biggest moves higher.

And are we done yet? No, we’re not close to being done. I will say, however, again, NASDAQ today. Nasdaq, Excuse me, NASDAQ 100 today at another all time high made a new alt. It was a point away from closing all time. Yesterday, intraday, all time high. We got that officially today. Nasdaq itself is just, is just a few points away from an all time high. SB500 intraday hit an all time high.

But not on a closing basis. But again, we’re right there. And this is, again, this is what we started telling you five weeks ago is going to happen. So how do we know that? Because patterns matter. Trend recognition matters. That’s why we’re trend followers. And when you see these enough, you know, and you, and that’s why we have 12 screens in the various system, you know, 80% fundamental, excuse me, 70% fundamental, 30% technical. And because fundamentals matter more.

[00:04:35]:
But in some cases, like what we’ve just gone through, the technicals really matter because we had important support levels that held, right? And then we had our buy signals that really mattered the most. Like the Semis leading not to beat a horse, but since we’re there, let’s do it again. The semis have led the market in both directions from the advent of quantitative easing in 2000. How many times you heard us say that? Right? It’s just because it’s true and we don’t hear hardly anybody else saying it, but it’s exactly right. It if you get the direction of the semis right, then you know which way the market’s going to go. And what happened on April 7 that the bear market bottom. The semis bottomed and reversed sharply higher. It was like a bell went off as we shared this chart many, many times with you in our very letters.

You know, this chart’s going parabolic now. Semis are going parabolic versus the rest of the market. And so again that’s just, that’s just a huge buy signal. Okay? And there were others as well. But there are some big things you key off of. That’s some of them. Today again a great day today. Dow Jones today up 9/10 of 1%.

S500 up 8/10. Rusty,000 up 1.7% today bought through the 200 day. It hit the 200 day moving average on this last attempt to break out of it and today it just charged through it. And by the way, Rust 2000 is the best looking chart there is because everything else is getting extremely robot. I’ll talk more of that in just a moment. NASDAQ today up almost 1%. Semi State did not lead but still up 8% tenths 1%. Again they’ve been, they’ve been rocking and rolling.

[00:06:08]:
It’s okay to take a bit of a day off today if you’re the semiconductors. And this morning’s letter updated you on what’s going on with the market, where we stand on our major indexes, some of our leading stocks. And look, we’re there. Okay, we, we were, we were almost. When I wrote this morning, we were already at heavily overbought to extreme or bought. And now we’re there. So this is the, the, this is when I get to be unpopular Kip and tell you that this is not the time you put new money to work. As tempting as it’s going to be, as tempting as it’s going to be, look, and if you want to do it, hey, it’s your money.

More power to you. But this is when my life has taught me to, to not maybe take profits. Look, if you’re a short term trader, maybe that’s what you do. But we are hitting extreme overbought. We’re not an extreme robot on steroids. Almost overbought designation. We’re not there yet but we’re kind of there. We’re kind of there but give you an example.

I’ll walk you through this. Just an audio format here. If Tyler’s doing the podcast he’d show right on the screen. I’ll get there. I’ll get there one of these days. I’m usually lagging toddler about by a few months to a few years when it comes to technology but I’ll get there. But on the semi the most important chart there is the semis. Right.

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Smh here’s where we are. First of all we’re not even yet at an all time high. All time high was July of last year. I, I we remembered like yesterday because that’s, that’s when things started going down and if we paid more attention to it and we talk about every day. So frustrating. I’ve done this so long and I still make rookie mistakes and that was one that I made last year when the semi started going down. It was, it was quick. And then they did it again in the fall.

Right. They started going down in December, January and that told us the market was going to go lower. That was the tariff thing happened. Okay, that feels like years ago, doesn’t it? But anyway, back to the semis. So we’re almost at all time highs of the semis now. RSI Extreme Overbought MACD Two ways to read this. We did just get a new buy signal on macd but it’s super extended. I frankly have to think you call this extreme overbought as well.

Although I like that new buy signal. Stochastics. That’s our shortest term of minimum oscillator. It’s the first one to usually top out. Is it 98. That’s extreme overbought for sure. Money flows are a smidge away from being extreme robot but it hit, actually hit that yesterday and now it backed off a little bit. So that’s a, you know, my guess is tomorrow we’ll be through it.

