In today's episode, Kip discusses the recent shifts in stock market action, including the first days of back-to-back gains for the S&P 500 since its February all-time highs. He touches on the importance of the Fed's upcoming meeting and its potential impacts on the market. He also covers international all-time highs and the significance of global market trends and what they mean for US investors. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Monday afternoon everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a great day today. Hope your weekend was fantastic as well. Well, we got back to what are we going to do with ourselves? What are we going to do? Back to back days of solid gains in the market. I know. Just double check your screen to make sure everything’s updating here because it’s been a while.

Remember this, this shakeout, this now correction happened really fast. It was just mid February. We were talking about the markets being extreme overbought seasonality turning somewhat bearish. Literally. We know it was going to be this bearish. One of the fast. I think I saw the seventh fastest move from all time high to correction in history and that’s for the S&P 500. Nasdaq of course, at one point was down over 14%.

[00:00:47]:
The semis as we’ve covered here ad nauseam from their highs down 23%. Now we’ve again put up some pretty good rally since then. As a matter of fact, it was shared this morning in our letter. The semis now have been leading the market since March 1st. Talking about the relative strength ratio of the semis to the SP 500. And it’s not guesswork. It’s right there on the chart. Look, it could.

Is it a false start? Are the semis going to rally only to hit another trend line and go lower? I don’t think so. I think we’ve seen the lows because sentiment has gotten so bearish across the board, certainly with the semis as well. But you know, again, broad market, we spent what, two and a half weeks at either fear or extreme fear territory, both in the CNN Fear and Greed index and the AAII Investor Sentiment survey, which has had one of the widest spreads between bulls and bears that we’ve ever had before. So it’s been a brutal shakeout. As Tyler reminded me for this podcast, we had three bear markets from 2018 to 2023. Three bear markets in five years where the average to 50 to 60% of its value each time. That’s, that’s unprecedented in case you’re wondering. No, it’s never happened before.

This one wasn’t that bad. But the average stock did get hit. Some stocks got really hit, like Tesla, like the semi. So you know, if I think for a lot of investors, including some of our positions, it feels like it was just as bad, if not worse than the previous three bear markets. But the point being this is, this is what is keeping so many investors out of the market? These kind of volatile swings. And as I said on my podcast last week, it’s the, it’s the Trump supporters, it’s the MAGA crowd that’s really been hit the worst. Because, you know, we, I think, generally speaking, expected Trump to come in with a pretty similar outline to his first term, where he focused on growing the economy, you know, getting his tax cut, regulations put in place, slashing regulation left and right. And that just drove the market on steroids.

[00:03:03]:
So after the election, you know, the markets really started almost a parabolic move higher. So there’s a lot of feel good in this market. And then we realized that Trump was dead serious about his tariff policy. And at the same time, as we communicated here with you, often has also been reported pretty widely. The messaging of his tariff policy has left a lot to be desired. And the communication of it, the implementation of it, just hasn’t been great. Look, we’re not privy to everything happening inside this administration, but with the cuts that Doge is making combined with a haphazard approach to terror policy, I think that’s a fair analysis. You know, the shakeout was on what it’s done, and I think it’s giving us an amazing, an amazing setup here.

Really do. What it’s done is it’s made the Bears extremely confident. The Bears believe they have this, this market by the short ones. And I’m telling you, I’ve seen this movie before, in Trump’s first term, every chance the Bears got, you know, they said the market was going to crash. You know, everyone on the left, which was a pretty big number at that time, that number has shrunk now, but they were just absolutely confident that Trump was going to ruin the economy and the markets. And just the opposite took place, of course, until we had Jay Powell’s eighth straight rate cuts in 2018. And then of course, we had the pandemic. But prior to that, this economy and stock market, they were both rocking.

