In today's episode, Kip breaks down the strong day for stocks and explains why he believes we are in the early stages of a bull market. He also explores the bullish outlook on Bitcoin, Tesla, gold, and gold miners, spotlighting their current performance and future potential. Lastly, don't miss the discussion on the potential impact of upcoming elections and economic data on market sentiment.

Don’t look back. The market is closed. Good Monday afternoon, everyone. Kip Herriage here with the VRA investing podcast. Hope you had a good day today. Much better day today than we had last week because it was not. Today actually went out to be a very good day.

Kind of surprised me because look, Friday’s action was so pathetic. And again, we’re in negative seasonality. September is the worst month of the year. Typically, though, it is the second half of September that’s worse than the first half. But a little inverted this time. And we were looking for, we want, we wanted a lower open this morning. We wanted a lower open because we want to add a very specific position in the semiconductors and we didn’t get it. You know, futures are higher this morning at the open.

Those typically don’t hold. Those gains typically don’t hold. The professional investors fade that a higher open and didn’t happen today. Matter of fact, if you faded it, you got your head heated to you. So this was a very interesting day today. Let’s cover it real quick. Dow Jones up 484 points. It’s up 1.2%.

And it was all meter on the day. S. We have hundred up 1.1%. Nasdaq up 1.1%. Russ 2000 up three tenths of 1%. And the semis, let me just get a freshen. Yeah. Semi is up 2.7% today.

[00:01:28]:
Market leader Nvidia, also a big today, up 4% at 107. But again, if you’re with us in the VRA, and then you saw the chart this morning, before we leave the topic, look, the semis are detail. There is no sector, no group more important to the market than the semis. And that has been the case since the birth of quantitative easing in 2008, 2009. They lead in both directions. If you get the direction, the semis right, then you’re right side of the market. Well, if you look at a chart, you’ll see that from the, really from the first 2nd week of July, the semis have gone lower. They’ve led lower.

There’ve been a couple big rallies in there, but they’ve led lower. And it really, based on our work, and I guess you live by the sword, dive by the sword. Look, the action’s not been good. And again, this group got so hot, it was a very crowded trade, so the shakeout didn’t surprise us. The first big move lower into August 5, the August 5 lows, which are a fantastic bottom. It took the semis talking about SMH and the Sox index. It sliced through the 200 day moving average. And that was it.

[00:02:54]:
Because at that time, it also hit heavily oversold. And then we had basically a period move higher over the next couple of weeks, and now we’re going back again. And as a Friday’s close, once again tested the 200 day moving average. However, it’s a higher low. So that’s been our position is that, look, seasonality has held up great all year. We warned in advance of September that here it comes. But we did not take profits. We did not sell positions.

I know Tyler and I agree on this. We both feel, even in hindsight, that that’s the right move. Because the question, the problem is once you sell and take profits, but number one, you gotta pay tax. You gotta pay tax on this gains, right? And if you’re only gonna, you know, buy back later, within a month or two, now with leverage to get ETF’s, it’s, it is a little bit of a situation, but when do you get back in? And that’s the problem. A lot of people that are more active traders get, go out of position, but then don’t get back into the position. And because our view is that we’re in a generational bull market that will continue to be led, of course, the innovation revolution that will continue to be led by semis and tech, we really want to keep a lot of exposure to this group, and we do, and the semis intact. And that’s treated us really well over the last almost two years now from the October lows of 2022. So looking at the chart now, though, again, we’ve got another retest on Friday, the 200 moving average.

[00:04:34]:
But also we’re hitting heavily oversold levels on our momentum oscillators, not quite to the level we were on August 5. That was a fantastic bottom. We were buying aggressively then. So it’s not that oversold. But I also don’t expect it to be that oversold again. This is a higher low. It’s not even a retest. It’s a retest of the 200 day, but it’s not a retest of the August 5 lows, which I don’t think we’re going to get.

So when the market took off today and then everyone, the traders, tried to fade it, that’s been a high probability trade. And that fade did not work. Then it was off the races again and again. Dow Jones up at one point over 600 points today, but still had a good smart money hour, both for tech and semis and for value stocks. So we’ll see coming off of what happened last week. SB 500 had its worst week since March of 2023. Nasdaq had its worst weekly performance since mid 2022. So these are pretty ugly declines.