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What does that tell? Added all up. What does it tell us Kip? It tells us that the semiconductors are on the verge, on the very verge of hitting our most overbought designation of extreme overbought on steroids. That is when bad things happen. Now it doesn’t mean bad things have to happen. It’s just when bad things do happen. You know in, in your biggest full markets it’s, it’s pretty common to see this kind of overbought status kick in and then they, the market just keeps going and that’s your strongest bull market of all. I kind of think that’s what we’re going to do here. That’s why we’re not taking profits.

Just to be, to be honest with you. That’s not, that’s why we’re not taking profits. But we’re also going to pause our buying and we paused our buying in the semis here and for us that’s Nvidia. Right. But when you pause your buying in semis because the semis lead, you have to be careful what that message tells you. Okay, let’s go to the list though because there again there, there, there’s, there are some groups like small caps, iwm, you look at this chart and now we have, we have a breakthrough, the 200. We want to see that hold, it just broke through today. Pretty nice, pretty green candle.

We want to see that hold because it tried to do this also on June 10th and it was met with a wall of selling. Right. So we just broke through the 200 day. But, but now the 50 day moving average is beginning to curl up. We’re going to get our first Golden Cross buy signal in small caps likely in the next two or three trading days. That’s the 50 over the hundred day and then it’ll take some time to get over the 50 over the 200 day. But these are, this is what’s building beneath the surface. Right, but the key for small caps is there, there, there’s no one here, there’s no, we have none of our momentum oscillators that are even approaching heavily overbought, much lower.

[00:10:28]:
Stochastics is 83. So it’s approaching. But we point being a serious, serious room to run for small caps here. The question is going to be could you buy the small cap if the rest of the market’s topping out and possibly reversing? The answer to that is no. So again I think that what we’re going to do is here, we’re going to pause our buying, we’re going to wait for, look, we’ll just let our gains continue to build. We’re well positioned, there’s no reason to do anything and if we get a bit of a shakeout then that’s when we look to add some positions and we are looking closely at small caps for a couple of different plays here. And then you know, honestly on a big pullback we’d add we have a couple more tech positions. We want to add.

But what we do here, we’d limit the portfolio to no more than about 15 positions. We’ve been 16, 17, prefer to keep it capped at 15. Why do we do that? Because we want everybody to be able to buy every position. We recommend 15 positions. If you have a decent sized portfolio, you could, you could buy 50 positions with a $20,000 portfolio and we kind of structure everything we do. Honestly, for the $20,000 investor, that should probably be upgraded now to 50 with inflation. 50 or 100,000. Right.

But honestly, if you got 25, $50,000, you absolutely, with that question, can buy all 15 positions. One of the most common conversations, I should talk about this more frankly. One of the most common, common conversations we have with people is people that try to pick what are your top five stocks? I’m not going to do that for you. Not number one. I suck at it. If I tell you my top five stocks, it’d be the bottom ten that perform well. I just, I, I, I, this is why I never ever did business with family and friends. I just didn’t.

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Because I, I, I, I’m horrible. Giving individual advice to the people I care most about. Horrible at it. And that’s not uncommon, by the way. All right. It’s just the way the universe works. I don’t know why that is. It’s bizarre.

But if you, if you buy all 15 positions, you know what you’re going to find out why we beat the market 18 last 21 years. You can understand why we put up such monster returns in some off years, you know, a couple hundred percent. Couple times we’ve had, you know, again, many, many years, 40, 50, 67% returns. So, and that’s because we buy, you want to buy every position. And I think a lot of people don’t like to hear that. I understand that you want to have only the biggest home runs. Probably I don’t know what those are. I think I do.

And then it turns out not to be a case. So that’s the bottom line of the market. We’re definitely at it heavily overbought. We’re kind of at extreme overbought and we’re nearing and we are there now for the semis. And again, it’ sell signal. Unless you’re a very short term trader. And I’m trying to think back the number of times I’ve had this conversation, the number of times I said this on a podcast. It’s not popular.

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People don’t want the party to end and then invariably something happens. It’s when it is when bad things happen. But I’m not saying to sell this party, this, this longer term, medium to longer term bull market is think about the people that are still, again I just told you about people that are still scared to debt, people that are in money markets. We know that because the record is 7.3 trillion. Right. It’s probably at 7.5. Now we know from these cinnamon surveys, as Tyler just reminded me, the AAI investor sentiment survey this week. Right.