So I think the left saw that with the tariff issues they really had. And by the way, that includes Wall street folks. We’re talking about the, you know, the ivory tower folks, the hedge funds, et cetera, on Wall street, they really think they, they got something here. They are very confident. I think we saw that in the final hour of trading today. The Dow Jones was up over 500 points. We still finished up 353. So really good back to back days.

[00:05:10]:
But we did lose 150, 160 points in the Dow Jones in the Last hour, same thing with Nasdaq was about 120 finished up 55 points and the SB 500 finished up 6/10. It had been up as much as 9/10. And Russ 2000 today, actually our leader today at 1.2% had a pretty good afternoon here. We think the small caps are so ridiculously oversold. And I, when I talk to people just from a common sense point of view about a Trump presidency and we heard some of this today from Scott Besson on Sunday, yesterday I Meet the Press from Scott Bessant, the treasury secretary. He said, listen, this is a reset. It’s a transition. We expected this to kind of be the case here.

But and here’s the key but that he added, while we don’t watch the market day to day, we’re not concerned longer term because anytime you have an administration that’s focused on cutting taxes, deregulation and lower energy prices, your economy is going to do really, really well. And I thought it was just a great summation. This is how we view it, how we view the Trump presidency. You had the Doge cuts and the tariff. The approach to tariffs has been an issue. But if you look at this market from the point of view of being a correction, that’s also the point that Bezit made to meet the Press. Since corrections are a healthy part of every bull market, it sounds like something we’ve written that many times. And again, just to repeat this for our long term listeners for our new ones, maybe you haven’t heard it before, but we’ve equated this bull market most similarly to the bull market of 1995 to 2000.

The.com melt up and there were five corrections in that bull market, including one one bear market, five corrections of 10 to 20% and a bear market of over 30% in NASDAQ. But the interesting thing was each one of those declines from all time high to correction again, more than 10%. Each one of those took place in three to four months and then it was over very quickly and back to fresh all time highs again. I think that’s the playbook here. And I think that that’s what we have here. We have a really good reset. It’s certainly shaken out all the, the, you know, the, if you will, the, the weekends, the sellers, so many people have capitulated. Can’t take it.

[00:07:35]:
I get it. Can’t take it anymore. You lose 10% in your 401k, I’m out. Right? That’s your, that’s your serious money and that can’t happen. I think that message got to Trump. Matter of fact, I’m pretty sure that it has. Because when Trump and investment say that they don’t watch the market, when as investment said, I’m not concerned with a little bit of volatility, that’s not what we had, all right? We had a skyrocketing vix and a three week almost waterfall decline certainly in many tech names. And so that’s not a, that’s not a, it’s not, it’s not just a little bit of volatility.

Obviously Trump and Bessant know this. I think the point they’re trying to make is we’re committed to this policy. Everything’s going to be just fine. Take a chill pill, let us do our job, all right? I just think there’s a happy medium there. So it’s been very refreshing over the last, I would say four, five, six days. Every day you’re getting multiple people out in the mainstream media and on the financial networks, cnbc, Bloomberg, et cetera, Fox Business. And they’re talking about how this policy works, why the tariff policy, why it’s so important to have the doge cuts that we’re having. And yes, it’s a transition and it’s going to bring a little bit of a people with it.

But, but it’s at the backside that we want to stay focused on. And that is our approach here. You know, we, we’re medium to long term investors, we’re position builders, we use ETF to trade around that. But I will tell you, as I wrote this morning, there is just no way that Tyler and I would short US markets here. Just, just no way. Here’s why this is a big week. It’s a big week for US markets. We have the Fed meeting on Tuesday and Wednesday, of course, Wednesday at 2pm we minutes and then following that 30 minutes later we’ll get Jay Powell’s oppressor, which you never know what to expect from Jay Powell.

[00:09:22]:
But with the retail sales numbers we got this morning, the fact that oil is back to $67 a barrel, last week we had friendly, very friendly CPI and PPI inflation reports. And now the retail sales figure this morning. This economy is clearly slowing. There’s just no question about it. The economy is slowing, but again, how much is it slowing? And we think very little. Okay, yeah, there’ll be a transition because so many government workers are losing their jobs. But guess where they could get hired? They’re going to get hired by the real economy, not the fake government job. Economy.

