In today's episode, Tyler discusses a strong close to another rough week for our markets. The S&P 500 has now declined for four consecutive weeks since its all-time high in February. We’ll explore the factors contributing to this dip and the potential scenarios we see playing out from here. Tune into today's podcast to learn more.

Foreign don’t look back because the market is closed. Good Friday afternoon, everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a great week out there this week. Hope you had a great end to your week this week, a great Friday out there. And for the market, it was a strong, much needed, strong end to the week this week because I can’t sugarcoat it, it was another rough week for our markets here this week. Now making four weeks in a row of declines for the S & P 500. So, you know, not what you want to see obviously from the markets.

That means that the S & P has now been down the four weeks following its all time highs from Fed February 19th. And as Kip discussed in great detail yesterday on fantastic podcast yesterday, that the ones who have been hurt the most here has been the MAGA crowd. While at the same time, you know, we’re not getting a whole lot of sympathy from the administration, we’re not getting a whole lot of certainty and clear messaging from the administration. And that has not helped the market at all.

[00:01:25]:
When you have, you know, our leaders, Treasury Secretary Bessent and Trump saying, you know, hey, we’re not too worried about the stock market right here, that didn’t exactly send an inspiring message.

Where, oh, because you’re also saying at the same time, things might be tough in the short term, but on the, on the back end of this, they’re going to be good. You know, it just, it doesn’t, it’s not very reassuring at a time like this, especially not for the base. And when you have the dims and really the left finally finding a narrative that they can take hold of because really since the election and the inauguration, it’s been a constant stream of wins for Trump since that time they kind of found some ways to hold him up a little bit. You know, it wasn’t that long ago, just a month ago we were talking about here on the podcast just what a difference we’ve seen from the media. You know, they couldn’t keep up with how fast, the fast pace of everything. Now they’re starting to catch up a little, a little bit here. And again, it’s not just the dims, the Democrat Party, right. It’s also a large portion of the biggest financial institutions in America.

Private institutions are also heavily left leaning. So they’re out of this market, they’re shorting this market, they’re celebrating this correction that we’ve seen so far in this market. So again, Kip kind of went into A deep dive into of this yesterday. If you haven’t had a chance to tune into that, that podcast yet, you know, I highly encourage you hit pause here, come back to this one because Kip broke it down really well there. I’ll cover a few more high points of it here on the podcast today. And you know the reaction that we’ve seen from it here in the market today because again, it was a good day today. So, yes, this was the first technical correction, what since October of 2023 for the S&P 500. Never feels good, always painful.We’ve talked about that here at length.

On the podcast. So a correction, technically they would say a 10% pullback, whether that’s a major index, a stock, an ETF, you know, that’s gen, a generally accepted term, but it’s really not much more than that. There isn’t more meaning behind the term other than it means a 10% pullback in a stock. You know, people like to talk about a bear market. Again, that’s another just technical level. 20%, really it’s a round number, so that’s nice. But other than that, it’s kind of an arbitrary number.

[00:04:00]:
The stock market acts, acts a little bit more like the laws of nature because we’re dealing with human emotion on a day to day basis. Right. This isn’t just some mathematical approach. There are patterns, of course, and pattern recognition is important in the stock market, but you can’t really give it defined patterns like 10% and 20%. And that’s, you know, where it goes. Because we’ve seen too many times that oh, now we’re in a correction for this market and really the, the bottom ends up being 10 and a half percent and then we rally from there. So what’s the difference between that and 9.9% other than 6, 10 of 1%.

That’s the only difference. The. But the term freaks people out there is, is kind of my point on that. So now from an analytics point of view, you can find relevant data sources, but you could as easily pick when the market falls 11% or nine and a half percent or six and a half percent or 20%. 21.

But point being for the analytics of this one, when the market has a 10% correction, they, they feel terrible at the time, but they’re really not far out of the norm. They take place almost every year.

[00:05:12]:
It’s roughly 18 months or so, but we’ve had a few more of them recently than we have in previous years. Sometimes you go long stretches without a 10 correction. Sometimes like we’ve had in the last, you know, four or five years, you have multiple of them in a shorter than 18 month time frame. But if the last one was in October of 2023, we’re kind of in an appropriate time range for something like this to happen. And our view remains unchanged. You know, we’re gonna stay very closely. We’re watching this market very closely here and the administration as well to see as this messaging changes. But our message does remain unchanged, which is that this is a pullback in an otherwise bull market.

A counter trend move in within a bull market. And we compare this period just a quick one today. I won’t go full into it as I’ve done often in sharing the chart of on this podcast, but we’ve compared this period from the 1995 to 2000.com melt up and we still think we’re in the early innings of that melt up. But during that time frame, The Nasdaq had five corrections of 10% or more, including a bear market down 33%. They were all fantastic buying opportunities.

