In today's episode, Tyler breaks down a dynamic day of stock market action that ended with an all-time high for the S&P 500. He highlights the market's resilience as investors have capitalized on strategic opportunities amid recent fears, particularly surrounding the recent Deep Seek AI news. The rally we have seen in semiconductors since then may impress you. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Tuesday afternoon everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a great day out there today, a great start to the trading week this week if you were able to enjoy the long weekend. Hope you had a great long weekend as well as the market was closed yesterday for President’s Day. And to kick off the week in this, you know, Monday of a Tuesday, we got a strong day of stock market action here today. We saw all time highs today, the S&P 500 finishing at an all time high today as well. And a strong, very strong, I would say, smart money hour, which is exactly what you want to see from our markets.

We’ll go ahead and kick it off here with The S&P 500 up, you know, a quarter of 1%. So not huge gains on the day, but managing to close just above its January 24th all time highs at 6129 here on the day. Again, maybe not a huge day of gains, but we finish at the highs of the day here. So very good to see exactly what we want to see from our markets is closing at the highs of the day today. Now I will say here we are hitting short term overbought levels. I’ll point that out as, as we do here often in the V Investing podcast. But we do still have some room to run before hitting extreme overbought on steroids, which is our highest distinction of overbought level. So we’ll continue to alert you here.

[00:01:45]:
But our view remains unchanged. Any dips that we get from our our mag, our favorite positions I should say will continue to buy the dips here. So I do want to get to the rest of our market action. But I have to point something else out here today as we’re now three weeks since the deep seek AI news that, you know, came out January 27th and sold, we saw a massive sell off to kick off of that week. Obviously here we’re back at all time highs. So we’ve gotten that back and then some since that news here. But because of the kind of move and fear that we’ve seen from that time, which really turned out to be a fantastic buying opportunity, you know, I figured it was worth going back through this here. So given that it was a big sell off day, as you might expect, I had the podcast that day, of course.

[00:02:42]:
Right. Although today all time highs, you know, you take the good with the bad obviously. But we now know that those fears were overblown and we have proof of that that just came out today. I’ll get to that here, more in a second. But again, looking back over my notes, it’s exactly what we talked about here on the podcast and exactly the feedback that we got from you, our audience as well. We know we’ve got such a smart money crowd here, so we always appreciate that feedback, you know, sending us articles or things that we might have missed throughout the day. We know a lot of you saw this as well, that I’ll kind of go back through the first few points I made on that podcast. First and foremost, the main point was that we said it wasn’t a time to panic, right? This had changed nothing in our outlook for the market.

If you did panic sell on that Monday, January 27, you would have missed out on a 10% plus move higher in the semis since that time. And that was the biggest hit group on the Deep Seek news, remember, because it was going to disrupt Nvidia chips. They did it on old modeled platform old, old versions of Nvidia’s chips so that we’re not going to need as more going forward. We can do this with less processing power. And the semis just tanked. Now we know so many pieces of that story were bogus. I won’t get into them all here today. But on the chip side of things, it has been speculated very heavily that they did use the latest version of Nvidia chips and way more of them and they spent way more than they than the articles covering this claimed at the time.

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And the market has reflected that as we have gotten back to all time highs in the S and P. Now the semis do have some work to do, but I’ll go ahead and pause there and point out that the semis led the way today up nearly one and a half percent, making another big, you know, since the January 27 lows. This is another higher low that we’ve seen from the semis as well. You know, we’ve been looking for a rotation into this group for some time. I’ll get back to the rotation theme here in a minute as well. My second point on that Monday podcast on the Deep Seat news was this is part of the innovation revolution, right? And disruption is a feature of innovation, not a bug, right? This is what we can expect to see more of in the future with disruptive tech, whether it comes out of China or it comes out of the US this is some very disruptive technology that we’re talking about here that the use cases that we’re hearing from clients and their companies. It are astounding and we’re just scratching the surface of these. Right? So again, we see this as incredibly bullish.

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These are, these disruptions are not to be feared, right? These are strategic opportunities to add to your investments when there is disruption like this. That’s how we’ll continue to play it here. We think that the innovation revolution and combine that with the Trump Economic Miracle 2.0 will lead to a golden age here for America. So don’t let these short term moves scare you. Then the proof that I mentioned earlier, lastly in specific to AI here, I said on that podcast as well that these tests that come out, there’s a new winner every month. You know, one month before Deep Seek it was chat GPT at the top. But then maybe Google’s Gemini would pass them for a few weeks or Claude would pass for a few weeks. Then Grok came on the scene and Grok started to disrupt some of these and, and win some of these tests as well.

