In today's episode, Tyler breaks down today's stellar stock market action, taking a deep dive into today's jobless claims and global economic events of the week. He covers this textbook market pullback and why it should turn out to be a great buying opportunity. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Thursday afternoon, everyone. Tyler Herriage here with you for today’s VRA investing podcast. Hope you all had a great day out there today. If you’re watching the markets today, you had a very good day today. And I’ll go ahead and lead off with this because something must have changed, this marking mark in this market right now, really in the world of investing that I’m apparently unaware of, because what we’re seeing this week usually doesn’t happen. And that is the fact that I almost exclusively get the big down days for the market and Kip gets the follow through days after the big updates that follow the market lows. Well, this week, Kip got the lows of this pullback on Monday, the big sell off, and I got a bounce back on Tuesday.

Kip again got a down day yesterday. So I am very glad to be here with you today getting the two updates so far this week. Now, hopefully that pattern changes a little bit again and we get a strong close to the week tomorrow. And there are some reasons why here that I’ll cover in this podcast, why we think that is the case and why the largest part of this move, lower, is likely behind us now, and the bottom is likely in as well. Now, it’s tough to say that bottoms are always messy, but I’ll continue to explain throughout this podcast as well, that in the off chance we see, it is very unlikely that we break through Monday’s lows. But we would continue to look at this as a buying opportunity if we did so. But again, I don’t think that’s going to be the case. And we’re seeing some very bullish action in our major indexes, in our favorite sectors as well, and individual names.

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So we’ll cover all of that here today. But really kicked off this morning, futures were slightly higher. And then we got jobless claims coming out. And, you know, last week the jobs report is what everybody says really freaked this market out. So today we got lower than expected jobless claims, which is better, obviously, than what we saw last week with jobs missing from expectations. But again, as Kib and I both talked about a lot this week, we’ve got to remember, yeah, they were weaker than expectations, but it’s still growth. These aren’t, we’re not losing jobs month over month. We don’t have negative GDP numbers coming in.

And as we’ve referenced a few times this week as well, the Atlanta fed just upped their q three GDP target as well. So again this morning, jobless claims coming in lower than expected at 233,000 jobs, down 17,000 from the previous week and 7000 lower than the forecast of 240,000. And again, last week’s jobs number coming in weaker than expected. Really kind of marked a turning point for this move lower. And one that we saw here that could have been the lows. Kip and I have been talking about this a lot this week as well, that we think a bigger part of the recent volatility that we’ve seen doesn’t have to do as much with these jobs numbers like we saw on Friday or the jobs number today. It has to do with Japan. If it weren’t for the recent panic fueled sell off this week on Japan’s decision to raise interest rates, we could have been off back to the races by Monday.

You know, this is a macroeconomic event out existing beyond our borders here, so out of our control. But we don’t think that it has future ramifications coming from here because the fear and the reaction to this news already appears to be overdone. And already Japan has come out to say that they will not continue to raise rates. So starting to look like the carry trade might already be back on and that the worst of this pullback may now be behind us. And this bears repeating one more time. Something we’ve talked about a lot this week as well, is that, yes, pullbacks never feel good and it always feels like they’re going to go lower than one might think. And the moment that you’re really most fearful about buying stocks is likely the moment that you should be buying stocks. Right.

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You want to buy when everyone else is fearful and you want to sell when everyone else is greedy. Well, the fear out there was serious, and I’ll get to that here in a second as well. But for our major indexes, this pullback has been nothing short of textbook. Markets do see a roughly 10% or even slightly worse pullback roughly every twelve to 18 months. So nothing really that shocking has happened so far. We’ve even seen the markets get to 19.8% down from their highs. You know, that .2% away from a bear market and rally back to all time highs from there and not continue into a bear market. So this we continue to see is really a run of the mill pullback and a fantastic buying opportunity going forward.