And again, I know there are a lot of folks have government jobs, do a great job. I’m saying that there’s so much waste, fraud and abuse in this. And I think we pretty much all agree with this. Those folks are talented people, they’ve got good resumes, worked for the government for how many years and now they’ll be able to be hired by companies that are participating in the innovation revolution. And these are our core macro trends that we’ve been talking with you here for the last two and a half years since we wrote the Big Bribe, our five megatrends again, including the innovation revolution. And now a rebirth, if you will, a restructuring of the American economy to get back to an economy that focuses on manufacturing, that focuses on empowering and enriching the middle class. Where’s that message been? Okay, People getting wealthy have been in tech or finance. That’s been our new model.

And all of it done in manufacturing is lose jobs and send them overseas. Once we regain that ability to manufacture and produce the United States with those high paying jobs that come with it, this, you won’t be able to stop this economy. It’s going to be a melt up bull market, which remember, it really has been for two and a half years. Okay. We just had this unexpected shakeout in early in Trump’s first term. But we continue to look at this as a buy the dip opportunity. We’ve had a few of those so far. Every one of those has worked.

[00:11:23]:
It’s been the most significant and smartest of smart money strategies by the dip. This one, this, we may have just seen the lowest prices in Trump’s administration. I really, I think, I think we’re either there or very close to it. We’ll see how much more fight the bears have left in them. I think the bears are going to be trapped here. I think it’s a bear trap. I think that Trump knows, okay, you know what? A 10% correction. Let’s probably pump the brakes a little bit.

Let’s now focus on the good news of this economy and what we’re going to do to get GDP growing again. Right? I think you can do both. I think you could do both. And I think he’s smart enough to realize, yes, you can do both. Because listen, if, if what we’re hearing from you and from our subscribers and clients all over the US if, if what we’re hearing is what the administration’s hearing, then they’re getting, they’re getting, they’re getting comments of we’re scared. This is, this was Too much, too soon. What have you missed? Do the bears have control of this? Are we going into a bear market? Are we going to have negative GDP and a potential recession? That’s the kind of talk that Trump does not want to hear. That’s the kind of talk that I can promise you, Scott Besant and Howard Lutnick, the Commerce Secretary, they don’t want to hear that.

So squeaky wheel gets the grease. I think that message has been effectively delivered. Again, we can see it by the appearances we’re seeing on TV across every publishing medium that they get it. But they’re not worried. I don’t think they should be worried. I think the bears are trapped. And again, I think the Fed meeting this week, Tuesday and Wednesday is going to be key. We started talking about this last week.

[00:13:05]:
I believe we’re now witnessing front running of two things. Front running of the Fed meeting and front running of Q1 earnings, which we’re going to kick off here in just under three weeks with the banks. Right. So the markets front run very quickly now. They get ahead of it. And if I’m short, I’m very worried about getting squeezed, squeezed hard. Because the Fed, we’re going to find out on Wednesday afternoon with the FOMC statement and the Fed minutes, we’re going to find out how good Scott Bessant is at his job. Let me just make a note of that because I want to write this up in the morning.

It’s such a key point, in my opinion, because this is the Treasury Secretary’s job. This is his job to manage what’s happening in the financial markets and to manage the messaging and strategy of the Federal Reserve. It’s not Trump’s job. Remember, Trump did that in his first term. Got him in trouble. It’s very hard, okay? Even if you’re Trump, and I know no one that wants to take Trump on because you’re probably going to lose that battle. He’s just a bulldog that doesn’t stop and he’s got the brains and wits to go with it. But what didn’t work in Trump’s first term was battling the Federal Reserve.