Right now there’s five other models out there in addition to these. But we just found out today Gro3 is now out and that’s Elon Musk’s XAI platform. So for Twitter just outperformed Deep Seek in the latest math, science and coding test as well. We also saw Gemini beat in a few of those areas as well over Deep Seek. I mean, Grok came away at the top. So again, just three weeks ago we were freaking out. Deep Seeks got the lead on us, China’s gonna take over AI and now we’re back to being on top here. So that’s how quickly these things are going to change.

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Don’t react to the headlines. The Perma Bears will continue to use every headline they can against the bulls. But what we saw today, again in today’s market action can be described in no other way as resilience from the bulls. At just an hour and a half before the close, the Dow Jones was down over 200 points. We had hit the lows of the day just about across the board for our major indexes. And buyers stepped up and continued to buy into a strong money smart money hour, taking our major indexes positive. Right? That’s the kind of resilience that you see in a bull market. Again, we think we’re still in the early innings of this bull market.

So I’ll go ahead and get to the rest of our market action here on the, on the day. We were actually led by the small caps today. Another good one to see here, up just under half of 1%.2290 for the Russell 2000. After that the NASDAQ up just slightly 0.07% to2024. Again those may not sound like big gains, but considering where we were at the lows of the day just two hours before the close to rally back and to finish positive on the day again, resilience very good to see. After that the Dow Jones managed just to eek out a gain at the finish line today, finishing at its highs of the day again earlier in the session down over 200 points. Finished up 10 points on the day at 44,556 going into the session today. I’ll go ahead and say this as well.

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The Fear and greed index was in fear mode. We’re at 44 on the fear and Greed index going into the session today. We got an all time high from the S and P. The Dow remains about 1% or so away from its all time high as well. And again we did see some other all time highs out there today. So that level of fear, fear in sentiment continues to keep us bullish here. You know, we’ve talked a lot about what we saw in the AAII survey last week where we see nearly 50% of investors are bearish right now. Wow.

Also point out for the Dow here, the Transports led the way in a big way today, up nearly 1.2% on the day. You know exactly what we want to see is the transports participating and leading. The Dow is good to see as well. So again the gains on today may not seem that impressive on the surface, but again the resilience here is very impressive in a strong smart money hour is crucial. You know, also interesting here, this is the day that the bears would say that seasonally speaking should have been a rough day at the second half of February. You know, we wouldn’t mind seeing that play out in a different way. You know we like to follow seasonality here as well, but this is a good time to kind of buck the trend for our markets. That’s what we’d like to see.

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Another factor here that has us bullish. One other factor for our markets, we got a rally today without any help from the Magnificent Seven. Only two out of the Magnificent Seven finished positive on the day. Now we do remain bullish some of these stocks but Nvidia, Microsoft were the only ones to finish higher on the day meta breaking that 20 day winning streak. But I gotta say that doesn’t worry us a whole lot here. The mega caps have been doing their job lately and in some cases we’re reaching, you know, in Meta’s case, certainly extreme overbought on steroids kinds of levels here. So this is a good time to bring back the rotational theme to our market. We’ve talked about this a lot that when one area gets to extreme overbought on steroids, the UN we see a rotation of money into the unloved areas which at the very least keeps our markets near all time highs.

Right. That’s what we’ve seen time and time again from the bear market lows of October 2022. One sector leads, we get a rotation into another that helps take our markets again to all time highs. It’s exactly why we’ve continued to get all time highs despite the semis not hitting a fresh all time high since July of last year. Right. So now we think we’re due for another rotation here. We do think that the semis will play a major role in, you know, of course there’s plenty of fear out there on the Mega Cap names. The story everyone’s talking about multiples too high, multiples too high in keeping up with earnings, you know, in some cases certainly wouldn’t be wrong.

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Right. But we don’t think it signals the gloom and doom that the perma bears are talking about. This isn’t, you know, bubble bursting type action that we’re seeing here. We think these pullbacks in the Mega Cap names just set up for further moves higher in the long run. We don’t think that we’re at the end of this by any means yet. So back to the rotation theme. We saw it, we’ll see it here again in a second in the internals, which I’ll get to. But if the Mega Cap names need to take a break, maybe it’s the small to mid cap names that start to play catch up.