That was from. We got that last night. It still has more bears than bulls. Can you imagine this kind of a move still has more bears than bulls? Yeah, I can imagine because I feel like I talk to these people every day. Again, people are scared to death about any number of things. So, you know, unfortunately, and again I have to tell you from experience, I feel like this is about to happen. We’re going to get a whole lot of money that comes off the sidelines. Now that we’re back to all time highs and money’s going to plow in.

I hope that it works out great for everybody. I hope we just keep going. I hope it’s just like 2020 where we had a V shaped bottom and we got back to all time highs and just kept going. I really want that to be the case. I’ve just learned again to, to, to, to, to trust and respect the system. All right, so that’s what I’m telling you here. It’s not a sell signal, but we are definitely pausing our buying. And then look, we’ll have our shopping list ready.

[00:14:42]:
We get a pullback. If you don’t get a pullback, we’re good. I just hope this is one of those times or so many. So much money comes off the sidelines and plows in and then something bad, something trade happens. Right? I mean any number you list a hundred things that could go wrong that could sink the market by 10% in a week. Okay. And, and if I listed them, it would be 101. It’d be the one I didn’t list.

It would happen again. That’s the way the markets work. But look, it’s been a great run. There’s some great looking chart setups. Really would love to see a shakeout here. Not sure we’re going to get it again, but we, we have a laundry list of about three positions we want to, we want to build here, want to add. So if we could get one more good shakeout before Q2 earnings. All right.

This has been one of our big things. We’re getting Ready for market’s front running this now. That’s what’s happening because Q2 earnings are going to be dynamic. Okay, I, I’ll be, if I’m shy, I’ll be, I’ll be shocked if I’m wrong about this because we told you the fourth quarter earnings were going to be fantastic. They were 16, we told you. Q and earnings. Trade, trade, trade, trade. Tariff, Derek, tariff.

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We told you to ignore it. Q1 earnings coming in about 12% growth and then there’s been a lot of front running of these tariffs. It’d be a lot of activity in the economy. We’ll see how that shakes out for the actual gdp. But look, the markets are always discounting and what they’re discounting now is no war, they’re just counting, no inflation. Jay Powell is so very wrong. If you fired him, it would just be an upheaval in the markets. It wouldn’t do anything.

You really can’t fire him. I’d love for him to. He should be fired. This is completely political. He’s the worst Fed chair of our times. Trump. Trump’s not going to fire him. But the news has already started.

A shadow Fed chair is going to be appointed and the markets will start listening to him over Jay Powell because Jay Powell just won’t comment, right? And then this, the shadow Fed chair is going to be talking about is telling us the truth. This is where we should be. This is where 10 year should be based on the fed funds rate should be here, right? And the market will start listening to that guy knowing he’s about to be running the Federal Reserve. And so Jay Powell, honestly, he should resign. He should resign. That’s how bad of a. If he had any pro, if he had any ability to be, to understand that the markets would, look, his reputation would actually go up over years if he resigned and they go, look, it’s just he wasn’t the man for the job. Look, he screwed up too many times but he did the right thing and he resigned.

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And he seemed like a nice enough guy, right? I sincerely doubt that’s going to happen. He has no self awareness. He has very, very little self awareness. And again I kind of like the guys. He seems like a nice enough guy but who knows what he really liked. But he’s just been a horrible fetch here. So again, no war, no inflation. Q2 earnings on the way again from all the reports today, Trump spent time on this, talking in another.

He’s in front of the camera all the time. It’s just amazing about the bbb, Big, beautiful bill. This sounds like that’s going to pass prior to July 4th. That’s what his goal was. That’s what he wanted. He tends to get what he. And when you set goals, it’s interesting how things happen. Right.

And so that, that looks like it’s going to pass. I’d say 65, 35. It’s going to pass before his deadline July 4th. If not, before they go to congressional recess, which is like early August. Fed rate cuts, they’re coming. But you know, again, Powell should be doing it now. Will it happen in July? I don’t know. It should.

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It probably won’t because then you have to look like he’s wrong. He’s back. Jpow is back, begging to see signs of inflation. You can tell he’s desperate to see inflation rooting against our own country. We could be saving hundreds of billions of dollars in interest payments. But that can’t happen because one guy is saying we may have a little inflation. But Jay Powell, you said it’s going to be pass through. Oh, it’ll be pass through.