That was a nightmare. And Americans paid the price for it. Remember, we had the Christmas from hell, fourth quarter from hell in 2018, eight strike rate hikes. Those did not have to happen. That was the Fed and Jay Powell saying, oh, you think you can talk shit about us in the financial media? If they can go out day after day after day and say, Jay Powell’s horrible, Jay Powell’s horrible, here’s what they got to be doing, demanding what the Fed should do, that did not work because the Federal Reserve is part of the most powerful cartel on the planet, the banking cartel. There is, there are seven cartels. There is no cartel more powerful than the money cartel. And Trump learned that lesson in 2018, I believe.

[00:14:59]:
So you noticed in this term so far now, he might have said here and there, we think rates should be lower, we think they should be cutting rate. But he’s been very quiet about this and I got to tell you, I give him a golf clap for that. And congratulations to Rory McElroy for winning the Players Championship today. But I got to give Trump credit for letting Scott Besant do his job, which is to communicate and work on messaging with the Federal Reserve because I repeat, with the inflation data showing that we clearly have disinflation and Trump’s tariffs, any inflation, look, we only, we only, our imports only make up 13% of US GDP. So even if all 13% of those had massive tariffs tied to them, it’s such a small percentage that you’re not going to see that reflect in the broader inflation data, especially when you see what’s happening again. Ten year yields are collapsing, okay, down to 4.3% now. And look, if the economy is slowing, and again, we, we can see that it is temporarily, I, I don’t think it’s going to be much beyond a quarter or two. Again, that’s disinflationary as well.

So the Fed has to see this. If, if Trump, if, if, if Bess has been doing his job, then he’s having private conversations with Jay Powell and they’re on the same page, meaning the Federal Reserve actually wants to help Trump. We’ll see about that. That might be a first, but we’ll see about that. Because this is the Fed meeting Wednesday afternoon where we’re going to learn that truth. Because I’ll tell you straight up, if the Federal Reserve doesn’t come out, and if they’re not dovish, I’m not talking about, oh, we’re going to cut rates today, economy slowing, we’re going to go back into cut, we may cut three to five times this year and that’s about being that dovish. But if the Fed doesn’t send a very dovish message to the markets, then I think we have to be concerned. Because I can promise you this, if a Democrat were president today, they would have already started cutting rates.

They wouldn’t be waiting for this meeting. It would have already happened. Right. They would have resumed, I should say, Resume cutting rates. So again we’ll find out how good Scott best in his job because J Pal message should be dovish on Wednesday and on Wednesday, and this is our call, they’ll either halt quantitative tightening. Right. Basically selling the bonds back to the public that they’ve acquired. They’ll either halt their quantitative tightening program this Wednesday or they’ll start messaging saying it’s coming, meaning likely in the next month’s meeting.

[00:17:50]:
So these are bullish events for the market. Don’t fight the tape, don’t fight the Fed. We don’t want to be fighting the Fed. For sure, the Fed should be cutting rates again. Inflation disinflation continues to build. China is exporting deflation. So is Europe to the United States. And again, these are countries all love to use their their a weaker currency.

Right. Another form of tariff against the United States. Again, Trump’s not putting up that either. Have you seen the dollar? Yeah, it’s going down. Right. That’s what Trump wants. Again, Trump wants a strong dollar policy, meaning that we must keep the US Dollar as the world’s reserve currency. Trump, Trump has said there is no if, ands or buts about that.

That must be the case. But people confuse that. We’re thinking that Trump wanted the dollar to be strong, that he does not want that he does not want a strong dollar policy. He wants again the dollar to maintain its global reserve status, but he does not want a strong dollar versus foreign currencies. Right. Again, it’s another form of really it’s not a tariff, but it’ against the U.S. u.S. Consumers and U.S.

[00:18:59]:
companies. So the dollar’s going lower. We called that at the beginning of the year. As you’ll remember, rates are going lower. That’s also been a big call of hours. We think those moves will continue now. They’re both a little too oversold now. Wouldn’t be surprised to see a little bit of a bounce back.