We want to see Monday’s lows hold. And if we did happen to go below those levels, we’ll reassess, we’ll look for lower support. But make no mistake about it here that we don’t expect that to be the case. And if it were in the off chance that it were, we’d likely look at it as a buying opportunity here as well. You know, again, the pullbacks hurt. They always do, especially when you have the semiconductors leading lower. Right? You never want to see that happen. But now, especially in today’s action, it’s looking like we’re going to get a fifo kind of market.

First in, first out, the semis led lower and today they led in a big way to the upside. We continue to expect the semis to lead to the upside. So back to the fear topic here for a second because this is one area that really has us getting even more bullish here. And that continues to be sentiment. First off, the fear and greed index. Even after you’re rallying off the Monday’s lows this week, fear and greed remains at extreme fear levels, just at the a 24 out of 100 right now. Then today we got back the weekly AAII investors sentiment survey. Bulls remain strong here, down just 4% from last week.

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And still 40% of investors are bullish here. That is, you know, a, I hate to say even high number because we talk about it here often. If bulls right now we’re at 55% on Monday, right? Like after this pullback or this week after this pullback. Yeah. Then we’ll start to get a little worried. But until we start to say at those extremely bullish numbers for week on, week after end, that’s just not what we’ve seen so far. Once we get to that point and we stay at those levels for months and we get a pullback and they remain at those levels, that’s when we start to see that irrational exuberance kind of feel from the market. We’re just not there yet because bears really increased in a big way week over week, up from 25% last week to now.

Almost even with bulls, 37% of investors are bearish. It’s a very divided market right now, though. Only 22% of investors are bullish. That’s down from 30% last week. But that’s the largest increase in bearish investors since November of 2022, which, if you remember, we talk a lot about here, about the October 14 lows or 13th lows from 20 to 22, where we were aggressively buying the market at the time. If you had bought in November as well, when bears increased this massive amount, it would have been a fantastic buying opportunity. So we see that we’re in the same kind of market right now, different scenarios. But if you buy stocks today, buying stocks in this range, we think that over the next 612, 1824 months, you’re going to be extraordinarily happy with your purchase.

And to quote Wolf of Wall street, your only regret will be that you didn’t buy more. All right. One other sentiment factor here that we saw today as well was the put call ratio continues to be elevated here. Another day of readings above a one. We talk about this here often. Anything above a 0.7 is seen as bearish leaning sentiment. Anything above a one is seen as excessive bearishness. Well, today we spent a large part of the day not only above a one, but above a 1.1.

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And we finished at the highs of the day at a 1.19. That, again, excessive bearishness there continues to add to the reasons why we like this market here today. And so that being said, let’s take a look at our market action. As I mentioned earlier. Good day here. And I’ll go ahead and point out this right now, because something we haven’t seen a whole lot of this week is markets finishing at their highs of the day. Even though we finished higher on Tuesday, we finished well off the highs of the day today. We got a pattern change here.

Not only did we finish higher across the board, but we finished at or near the highs of the day today. Again, tech leading and semis leading tech. Exactly. Textbook what you want to see for a comeback from this market. So we’re led by tech, as I mentioned. Nasdaq up 2.87% to 16,675 60. And the semis lead in a big way, up more than double that, up 6.4% on the day today. Next up, small caps up 2.42%.

2084 for the Russell 2000. Next s and P 500 up 2.3% to 5319. And let me take a quick look at this here, because the s, P and the Dow did not pull back quite as much as the Nasdaq and the semis did. You know, the S and P already less than 6% away here from its all time high. And then we had the Dow Jones also up 1.76% today, or 683 points to 39,446 now roughly four and a half percent away. Just four and a half percent away from its all time high. So when you look at it from that point of view, especially in the Dow and the s, piss, that is, a lot of people probably wouldn’t have guessed we’re that close to all time highs. But again, we kind of look at this year and kind of expect a fifo kind of move.