But still, what if, what if, what if didn’t raise rates? Trump’s exactly right. If we have inflation, fine, raise rates. Deal with it then. What happened to you being data dependent? That’s how you know these guys are stone cold liars, something they stick to forever. They can just turn on a dime and make up something new. And that’s what Powell’s doing here. And again, he should be ashamed of himself. Worst Federator of our times.

Not a close second is Jay Powell. And so again, the other so federates are coming. And yes, we are in Trump 2.0. Yes, we are in the roaring 2020s. Yes, this is the innovation revolution. Yes, our five big bribe megatrends are all working. We’re working on something now, by the way, I’ll just tell you, we’re working on an addendum to Big Bribe. I think, I think Tom wants to call it big bribe 2.0, which I kind of like.

[00:19:19]:
And, you know, we’re going to, we’re going to kind of recap what we said in the Big Bribe because, folks, every single, every one of our megatrends is playing out again. This book was from three years ago, started writing it four years ago. And so we’ve got, we got some things that we think we’re doing. The book, an addendum, you know, next up, right? What do we see happening into 2030? Because again, that’s, that’s five years from now. And it’s going to go by like that. I can’t believe it’s been three years since we wrote this book. I mean, we know how fast time flies, right? But all of this add up is it’s go time for stocks. And that’s what we’ve been telling you, you know, from the, from the April 7 lows.

It was a great buying opportunity, but it was also the end of a disaster because Trump doesn’t get everything right. And he got the tariff thing exactly wrong. His launch was reckless, it was irresponsible, it was pathetic is what it was. Okay? And he knew it. He knew it because he flipped on a dime and just reversed policy, right? Didn’t take him an entire day to do it. Because the market was going to crash. There’s no doubt about it. The market was going to crash.

Had he not come out and put a pause, 90 day pause on the, on the putting the tariffs into place. Market was going to crash. But all that’s behind us now because Trump reads the room better than anybody else. And when he has no problem now, he’ll never admit he made a mistake. But, but his policy change or course direction change tells you. Yeah, he recognized it. Well, that’s the way it’s supposed to work, right? Not everything does work and that’s what makes him so great, honestly does. And then the big thing now, again, this has been our theme now for some time.

[00:20:56]:
Look, it’s happened in the 10 year, 10 years now down to 4.25% yield, right? And we’ve been telling you rates are going to go lower. They’re going a lot lower. The 10 year will be below 4% soon and just keep going because we have no inflation, we have disinflation. That’s what the innovation revolution is going to bring even more of China exporting pure deflation. Europe now doing the same. This, this Trump’s. The genius of Trump’s tariffs is that all their economies are in upheaval and they’re just trying to sell stuff and just drop in prices. Well, that’s great for the global economy, but you know, again, at some point disinflation could turn into deflation.

Look at China right now. And Jay Powell should be thinking about this because the dirtiest word for a banker is deflation. That’s when debt stops working and starts going the other way. And that’s the last thing a banker wants. So Jay Powell, you know, wake up, man. You know, do you really want deflation? I don’t think you do, but we’re Going to have disinflation for years. Prices are going to keep falling for years. And that’s what AI Innovation revolution is all going to do is what, that’s what innovation does.

Okay, so again, all these reasons to be bullish, you know, medium, long term, yeah, we’re overbought now, but it’s okay. I don’t know, we may not even get a shakeout. I’m just trying to be honest with you. I just know this is when bad things happen. We’re getting very close to being that level of overbought. But man, once, once mortgage rate starts coming down, we’ll get to, we’ll get down to five, five and a half percent mortgage rate. We’re like seven now. Below that, below that.

[00:22:29]:
And when that happens, once we break six and then we get down to the mid fives, people, this money is going to start flowing into housing. It’s, it’s that close right now. There’s so much money tied up in housing. Again, 40% of homeowners on their home with no mortgage on. Think about that. 40% of the country owns a home, has no mortgage on their home. What do you hear that in the media? Who, who do you, who do you hear talk about nobody? Because it’s not, it’s good news. They can’t spin it right.