That’s kind of what we had. But those, those downtrends should continue throughout this year. With the 10 year dropping below 4% this year and the dollar continuing to move low, we think the highs are in for the dollar. And by the way, yeah, that’s very good news. Professionals, metals and miners as well. Talk about that more in just a moment. They’re just continue to break out very investing system. We sit right now at 8 of 12 screens.

Bullish. It won’t take much to get back to nine or ten screens. Bullish. We’ve had some technical damage done. Number one, the semis have been leading Lower. So we need that to change. And we’ve had a lot of very weak smart money hours. These are some of our market timing signals that we, that are built into your investing system.

[00:19:56]:
Right. So that’s all changing now. Again, the semis have been leading higher since March 1st, as you probably have noticed, and I know we have, we need to see much more of that. And again, we want to see more strong smart money hours and we want to see better internals. And by the way, as you’ll find out in a moment, Tyler covers. On Friday we had a 91% up volume day. On Friday we get another one of those and you have a, you have a breath thrust. Okay, for all you technicians out there, we almost got it today by the way.

Today NYSE up volume was 86.3% again Friday, 91%. Been a long time since we’ve had a breath thrust again. Two days, a back to back up volume day on NYC of more than 90%. But these are fantastic back to back days again. I would not be short here. If you’re short, I’d be very nervous for you. Okay, so just a couple other reasons that we’re bullish here. Again, we talked about a minute ago.

Investor sentiment still sits in extreme fear. That’s a significant contrarian buy signal. Especially this is. If this is what we think it is, a garden variety correction, then this is a big buy signal. Also, seasonality has now flipped from bearish to bullish. All right. Matter of fact, highly bullish at this point. You know this March and April tend to be very good month for the market.

[00:21:18]:
And now we’ve had this shakeout. You see this setup here looks perfect. And never forget, this is such a key point. We’ve been talking about this with you pretty much every day. Global markets continue to ramp higher. Just to. Tyler just reminded me, the dax. Germany’s.

Germany’s DAX and the Nikkei both hit all time highs. Nikkei, first time since 1994. 1996 I think Tyler said. I should remember that. That was a brutal bear market for Japanese stocks after they we’re supposed to conquer the world, right? And take over the US et cetera. Did not happen. Did was a 30 year bear market in housing. It was a brutal, brutal bear market for housing and for Japanese stocks.

Now they’re back there. The point being when the US stocks remember, we lead, okay? We lead in both directions. But when we’re not leading, the global markets don’t follow us. Lower. I can’t tell you what a key point that is from a, an investing and a trading point of view. Tyler said yesterday this is essentially been another rotation since we the bull market started October 2022. This bull market has been characterized by a rotational theme. So we never have huge shakeouts.

[00:22:35]:
We have rotations from one sector to another. That’s essentially what’s just happened here. US Markets have gone lower, but the money hasn’t left the market. It’s gone to Europe, it’s gone to China. Again, Chinese tech stocks are on fire. Okay, same thing with most European stocks now again. So, but, but, but if US markets were leading lower as a sign of further losses to come, I can promise you this Chinese stocks and European stocks would not still be going up. So this is a very key point here.

And again it, it, it tells us that we’re looking theme again and it is a short term US centric correction, only very short term in nature. So we are bullish here looking for a significant move higher to be led by semis and tech. And again as some of the money comes back also to the US from going overseas, I got a problem with we own Chinese tech stocks. Hey, keep going higher. We don’t own any European stocks because again they’re so oversold. I mean they’ve been oversold for two decades. So yeah, keep going, good for you. But unless they get red pilled, there is a near zero chance that European economies will be able to compete with US Economies.

