In today's episode, Tyler breaks down a dynamic week in the markets, with some interesting developments worth noting. Despite finishing mixed on the day, stocks had a strong week overall, including a few new all-time highs. As we wrap up Q3, Tyler breaks down what the VRA is expecting as we head into the final quarter of this election year. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Friday afternoon, everyone. Tyler Heritage here with you for today’s VRA investing podcast. Hope you all had a great day today. A great end to your week this week. It was a good week for the markets this week, although today we did finish mixed on the day, but again, overall a good week for the markets. We’ll dive in to some of those weekly charts here today. But first, it was an eventful end to the week, and it was kicked off this morning with the latest look at inflation as we got PCE data, the personal consumption index here, which is the Fed’s favored gauge of inflation, again showing some positive results here coming in this week.

Below expectations, still above the 2% target set for the Fed, coming in at 2.2%, but again, better than expectations. And that’s what mattered for the markets here today. Expectations were for 2.3% here and futures shot up out of the gate today after this data was released. And we opened strong as well with all of our major indexes positive across the board here. But we did end up finishing, at least for the semis and for tech, closer to the lows of the day than the highs. But still a strong week here. Take a look at this. The semis finished down today just over 2% and still managed to hang on to 4% gainshead for the week, for SMH this week.

[00:01:51]:
So an impressive week here. Certainly an interesting day today. And like I mentioned earlier, it was a mixed day for our markets, but our market internals continue to come in just garlic strong here. So we’ll cover that here today as well. And as we now wrap up the month of September, we just have one trading session left here. Some of the action this week could be attributed to front running of a new month and a new quarter here. Now, as Kip talked about on his podcast yesterday, October of election years can be weaker months, but the good news here is that in presidential election years after the election is over, it’s usually off to the races for our markets, with November and December being two of the better months of the year in a presidential election year. Now, that doesn’t mean that we are going to get a weak October, as we’ve talked about here often as well.

We’ve already seen it from the Federal Reserve by cutting 50 basis points, affirming that they are trying to help get Kamala Harris elected. So we certainly don’t put it past the powers that be for from goosing this market higher in order to help the Democrats election odds here, because we talk about this a lot and we wrote a book about it. As a matter of fact, the big bribe, when we have stock markets, major indexes, sectors and individual names at or near all time highs, that means that portfolios are also near or at all time highs, whether it’s a retirement account, pension accounts as well. You know, when you go to check your retirement account and you see it’s at an all time high, you think that things are pretty good, right? Despite what you might see in the news headlines or that all of the factors that we talk so much here about that is what we refer to again as the big bribe. So it doesn’t necessarily mean that we’re going to have a week, October here. Just historically speaking, October of election years can be a volatile month and typically a weaker month as well. Now, again, back to the good news. As I mentioned, November and December are typically strong months in election years, and they’re even stronger when the market goes into those months.

[00:04:24]:
Over, up over 10% already on the year, which we are firmly in that category right now. So we do expect a strong into the year. We’ve been talking about that for some time. But as we enter the month of October, we are also at heavily overbought readings here. We’re not quite yet to extreme overbought on steroids. We call that our highest level distinction of overbought. We’re not quite there yet, but we’re certainly working on it. And again, as I talked about on my podcast Wednesday, this is a time to use discipline.

When the VRA investing system, when our VRA momentum oscillators start to hit these overbought readings, this is when we put a pause on new purchases. We’re big believers here in monthly dollar cost averaging. We think it has an important role to play in everyone’s portfolio, you know, setting aside a certain amount of funds every month where essentially set it and forget it. Now, in a time like this, again, we do want to pause those purchases and potentially wait for a pullback. That doesn’t mean that we’re not going to be buying stocks in the month of October, because if we do get an October pullback, we will absolutely be using that as a buying opportunity. But again, when we hit these level of overbought distinctions on the VRA investing system, this is when we use discipline here, especially going into a month like October, which even outside of election years is a volatile month. But the good news with that is it’s also typically a bottom kind of month, meaning that the lows that are set for the year take place in this month. Now, not lows for the year, meaning we’re gonna take out, you know, the early August lows.

[00:06:12]:
On the pullback that we saw from July to August, we think that those lows are in place. But if we got a pullback, we likely would view that as the new lows heading into year end and a phenomenal buying opportunity. So all that being said, to say that with no concerns for us here, again, just using discipline and the VRA investing system, we think it’s going to be a setup for a great buying opportunity. And again, at these overbought levels, we’d like to work off a little bit of those overbought readings. We’ve also seen it in sentiment, which has increased significantly. We’re now at a 68 on the fear and greed index. So that’s a little bit below where we were yesterday, but it is still greed territory here. We saw the same in AAII.

We got a slight pullback from the previous week’s reading. We also got a pullback, though, in bearish investors. So fewer bearish investors than we saw a week ago. Now, if we were to get a little bit of a pullback, we think that those numbers would shake up pretty impressively. Because at these levels, you still got a lot of new money in the market. Right. What investors often refer to as the fast money or the dumb money, where they just got into this market because we’re hitting all time highs, they feel like they’ve missed out. But when we start to get a little bit of a pullback, those are also the first people to sell.