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So tech led the way lower and semis led tech lower. They’ve been the largest reversals as of right now. We’d like to see that continue and continue closing at the highs of the day today. And importantly here to remember is that our major indexes right now continue to be at oversold levels. So again, we’re seeing this as a classic sell off in the market, almost, you could say, run of the mill, and now a classic buy the dip opportunity at oversold level. So we remain long and strong here. Also point out that yields finished higher again here today, up seven tenths of 1% to a 3.99. Did get above a four briefly today, which was actually good to see.

Now, if you’re a regular listener, you know, we’ve been calling for lower bond yields. We’ve said that the Fed has been overly restrictive here. But the recent big move lower in bond yields, and it was a big move lower, had a lot of investors worried about the economic outlook going forward. The recession fears, the bear market fears. Well, strong yields are a sign that those fears may have been overdone. The sell off may have been overdone. Like I said, the reaction to the Japan news. So seeing yields go up in this environment is telling us, hey, the economy is stronger than the initial reaction was telling us there.

So, yes, overall, we expect yields to ultimately continue their move lower. But we want to see it happen in an orderly fashion. Right. We don’t want emergency rate cuts from the Fed. That’s the kind of action that brings uncertainty to the market. Right. Oh, what’s, why are they cutting rates so soon? It must be worse than we see on the surface because the Fed has access to all of the data in more real time than we do. So what are they seeing that has them so panicked that they couldn’t telegraph this rate cut for us? Right.

[00:13:36]:
That freaks the market out. Now, as I talked about on Tuesday as well, we expect the Fed to have very dovish comments from here going forward. Now, just two weeks away from the Jackson hole speech from Jay Powell, we expect a dovish Jay Powell, unless, you know, the market just continues rallying like today, then Jay Powell does like to talk down the market. But by then we, we’ll be back at all time highs, which would be just fine by us. Don’t think that’s going to be the case. Exactly. But hey, we take it. All right, next up here, looking at our internals on the day to day, seeing more improvement here again today.

Advancing stocks beating out declining stocks over four to one positive on the NYSE and just under three to one positive on the Nasdaq. 52 week highs and lows continue to come in. A little weak here. We’ve talked about this here a lot, though. This is a lagging indicator after a pullback like this. Naturally stocks are going to be closer to their 52 week lows than 52 week highs. So no big concerns for us there. We expect that to improve as our markets continue to improve and volume coming in nicely here and much like our major indexes, finishing at or near the highs of the day to day.

So I’m going to rerun a few of these numbers here while we’re talking, just to see we do get refreshes here after the close. Finishing right about the same points here, actually just a hair better than what I had at the close today. NYSE up volume coming in with a big 84.6% upside volume today. Very good to see Nasdaq also coming in strong with roughly 75% upside volume on the day to day. So good numbers overall from the internals. And again, we expect the 52 week highs to lows to improve, but no concerns there from that lagging indicator. Looking at our sectors on the day to day about like you would expect, all eleven sectors finishing higher on the day to day. Tech leading the way, followed by communication services, essentially a proxy for tech.

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As meta and Google are the two largest holdings there. And then industrials and healthcare are laggards on the day, the defensive sector. So again, normal bull market action. Utilities, consumer staples and real estate. Finally here for today, our VRA commodity watch where we saw some more green on the screen today. Gold now up 1.43% to 2467. And just like we want to see semis leading tech, you want to see the gold miners outpacing gold as well, which we got today. GDX, the gold mining ETF up a big 2.42%.

So outpacing gold on the day. Silver now a bigger 2.5% to $27.62 an ounce. Copper still below dollar four a pound, but up three quarters of 1% to $3.98 cents a pound. And oil higher on the day by 1.1% to $76.06 an ounce. And finally for today, cryptocurrency showing some life here a little bit has to do with the recent ruling for Ripple that they are in fact not a security and ripple leading the way on that news. Up well, up less now, but was up earlier, bigger in the day. Now up only 2%. It was up much more earlier in the day, but bitcoin up big 8.24% trying to get back above $60,000 of bitcoin now at $59,619 of bitcoin.

Folks, that is all that we have time for here today. Please be sure to subscribe to receive our VRA podcasts every day at the market close. You can sign up@vraletter.com 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.