The propaganda doesn’t work that way. Turn off your TVs folks, all it’s going to do is hurt you. And just listen to this podcast and you’re good to go, right? Read our daily letters, listen to our podcast. You’re, you’re welcome. You’re good to go. That’s a joke. So again, that money tied up in home, in homes and equity is going to come flooding not just into the stock market, it’s going to come flooding into the economy. Okay? And again, we got a melt up economy on our hands.

That’s what’s really, that’s why Jay Powell doesn’t want to cut rates because he knows all he’s got to do is give Trump a boost. And the US economy is runaway strong. Right? That’s what he released. That’s the truth of it. Not political. You are such a fraud. It’s completely political and you always know it. The tell.

[00:23:52]:
It’s when he keeps looking in the camera and looking across the room at these pressers. He does and he goes, the most important thing for us is getting our job, right? That’s the most important thing for us because so many people rely on us that he’s selling it too hard, isn’t he folks? That’s a tell. He’s selling it way too hard. Okay, let’s look on the hood today. It’s a very good day today all around. Internals are fantastic as well. 3 to 1 advanced decline, NASDAQ 4 4.4 to 1 advanced decline NYSE. And I gotta tell you something, another pet peeve of mine.

These people, God, I still want to name names. These people that keep trying to rationalize these internals. Never rationalize data. You can have your phone with it and kind of tear it apart. But this, these internals are there for a reason. And people are trying to say, well, the only reason that the internals are good is because a few stocks are leaving. The only reason the internals are good is because penny stocks are going up. That’s where all the volume is coming from.

None of that matters whatsoever. The internals are the eternals. Live with it. You don’t complain about it when it’s going in your favor. Stop complaining about it when all those bulls are making a lot of money in the market. Okay, decline today again, really good numbers. Volume today 80% upside volume NYSE 72% NASDAQ. We’re getting on the.

[00:25:11]:
We’re getting close to having 90% of volume days, folks. We’re getting very close to that. I just hope we have a little shakeout first so we can get a couple more positions. But. And we had 326 stocks at a 52 week high. Just 114 at a 52E low. And our sector watch today, boom again. 9 of 11.

It should be 1111. These two sectors that were down or barely down 911 higher officially. Communication services up 1.7% again. That’s tech really energy bouncing back today up one and a half percent to the downside. I said we have nothing really. Real estate down 4/10 1%. And that’s, that’s absolutely nothing. Probably people still selling the New York real estate, the New York REITs, because of this.

The socialist that may. I think this is socialist in New York won’t come close to sniffing the mayor’s job. I think that’s not going to happen. I think it’s a wake up call. But I put the odds that this Guy wins at 25%. 25% because you talk about a propaganda machine that’s about to be unleashed on this guy. Wait till you find a dirt. They’re gonna, they’re gonna find out about this guy.

[00:26:18]:
Oh my God. He won’t come close to winning. They’ll, they’ll put some puppet in and maybe, maybe the current guides looks a lot better than this, this Muslim that they’re trying to get an office. Who knows. But I think the odds of him getting winning are slim to numbers. Again, it’s a good, it’s a wicked call that matters. That’s good. It’ll, it’ll, it’ll draw a lot of attention to why we don’t want a socialist anywhere near anything that we do in life.

Because it only ends one way. That’s them getting wealthy and you getting broke. That’s just the way it works. And that’s why they hate the downside sizing of government so much. And what Trump is doing, what Doge did so they had tried to destroy Elon Musk. Right? We know all that. What else today, commodity watch today kind of flat today, gold today, I mean up fractionally 3342 an ounce. Silver today also up barely at 36, 64 an ounce.

Copper a date flat is back over $5 a pound. 5.03 a pound. That copper’s chart looks fantastic. Dr. Copper is telling us what the global economy is doing. And that’s by the way, why we like oil. You know, Trump was asked today about whether or not his press secretary was asked today if they’re going to start reloading the, our national oil supply, whatever they call that. And not a lot of sleep here, folks, in bull market phases.

[00:27:41]:
I don’t sleep much. And you said, you know, we don’t. Haven’t decided. That means they probably are. But they love oil being cheap, you know, because of the inflationary component of this. Anyway, oil today, flat 60, barely 65, 24 a barrel. And finally today, bitcoin. Talk about flat.

Bitcoin’s been doing. It’s been stuck right at 107.