They don’t and they never are fun to go through and bottoms along the way are messy. So we’re not saying exactly that the lows are in yet, especially after just one day’s action by the dip, though, remains the smart money move until something fundamentally changes. And as Kip discussed yesterday as well, next week is an important week with the Federal Reserve meeting here again, he did a great job recapping all of these topics yesterday, but I will go ahead and cover this one here. I was thinking if I’m gonna have the FOMC podcast next week, we’ll see, we’ll see. I might have to swap days with Kip to get in there because it’s actually, it’ll be nice. We won’t have another Fed meeting after next week’s for a month and a half. So that’s always nice. You know, basically we’ll take the month of April off and the next meeting is early May.

[00:07:18]:
But what’s different about Trump’s first term and now, and maybe this is by design, we haven’t heard a lot of back and forth between Jay Powell and Trump. They tried to push it a little bit in the beginning and it just didn’t take any traction. And then there were enough headlines to cover.

Whether it’s tariffs, people talking about inflation just two months ago again, and the potential for rate hikes in 2025.

That was just two months ago that, you know, really the perma bears were floating ideas like that right after one. Not even hot per se, semi hot inflation data again which is completely reserve reversed now as we saw in this week’s CPI and PPI data. So maybe that’s good news that we haven’t heard much back and forth between Trump and Jay Powell. And Best is behind the scenes talking to Jay Powell probably like this one should be happening. Jay Powell doesn’t like being thrown under the bus. Right. You know the guy’s got a little bit of an ego problem.

[00:08:19]:
But you know, I’m not saying that that’s necessarily a bad thing. I think a lot of people at that level have ego problems.

It’s really hard to get to that level if you don’t have a little bit of one. But if Jay Powell can come out next week with a little bit of a more dovish tone than what he’s had, right. He doesn’t have to say we’re cutting rates in our next meeting in May or we’re going to cut rates in June as the CME Fed Watch tool is currently predicting. He didn’t have to say that, but he does have or need to acknowledge the data that we’ve seen so far. Acknowledge that yes, the economy is slowing compared to where we were.

And I have some points on that here in a minute as well. The obvious one being that when you have government expenditures like we saw in 2024 and the handoff to the lack and cuts in the government expenditures in 2025, it’s going to hit the market.

[00:09:17]:
That’s. But again we’ve seen that as a one time hit and I’ve got some more on that here in a minute. But Jay Powell tomorrow should essentially confirm that that kind of hawkish tone of a potential of a rate hike in 2025 is essentially off the table now.

And starts signaling towards yeah, we’re thinking about rate cuts here. Again we’re going to follow the data. That’s fine. If he says something like that. Like I said, I don’t think he has to confirm it here, but he needs to acknowledge it. I think a dovish J. Powell would really help the markets next week. And again it could be a little bit as Kip discussed yesterday, if we’re looking at 40 chess playing out here, if we are, this is what we would see then next week.

And the timing couldn’t be better here. You know, we haven’t had back to back days of positive market action in the four weeks since this decline.

[00:10:07]:
So we need to start stringing some wins together here. That would certainly help next week. But it’s also lining up well with our rotation theme. This is one we haven’t really had the need to come back to because everything in the US has been hit so hard.

But this is the rotation theme we’ve talked about really since the bear market lows of 2022 where you know, we’ll see this rolling bull market throughout the economy, right? You know, one month or a couple of months, it might be the semiconductors leading the way. They get overbought and then we see a rotation into the value stocks and they start, you know, playing a little, start showing little life while tech stocks work off those overbought conditions. Fast forward to there. You know, maybe the Magnificent seven have seen some incredible months of gains, right? Then you’ll see a rotation into maybe not value names, maybe the commodity sector, right? Energy names, doing really well. Gold miners. I’ll get to that here more in a second. They’ve been on an incredible run here. So that is part of the rotation.

What we’re seeing this time has been a bit more of a global rotation though, right? And Kip has talked about this a lot, we’ve talked about this here a lot, that this has been a US centric event. So it’s been an incredible run from Trump’s election in November to the inauguration and the all time highs in mid February. But we had hit extreme overbought levels, right? That’s when bad things tend to happen. And the rest of the world had participated for the most part. But they weren’t at quite the overbought levels that we were at. Again, an incredible run like we saw U. S stocks and major indexes. So we’ve seen a little bit of a rotation globally now and we think that’s a big theme of what we’re seeing right now as well.