A socialist system versus a free market capitalist system, it’s a slam dunk and it’s another reason that the US Economy is going to do so. I’ll repeat this. We have not changed our forecast. We believe that within 12 to 18 months of Trump’s presidency that US GDP growth will hit 5% plus haven’t changed it. It’s still our view. Again we look at this as a shakeout and as a buying opportunity. We think the Fed meeting is going to continue to be front ran. So we look for gains tomorrow and Wednesday and then we may have the bears may try to take one last shot at this market but we’re going to be buyers of dips on that.

[00:24:37]:
And we’ll be watching the things we just shared with you, the semis, watching the internals, watching the smart money hour, some of the leadership names. That is what we’re looking for. All right, let’s take a look on the hood today. Again this is another good day today for the internals. Across the board we had 4 to 1 advanced decline for NYC that 5 to 1 on Friday. These are great back to back days folks. We also had. Nasdaq was up almost 3 to 1, 2.7 to 1.

Positive advanced decline again very strong reading. As I said a minute ago, 86.3% of volume day free. NYC tagged with 91% from Friday. These are very, these are the strongest back to back days we’ve had in quite some time. And Nasdaq solid, not as great as NYC but still solid. 63.8% of volume. Today we had did have about 50 more stocks hitting a 52 week low than 52 week high. That really, that doesn’t concern us whatsoever.

Sector watch just like Friday, very very strong today we had all but one finished higher of the day. I believe that was the same thing on Friday we met. We may have had all 11 sectors higher on Friday. But to the upside today. Real estate up 1.7%. Housing is dirt cheap. Okay, the housing stocks are ready to really run here especially as as as rates continue to fall. Energy today recouping some of its losses up 1.5% today we had what six sectors up more than 6% today only consumer discretionary down only by 4/10 of 1%.

[00:26:04]:
And a commodity watch. And where it starts getting fun. Look, you know if you’ve noticed at all, if you know anything about us, you know that we’ve been gold bucks for a very long time. And man, man is that ever the case now. Right? And by the way look at the charts of these things. They are just not even overbought yet. Let me just pull up because gold was up today. Let me pull this up real quick.

Yeah, we’re not even. We’re not even. We’re. We’re starting to hit heavily overbought on gold but nowhere near extreme overbought. The move’s got. In other words, moose got room to run on GDX. The minor ETF hit another 52. Kai today again the miners are trying to go parabolic here.

GDX is beginning to hit extreme overbought levels. Is it a reason to sell? Absolutely not. It might be a reason to pause some buying but you know. But not the junior miners. All right. We own a. We have a couple of junior minor positions that are really starting to rock and roll now. And we use a monthly dollar cost for these.

[00:27:10]:
So yeah, they’re a little overbought now but these stocks are so cheap. Talking multi decade lows on the junior miners compared to the senior miners. And if you take a look at gdxj, the junior minor ETF has been Outperforming for GDX now for quite some time. That’s a buy signal for this group and we saw it again today. GDX today was up over 2% today. The junior miners GDXJ up 2.7% today. And gold today also higher by 5 about by half percent. Let me give you the details here.

Gold today up. Here we go. Yeah. Gold up today 14 to 1%. Up nine bucks announced at 3010 announced again. First time ever close over 3,000 on Friday. Our year end target remains $4,000 announced silver today soft today only by two pennies. 34 3,441 an ounce.

Copper today almost back to five bucks a pound. What a great story. Copper is $4.97 a pound on copper. Crude oil today bouncing back up 36 cents a barrel at 67.27. And finally on the day, bitcoin trying to bounce back here. Just over 84,000 now. Chart still looks good. Been a broad range pattern here.

[00:28:41]:
You lot of excitement was built into us having a, you know, a bitcoin, a Federal Reserve, a treasury position in bitcoin that just hasn’t. That takes congressional action. I think some people are disappointed it didn’t happen immediately. But we are using this dip as a buying opportunity. Without question. Looks very good on the charts again. Last trade, 84,000. Just over 84,000 on Bitcoin.

All right folks, that’s it for the day. Hope you had a great day and even better night. We look forward to seeing you back here again tomorrow after the close.