That also picked up speed after the August jobs report. Another Miss reinforced fears of a slowing jobs market. And we’ve been in the camp now for, again, for, for quite a while, saying we work in a couple of years, so we’re not going to have a recession. And we stand by that. Matter of fact, that’s a high confidence call for us. And that means what we’re seeing now is an opportunity. Again, you get a lot of anxiety because we know it’s coming up, don’t we got the election coming up? They already tried to kill Trump once. What are they going to do? Was, Tyler just asked me a question a minute ago in our pre podcast meeting.

[00:06:21]:
What’s the October surprise going to be? Don’t know. I mean, it’s hard to even imagine. They’ve got something bigger in store for us and we’ve already lived through. But again, that accounts for, again, September seasonality, anxiety about the election and what these crazy lunatics that are shadow government, what are they going to try to pull to keep Trump out of winning this? And again, it’s not hard to be nervous about this. And that’s what we do have a hedge on in the bureau portfolio, which we hardly ever do, but we have a hedge on there just in case. A volatility hedge, just in case. That’s insurance. And that’s all that is.

But I think more than anything, and we touched on this a little bit in our letter this morning. We had the debate coming up tomorrow. Right? I mean, it’s funny. I’ll tell you a quick heritage family story. My wife, who has phenomenal, Cindy has phenomenal political instincts. Like, I don’t know that. I don’t know that she, I can’t remember a presidential election prediction that she’s gotten wrong. She, and often I’ll, like in 2020, when I said Trump’s, it’s a, it’s gonna be, it’s gonna be a landslide.

She’s like, no, I don’t think so. And I didn’t like hearing it because I knew how right she’s been. And now, you know, she really got off the Trump train completely and got to the point that if he was on tv, she couldn’t even watch him, so she would just leave the room, couldn’t listen to his voice, couldn’t see him. And I understand that emotion because I wasn’t far from that. Just because of the pandemic operation warp speed, the poison jabs. You know, the way he handled that, the money printing, look, I’m past that now because my guy, Ron DeSantis dropped out. So that’s no longer an option. And so, you know, obviously, we have a stark decision here to make a, and two months from now.

[00:08:35]:
Right. So long story short, Cindy told me this morning, she said, you know what? I’ve had it. She wasn’t going to watch the debate. She said, I can’t do it, still can’t watch him, can’t, I don’t want to watch, listen to either one of them. She said this morning, you know, I’ve had a change of heart. I’m going to watch the debate. It’s that important of election. So that was good to hear.

So the heritage will be watching the debate again, I’m sure, as most of you, if not all of you will. And, you know, I touched on this morning this, this, this election as much as anything. I think it’s about two things when it comes right down to it, obviously, but not factoring in whether they’ll try to steal it because we know they will. Talking about what actual voters and the actual real outcome is about, it’s about two things, in my opinion. It’s about voters voting for who they believe has their best interest at heart. He loves America and has their best interest at heart. I think that’s a pretty clear choice. I don’t even think we have an opportunist versus, well, there’s two opportunists here.

Let’s be honest about it. Trump may be the greatest opportunist of all time, but I have one thing I’ve never had a doubt about, and I think I speak for most people, is this guy loves America. He does love America. He puts the work in, he’s proven it time and again, versus a pure opportunist in Kamala Harris. And the other thing I think voters are going to be looking at, Trump’s odds of winning relies on Americans remembering his time in office, while Harris’s odds rely on Americans for getting hers because of really the pathetic decision making that they’ve had in the Biden Harris administration. But it’s important. And I’ll pose the question that I’ve been posing now for the last month to pretty much everybody at dinner parties, at having drinks, just mingling with people on the phone. People are really bearish, and there’s a lot of them.

[00:10:40]:
By the way, I must say this, all the wrong people are bearish I was going through my Twitter feed over the weekend, and I’ve got a list of about 50 people that I want to know what their views are. Right. And almost all are vocally bearish. Right. Demonstrably bearish. And these people are typically on the wrong side of the market. So that’s just an interesting observation from my Twitter account. I guess it’s x now, but I posed the question to you that I asked so many if you’re bearish, what’s your position on the market’s going to be? If Trump wins, are you still going to be bearish or are you going to flip to being bullish? And I’ve yet to speak to a single person that said, oh, no, if Trump wins, I’m going to be bullish.

So think about that. We got a lot of people that are all beared up, got their money in money market accounts, scared to death. Again, I understand all that. I’m not making fun of anyone that feels that way. I get it. We all feel that anxiety. But think about what that means for the market. And if the market is truly a discounting mechanism, the action of the next couple of months going into the election, I think it’s going to be really important to follow.