Maybe it’s the semiconductors. Right. Maybe it’s value names again. We’ve seen that rotation many times in the last year and a half to two years as well. And what we saw from the market today, Again S&P 500 all time high, up about a quarter of 1%. But the mid caps outperformed the S&P 500 by nearly three times. This is the mid cap S P 500 up 9/10 of 1% on the day. So again, and that is also nowhere near overbought levels.

[00:12:49]:
So I think that’s a very healthy looking rotational chart. That chart looks very bullish as well. So again to the rotational theme. We think that’s what we’ll get more of and it’ll give the Bears more ammo. Hey, that’s all right. Sentiment can stay at these levels. It’s just another sign to us here that we aren’t anywhere near a top, especially not a blowoff top. That’s going to be years in the making.

All right, so taking a look at our internals next up here on the day, again, good numbers here across finishing, positive across the board and got some improvements here after the close as well on this latest refresh. Even earlier in the day though, when our major indexes were red, you know, getting close to their lows of the day, the internals were just about positive across the board, especially though on volume. Volume was strong. That’s a little bit of a tell from the market that we could have some strength into the close and that is what we got today. But good to see this kind of action from the internals on a day like today as well. Advancing stocks, beating out declining stocks on both the NYSE and the NASDAQ. 52 week highs and lows coming in just about 2 to 1 positive across the board here. NYSE and NASDAQ.

[00:14:07]:
And then lastly volume. You know, not quite the bullish breath thrust kind of day that Walter Deamer likes to talk about, but still a strong day. Over 2 to 1 positive volume for the NYSE and well over 2 to 1 positive on the NASDAQ as well. So again, healthy internal action. This is broadening from this market. Again, that’s another reason why the mega caps could take a break if they needed it, right? Not saying that they have to take a break either by the way, just if they needed it. We have these unloved sectors and great potential outside of the magnificent seven in this market that investors will start to pile into as this bull market continues to expand. Next up, looking at our sectors on the day, we this is a bit of that rotational theme too.

Tyler Herriage [00:14:55]:
Some value sectors leading today. Energy up big on the day followed by materials utilities which were higher with the tenure up 1.6% on the day at a a 4.54. So still below those recent highs. But good to see utilities moving higher on a day with yields up as well. After that, industrials and financials. So those top five really all value sectors, you know, no complaints here. Of course we want to see tech in the semis leading. We got the semis leading today again, the semis up 1/ nearly 1 1/2% on the day.

So leading all of these sectors. So we did get some of the areas we want to lead today. Absolutely. A lot of bright spots out there today. Too much to cover in one podcast really. As you might expect, meta breaking his 20 day streak higher. Massive move for Meta as the largest holding in communication services. As you might expect, communication services led the way lower today.

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Google was lower as well. Those two make up 40% of that portfolio. After that, consumer discretionary and healthcare. Finally here for today, our V commodity watch which wow, I just got the refresh of the screen here. Gold, I mean right just below all time highs. The all time high 2,968 right now. Also at its highs of the day 2009, $954 an ounce. This is a group we do remain extremely bullish on.

Working on a few pieces here now about it as well that we may not be bullish enough on this group and exactly what we want to see. Gold miners continuing their move higher today as well. Not quite outperforming gold, but still a strong day. Silver up 1.2. Excuse me, 1.72% to $33 4042 cents an ounce. Copper now down on the day. 1.75% to $4 and 58 cents a pound. It’s been on, you know, even with this little bit of a pullback here, it’s seen a pretty good move lately.

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Oil up one and a half percent. Still hanging out on the low end of its recent range at 71.78 a barrel. And finally here for today, bitcoin got as low as 93,000 early 93, 400 earlier in the session. Still down 1.2% on the day now, but has recovered some at least at $95,244 a bitcoin. Again, another group we do remain bullish long term on as well folks. Gosh, I could. There’s so much to talk about here today, but that’s about all we have time for here, you know. Please sign up to receive our V podcast every day at the market close.

You can sign up at vraletter.com close, click the podcast link at the top and we’d love to have you with us. Thanks again for tuning in. Until next time. We’ll see you back here tomorrow for the close.