[00:11:52]:
Again, the continued theme of a rolling bull market. Now the pain of a sell off once again never, never feels good, right? But we’re not seeing a throw the baby out of the bath water global recession type of of talk here, right? As we see it, we’re, we are still in a global bull market, right? As you’ll see from major indexes globally hitting 52e highs or all time highs. But that will be an economic bull market as well that we see coming as part of the innovation revolution. So point being here, don’t confuse rotations with a bare market. We’re not there yet. Now again, if, if really if we change from Here we get a really hawkish J. Powell and the other points that Kip talked about yesterday. You know, we’ll start to revise our thesis a little bit and something we don’t obviously don’t want to do here.

But we keep coming back to the same point again of not confusing rotations with the bare market and that short term counter trend moves, this has been a very short term move, right. It’s only been four weeks since we’re at all time highs. These short term counter trend moves have not negated our fundamental reasons for being long this market. These short term trends have not invalidated our five megatrends that we laid out in the big bribe.

None of that has changed. We continue to look for an earnings expansion, a GDP expansion. Will there be hits along the way? Yes, especially with the Doge cuts, right. It doesn’t help. And so let’s go ahead and jump into a little bit of that now because the Doge cuts, the tariffs, all of that has really sucked in so much fear into this market. It sucked in a lot of short selling into this market as well. Whether it’s, you know, the airline data that’s been coming out, they want to say traveling is slowing, right. Despite more passengers moving through the US in recent history than, you know, jet fuel demand, highest level since 2019.

So the facts aren’t necessarily backing that one up. But I get the Doge cuts, right? A when we go from, you know, the kind of spending that we saw under the Biden administration to a private enterprise administration that’s promoting private enterprise, it’s going to be there’s going to be bumps along the way. So here’s my first screen share of the Day to Day is actually a tweet. I haven’t done this one a whole lot, so let me know you think about this style, but instead of just reading it to you thought you could read along with me. So bank of America coming out with this here just in the last 24 hours that so DOGE is desperately needed as the alternative to catastrophe. The catastrophe we’ve talked about here and many have talked about here are government debt, you know, the interest payments on this debt, growing deficits.

All of these things. So the global handoff from big government to the free market may prove slippery. We’ve seen some of that so far, but it seems necessary given the large deficits, bloated debt burdens, economic growth has been enabled by unsustainable government support and protectionist policies. So you know, Jared Woodward of B of A acknowledging Here is going to take a little time for private growth to accelerate.

And it will. It’s a transition period. We don’t think it’s going to take too long really at all. But again, going back to some of these stats Here, you know, one year ago, 85% of U S job growth was from the government.

[00:15:23]:
It was what, 33 of our increase in spending as an economy in 2024 was government increased spending.

We don’t want that. We can’t, it’s not sustainable. And that’s why the Trump team is so crucial right now. They get the messaging.

Because let’s keep discussed yesterday, animal spirits can snowball in the other direction so quickly. They’ve got to get a handle on that message because I agree with the Trump administration and many of you here, I know as well, these are all things that we do need to cut. We need to get control of our government here. So we have to do this right. But it doesn’t mean that we have to see the stock market tank along the way.

[00:16:06]:
Because the stock market’s a forward looking mechanism. If you start seeing the stock market tanking, you know, then you start to see the more recession fears and these things build. They’re like Kip talked about yesterday as well. It’s a bit of a self fulfilling prophecy. So it’s an important time right now as we see it. But we think it’s health like again healthy. It’s going to be slippery along the way, but it must be done here. So we’re full support of it here.

We want to see it keep going. And we talked about this one a lot here. When Javier Mal mal took over Argentina, it was a rocky beginning there and then they had a government surplus. Their stock market’s up in a big way. They’re no longer experiencing the inflation crisis that they had there.

And it’s still the early innings for him. He’s only a couple years into office there as well or what a year and a half. So again, we’re okay with a little bit of rockiness there, but we’ve got to control the messaging. It’s got to be a little bit more positive, I think. But you can see the fear showing up everywhere. We’ve got a I, I still in extreme fear mode at 21 again after four weeks of declines. What do you expect AAI again this week, massive spread, 40% spread between bears and bulls. We talk about this a lot, 3, 6, 9, 12 months later, every time this happened turns out to be very bullish.

[00:17:26]:
For the markets. So let’s take a look at our market action on the day. Quickly here we had we’re led by the Nasdaq, exactly what you want to see. And even better semis led tech today up 3.27% for SMH. Nasdaq up 2.6% at 17,754 we had on one second here. One more thing I will point out here for our major indexes on the fear level put call ratio also today, you know again we’re seeing elevated put buying again now setting up for the potential for a short squeeze. You know let’s see what we get next up. S and P or sorry small caps up 2 1/2% to 2044s and P500 up 2.1% to 5638.

And lastly here the Dow Jones up 1.6% to 41488. Final points here for the major indexes. We remain just barely bouncing off and in some cases still at extreme oversold levels. So we need a good week next week. It wouldn’t surprise us either here at these extreme oversold levels. Now the internals on the day. These are the most impressive turnals internals we have seen in some time. Wow.