The markets are smarter than all of us. The markets see through all the noise and they get, market gets big calls. Right. All the time. So watching very closely, like days like today, watching very closely, because I think the market’s going to predict who the winner is going to be. And if you’ve noticed, the polls that matter have flipped to Trump winning, not all of them, but a couple of New York Times. What’s the deat silver? And a couple more have flipped to Trump winning, especially the swing states, which is, of course, all that really matters. Right.

[00:12:47]:
And so that’s a, that’s a, that’s a, that’s a troubling sign for the Harrison Walts campaign. I, of course, I think if Trump sticks to the script tomorrow night, he’s gonna absolutely bury her. I think that’s the expectation of most people. But she’s gonna be prepared. We have to know. She’s gonna have the questions. She will have had the questions for a week, or at least some semblance of them, and she’s going to be very prepared. So it’s going to be up to Trump just to seal the deal.

I think you’re supposed to have another one behind this. So we’ll see if that happens. But, yeah, I think, again, so much money’s on the sidelines. Trump wins. This market is going to like it did in 2016. And the market told us in advance 2016, too, didn’t it? And 2020, by the way. So we’ll keep a close eye on that. So, other than that, again, watching the semis very closely.

We own the semis. We want to add a new position to semis, actually call options. We only do this about once a year. In the VR portfolio, we have parabolic options portfolio. Of course, where we buy semi calls, tech calls, we’ll buy these all the time. In the VRA portfolio, we only put on one options trade about one options, trade a year, some years, maybe two. Most. Some years we don’t do it at all.

I’d say on average we have one options trade for the VR portfolio because we’ll do anything in VR portfolio that’ll make us money. Very eclectic portfolio, as most of you know. I believe that, and I think I speak for Tyler on this. If we can make money in something, we understand it and we see it’s something we want to buy for ourselves. That’s really what we do. Our portfolio, your portfolio is what, it’s what we own. These are our own holdings. So, you know, this is, again, I’ve done this a long time, so we don’t have a set of rules that we follow.

[00:14:41]:
So we’re only going to buy these things or these things. Not at all. Our best trades have come from things that people are like, you’re doing what, you’re doing what? So, you know, I think that, you know, when we look at SMH, again, the semi ETF, you know, this is setting up for a killer trade, just an absolutely killer trade because we’re just in the first inning or so in the AI boom and the technological revolution is taking place. Look, we have, tech companies just this year have reinvested close to $200 billion back into their own companies. You don’t have a recession in that environment. You don’t have anything other than a runaway freight train of a bull market and an incredibly strong economy that’s going through technology upgrades. Apple had their meeting today. A lot of people were saying that here we go.

The next big upgrade cycle for the iPhone is here. We’ll see. We actually don’t own Apple, but again, as Apple does, it goes, the market tends to go, although it was flat today. But yeah, this is just such a great setup for tech. And the sim eyes that, you know, these are gifts, right? This, this, these are, these pullbacks, these pauses, they are gifts for us here in, in these, in your favorite tech names, right. And so that’s how we’re treating it. And you know, look, the smartest, the smartest of smart money moves during this bull market has been by the dip. There’s not been a single strategy better than by the dip.

[00:16:22]:
And again, we’re hitting heavily oversold now to extreme oversold in tech and semis. Not, you know, not as bad elsewhere. Yeah, again, the rest of the markets held up pretty well. But yeah, this is that. We’ll look back and see this as a great opportunity. You know, look, who knows what’s going to happen in October? Again, well established, September is not a good month. But this is when we get paid. This is when we get paid.

And that’s the way it’s a high confidence call for us. We have ten out of twelve. Your investing system screens are bullish. That’s back up the truck territory. That’s how we’re positioning this. And of course we have other events that are being front run. The Fed to start cutting rates this week. We get two important piece of economic data.

We get inflationary data. We get the August CPI on Wednesday, followed by the PPI on Thursday. CPI is far more important than the PPI. It’s like a natural thought really. But the CPI is important and this is the last big, I think the last big economic piece of inflationary data we’re going to get before the Fed meets on September 17 and 18th before they cut rates. And should they, should they cut without question, should they cut by 25 basis points or 50 basis points? They should absolutely cut by 50 basis points. And it’s not because the economy is in bad shape. They’re just offside.