[00:07:39]:
Have you tuned in to Kip’s interview on Wayne Allen roots show on Frank speech last night? That’s exactly what the financial mainstream media drives people towards. Right. When you’re getting close to all time highs, you’ve got a ton of just financial commentators talking heads out there. You know, if you’re not in this market, you’ve missed out on tremendous gains. And here’s our higher, our raised price targets from where they were before. And in reality, you’re buying at the top, right? They want you to buy high and sell low. That’s the exact opposite of what we do here at the VRA, and it’s what we’ve done in our portfolio. Right? We were buying stocks in early August when everyone was saying, oh, we’re headed towards a bear market now.

No, those were the lows, right? That was the time to be buying. That’s exactly what we did here at the VRA. Now that we’re at extreme overbought levels. We don’t see this as necessarily a selling event, but rather, again, a time to use discipline, a time to use patience, holding on to the positions that you have. We’re not selling our positions in this environment just yet. We’ll alert you to it if we do decide to do that. However, though, you know, if you’re not in this market yet, there will be another buying opportunity for you to get in. So, you know, that’s why we have the VRA investing system, to remove the emotion from our investing strategies so that we’re not buying high and selling low.

[00:09:08]:
All right, so that being said, again, we’ll look at the month of October as a potential buying opportunity if we do get a pullback. And to wrap up on the sentiment part, if we did get a pullback, we expect sentiment to drop dramatically back into fear mode, most likely. But taking a look at our major indexes on the day today, we did have another all time high today. And as we say here, often new highs beget new highs. And new all time highs are not a bearish occurrence. The Dow Jones up just over three tenths of 1% today to 42,313. Our leader on the day was actually the small caps, which was our only major index not to finish higher on the week. So I will point that out.

Still up nearly seven tenths of 1% today to 22 24. Next up, the S and P 500 was down just over one 10th of 1% to 5738. And lastly here, the Nasdaq, down four tenths of 1% to 18,119 for the Nasdaq. But I’ll say it one more time here. We want to see tech and the semis leading the way in. The semis were our best performing sector on the week this week, up 4.14%. So could weak even after pulling back 2% on the day. So we were up as much as over 6% on the week this week for the semis.

So strong week this week overall. Next up, let’s take a look at our internals on the day to day. I’ll get it. Sometimes you get a quick recalculation after the close. So just a little refresh here. Good numbers across the board. Again, we have the Nasdaq lower on the day, the semis lower on the day, and still both the NYSE and the Nasdaq had positive readings across the board here for the internals. Exactly what you want to see.

[00:11:09]:
So let’s see here. They were a little bit more positive on advanced decline. No two to one beats here or anything, but firmly positive for both the NYSE and the Nasdaq with more advancing stocks than declining stocks. Fresh 52 week highs to lows coming in very strong here at a combined over 434 stocks hitting 52 week highs to just 75 stocks hitting 52 week lows. Good reading there. And lastly here for volume coming in just about right at two to one. Positive for both the NYSE and the Nasdaq. So again, on a day where you’re finishing mixed here, these are rock solid internals for the day to day.

So good to see next up here, taking a look at our sectors on the day today. We finished with six out of our eleven s and P 500 sectors higher on the day today. We were led by energy today, followed there by utilities, which let me check that chart really quick. Just shy of an all time high, but looks like an all time closing high from utilities. And as I talked about on Wednesday’s podcast, you got to remember the stock market is a forward looking mechanism. So what do utilities hitting an all time high tell you? Closing at an all time high. What does that tell you? It tells you that investors are looking for lower yields. Utilities are the biggest borrowers of debt in the nation, so they’re very affected by yields.

[00:12:42]:
And today we did have the ten year down just over 1%, still above a 3.7, but a 3.74. No concerns for us on yields at these levels. And we expect the long term trend to confirm what we’re seeing in the utilities, that yields will continue to head lower. After utilities, we had communication services, which is an interesting one because this is essentially a proxy for tech. Names Meta and Google make up roughly 40% of this sector, and it hit an all time high today. After that we had financials and real estate, which I’ll pause there for a second. While the real estate sector did not hit a 52 week high or all time high today, that’s not really what we look at. The real estate sector in the S and P 500 is primarily made up of reits.

We like the home builders. And in this scenario, looking at XHB, the home builder ETF, which hit an all time high today as well. Then for our laggards, as you might expect, tech did lead lower with the Nasdaq finishing lower. Follow there by materials and consumer discretionary. And I’m sorry, I will point out one more all time high here. The industrials did hit an all time high today as well. So again, new highs beget new highs. Finally here for today, our VRA commodity watch.

[00:14:06]:
Let me get a quick refresh of my screens here. Little bit of red on the screen here, but it has been a phenomenal move, hasn’t it, in gold and the miners and silver here as well. Gold now down by half a percent, still at $2,681 an ounce. Silver now down 1.3% to $31.92 an ounce. Copper down 1%. But still, it’s been on a good run, too, at $4.59 a pound. And finally here, oil still below $70 a barrel, but up 1.4% on the day at $68.63 a barrel. Finally here for today.

Bitcoin hit its highest level earlier today since the end of July, got as high as 66,440. It has pulled back a little bit, but still positive on the day of 1.77% to $65,843 of bitcoin. Folks, that’s all we have time for here today. Please be sure to subscribe to receive our VRA podcast every day at the market close. You can sign up@vraletter.com click the podcast link at the top. We’d love to have you with us. You can also check out our transcripts and notes while you’re there. And while you’re there, check out our 14 day free trial as well.

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