Five to one positive nyse. I’m going to go ahead and share this one here because it is I wasn’t planning on it. Let me pull it up because it’s too good not to show it’s too good of a day. Now we use a few different sites and metrics charts to view the internals. Everyone’s a little bit different, has its own strengths and weaknesses. This is just the best to show a one day result just today. You know there’s other ones out there to compare previous days or like a chart you’ll see. So here we go from Market watch again over 5 to 1 positive NYSE just shy of 3 to 1 positive NASDAQ 52E highs and lows, no problem.

[00:19:26]:
We talk about this year a lot a lagging indicator.

But that is a better number than what we have seen recently as well. But it’s also cumulative. So if anything rallied off its lows of the day. Like our major indexes finished at their highs of the day. So we might have seen that from some of the stocks that hit lows earlier in the session. Then finally the most important one here and I’ve got to run a few little calculations on this one because I you get a refresh after the close here. So 4.43 this is massive upside volume on the NYSE. 4.43 billion out of 4.91.

That is 90% upside volume. You might need to see a follow through on that one. But that’s getting close to a technical bullish thrust there from the NYC. Exactly what you want to see. And over 80% upside volume from the NASDAQ as well. So had to share those internals again. Best internals we’ve seen. You know, even better than some of the days where many of the days where the market was heading higher leading up to this decline.

[00:20:27]:
So if you’re looking for a reversal kind of indicator, we need some follow through, but that’s good to see. So again, not saying the lows are in, especially not based off of one indicator, but that is a very good one to see there. Looking at our sectors on the day today, all 11 sectors finished positive on the day as you might expect with NASDAQ leading and the semis leading. Tech, tech led for our sectors today, followed by energy and financials. But again all 11 sectors positive on the day today. Finally here for today, one last vinyl all time art. Sorry, excuse me. Well, the gold close at an all time high today.

So now we’re just off of it. Still higher on the day at 2993 after breaking above 3000 yesterday. What did it close yesterday? Close it 29.91. So yes, this would be a new all time closing high for gold today. And my final chart to share here for the day. Let me get a refresh of this screen real quick. One group we’ve talked about here at length, gdx, the gold mining etf. I got to point out, yeah, we’re hitting short term overbought levels but not at extreme overbought on steroids.

And that is a new 52 week high from GDX. Very good to see it breaking out from this level here after its 52 week high there. But here’s what I really want to point out. You know, while GDX leading the way today up 1%, exactly what you want to see from the group. Junior miners have actually been outperforming the majors here as well, which is another bullish sign for the group as well. So in case though, if you feel like you’re getting, you’re late to the move in gold here now that it’s at $3,000 an ounce. You know all time highs for gold. If you feel like you’re late, the gold miners might be hitting a 52 week high.

[00:22:26]:
But look at this here. Do it from up here, zoom out to just the the origination of this ETF right in 2006. Look at that. We haven’t even hit an all time high. We haven’t hit an all time high in GDX since 2011, but this is at 40, 387, the highest level since the 2012 time frame for this group. Now look at this 34% move still to get to an all time high. Here’s why that’s important. The party doesn’t even start until you get to all time highs.

Once you get into blue sky territory, that means no one has loss at that point, right? And people are still wanting the momentum and upside potential for groups like this. So this is a, a group we still, even at 52 week highs, remain very bullish on. You know, it’s never a straight line to all time highs. There will be more great buying opportunities along the way. But as I pointed out, you know, we’re not hitting extreme overbought levels there quite yet. Not saying that now’s the time, you know, to be diving in with both feet, but that we might have more room to run. We’d like to see the gold miners continue to run here. Next up, silver also higher on the day at 34.36 an ounce.

Let me just want to run that chart as well because we’ve got to be getting close there. 35 is the 52 week high for silver copper at 4.88 cents a pound down, down just over 8/10 of 1% on the day today. Oil still below $70 a barrel. We’ll see if that trend can continue. It was higher today though, up 1%. It’s $67.19 a barrel. Finally here for today, bitcoin getting a little bit of love. Still below 90,000.

[00:24:14]:
Still below 85,000 for that for that matter, but up 4.2%. $84,223 of Bitcoin. Again, another group. We do remain very bullish on here folks. That is all that we have time for here today. Thanks for tuning in to our podcast here as always and thank you for your feedback as always. You know we’ve got a great group here and we’re extremely grateful for you joining us here every day at the market close. We love what we do.

We wouldn’t be anywhere else. So thanks again for tuning in to sign up to receive our podcast. You can sign up@vraletter.com you can find us on all your favorite podcast platforms as the Vertical Research Advisory VRA Investing Podcast usually also works as well. All right, folks, have a great weekend out there. We’ll see you back here on Monday for the close.