[00:17:52]:
They’re way offside. Again, when you have the ten year falling below ten year yield below 3.7% today and the Fed funds rate is an effective 5.33%. Okay. The Fed needs to cut rates by 150 basis points just to get back to where the ten year is. So yeah, they’re way offsides here and they should absolutely cut by 50 basis. I think they will. I think they’re going to cut by 50 basis points. Although the market right now is only pricing that with a 29% chance of happening, a 71% chance the Fed will cut by 25 basis points.

So we’ll see. Before we get to the internals and other, other interesting things in the market, I’ll just point out how much we like a few things because why not, right? You know, again, buying the dip, there are some stocks here that look fantastic. In addition to the semis and tech love Tesla here. I don’t know if you caught this, but we learned today from Mobileye that they are halting all development of Lidar, which is their. Their version of autonomous vehicles. Is they primarily rely on, or at least in some part, large part, have been relying on the development of Lidar, which is a radar system. And Tesla’s always said, no, no, no, we’re doing the cameras. You know, we’re doing cameras and with the, you know, thousands of.

Of Nvidia servers that were all hooked in together, you know, at their giga, what do they call that? Not gigafactory, but Giga AI or something. And that. That. That was a big win today. It was a signal to Tesla investors that Elon Musk has said, said a couple years ago that everyone developing Lidar will be out of business. No one will be doing at all within a few years. Well, he got proven right today. With mobilized decision, they help send the stock up 3%.

[00:19:50]:
Look, we’re broken record on this. There is one stock that should be in every investor’s portfolio, and that’s Tesla. That is Tesla. Bitcoin should as well. Not really. I guess it is a stock now that they’re ETF’s, but pure equity play is Tesla. That’s the one stock that should be in every investor’s portfolio because they have four to five divisions that each will be worth more than a trillion dollars within five years. And right now, the entire market cap of Tesla is below a trillion.

Let me give you a quick read on that. Yeah. The entire market cap at Tesla right now is $693 billion. Considering the fact that we have many companies now trading with market cap over 1 trillion, 2 trillion, approaching 3 trillion. Yeah. That gives you an idea how cheap it is. And it is cheap. So that’s the pound the table call for us.

But again, we’re broken record on that. And the stock has been very volatile of late. It hit 270 not long ago and then had a big shake in after second quarter earnings. But every day that goes by, they get closer to winning on not just EV’s, but autonomous vehicles, full self driving, and then the robotaxi. Remember robotaxi event. The unveiling is one month from tomorrow, and I will. There is going to be a lot of front running going into that now. It could set up for a disappointment if Musk says, hey, it’s going to be five years before it’s out there.

[00:21:23]:
That’s not going to happen, by the way. But looking for, I think, a high probability trade to also go with a market that’s heavily oversold and ready to rally after we get out of this month of September. And maybe the lows are already behind us. I think Tyler just told me he thinks the lows are already in. I think he’s probably is right. August 5 lows are in. We won’t violate those lows. But I think that’s the.

That’s the one stock that I would buy, and I buy. I buy Tesla every chance I get. So that’s. That’s a pound of table claw if you’re looking for something. I also love precious metals. And miners here love GameStop, by the way. GME Gamestop, one of the original meme stocks. The original meme stock.

You know, look at a chart on it and you’ll see this is. What a great setup. They report earnings tomorrow. The stock has been on somewhat of a tear up. I don’t know. What is this, 2020, 5%, something like that? And in the last couple weeks, I don’t have the exact numbers, but I think that’s pretty close. And they have over $4 billion in cash. So they’ve really played this market, this meme market mania, really.

Ryan Cohen, the CEO, is a sharp guy, and he understands the markets and how to maximize corporate profitability from financial engineering. And this is one of our big, bright themes. Right. And Gamestop is. I don’t know. There’s a better example of companies using financial engineering. I think it’ll be more and more clear, like, where they play the meme stock. They know they’ve got.

[00:22:54]:
A lot of shareholders love this stock, kind of a cult, not kind of a cult following, and that they know that every time they’re going to get these big moves, higher and short squeezes. Of course, the company’s short position, at least officially, has fallen quite a bit. It’s down below 10%, like 9.7% now. Remember, at one point, it was over 40%. That’s just the official. A lot of heroes will tell you it’s because there’s so many naked shorts and illegal shorts that is much higher than, say, the 10% level now. But, yeah, I think GameStop’s a great. A great trade here.

And what Cohen’s been doing and what I think you’ll continue to do is every time they get these big run ups, short squeezes driven by news, say the next time GameStop’s 24 and a half right now, say the next time it pops over 50, $60 a share, do another equity offering, keep raising cash again. Right now, they have 4 billion in cash. That’s almost half of the market cap of the entire company. So, you know, keep doing these offerings, keep building your, your, your war chest, and then maybe execute a announce. You’re going to do a strategy like, like a micro sailor, right, with micro strategy and do a bitcoin strategy. It’s worked pretty well for him, is it not? So there’s a lot of speculation about what they can do with their cash. Maybe we’ll talk about something tomorrow. I think.

I do think it’s a really good play here. And again, precious metals and miners. Look at the charts. We showed this chart this morning of the minor ETF, GDX bullish channels formed. Of course, people don’t. We’ve had a massive stealth bowl market in GDX, okay? And most people are not even aware of this. The GDX is up 60% from the bear market lows. It’s outperformed the SP 100.

[00:24:49]:
And I think most people aren’t aware of this. And of course, gold’s hitting regular all time highs. But the miners have done this in a very stealthy way where trading volumes are still pathetic. Like today, for example, GDX. I mean, this is really remarkable. GDX today volume was 15 million shares for the gold miner ETF. And that’s the average has not been much more than that. It’s been up.

This is probably the, this is right at the average. But see, that’s how we know. That’s how we know with a high degree of certainty that we are early in this bull market further for the miners and for purchase metals. Because when this group gets hot, go back and look at a longer term chart of GDX. You’ll see when this group gets hot, you’re looking at daily volumes of 70, 80, 9100 million plus years a day. Again, we’re averaging 15 and 17 million shares a day now. So that tells us. That is absolute confirmation in my mind that this bull market is yet to even begin.

So I think the charts look great. Certainly do. Of gold and the gold miners. Sochi, I just saw this weekend, based on cash flow models, there is no group cheaper than gold miners. It’s the cheapest group in the market today. And so that’s why we’re highly confident adding positions there, getting ready for a, I think a multi year parabolic move higher like we’ve had in the past. You know, go back and look at the chart from 2003 to 2011. It was, of course, interrupted by the financial crisis.

But if that hadn’t happened, you’d be looking at an eight year bull market, massive bull market in GDX. I think that’s what’s coming up. Matter of highly confident call the money printing is not going to stop again. Now we’re getting ready to have a rate cutting cycle which we think is going to last a long time. And again, gold at all time highs and the miners are still 45% below all time highs. So this is the dollar again. The bear market continues. Now it’s resumed.

[00:27:01]:
And so it’s a great setup for this group. So there’s some pound the table ideas for you in case you’re looking for them. All right, take a look under the hood today. The internals today were good. Matter of fact, they were quite solid. We had two to one against decline for NYSE, 1.5 to one on Nasdaq. Volume today was 70% up volume for NYC, 67% up volume for Nasdaq. Newfound highest lows were flat.

But again, this was a good day today for the internals. Sector watch was even better in our sectors. We had all eleven s and p 500 sectors finished higher on the day. Led the upside by consumer discretionary, which Tyler just reminded me, just hit another all time high today, up 1.6%. Industrials up 1.5%. Technology of 1.4. And again, all eleven sectors higher on the day. In our commodity watch today.

Gold today up $11. Now is at 25.35. Silver does not look right. Yeah, silver up even more. One and a half percent. And then we have crude oil. It’s one right now trading at 68.80, $1.13 a barrel. And finally, on the day, bitcoin, really good.

Move higher off of just again with the markets on Friday. Sometimes it’s hard to make the argument that bitcoin is a great store of value, but then you look at the longer term charts, you go, oh, yeah, it absolutely is. In the short term, though, it gets. We have these liquidity events where the market, people panic, right. Sentiment gets offside, very bearish, and people just start selling and vomiting stuff up. Right. And that that’s still happening. It also tells us, by the way, we’re early in this bull market, that as this bull market expands, that won’t.

[00:28:57]:
That will. And it’s happening now. We won’t have these kind of abominable sessions when it comes to not just bitcoin, but gold, et cetera. There’ll be more of a flight to safety instead of what we see now, where everything must go right. And so that’s what happened on Friday. But again, big reversal today. Love the chart. We’re not an extreme oversold, but we’re very close to it.

This is, I think, a great looking setup for bitcoin here. Let me just do a quick refresh. The only negative, it is below the 200 day moving average, and the 200 day moving average is still rising, but it’s plateauing. So it is important that bitcoin gets going here on the chart basis. Everything else about this chart says buy to me, especially. Here’s the trade. If nothing else, bitcoin had a solid bounce back today of 5.5%. Last 57,463 all right, that’s all for the day, folks.

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