In today's episode, Kip breaks down another bullish day of market action. Kip emphasizes the continued consolidation in semiconductor stocks and the upward momentum in value stocks, noting notable performances from leading tech giants like Apple and Amazon. Lastly, Kip covers the VRA's July outlook for our markets, tune in to today's VRA Podcast to learn more!

Don’t look back because the market is closed. Good Wednesday afternoon everyone Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Markets had a pretty good day today. All three major index closed higher on the day, a little bit off the highs, although the Nasdaq did close toward the highs of the day, up 88 points. That’s up just right at one half, 1%. Dow Jones finished up 16 points after being down as much as 150 points at the open this morning. So solid, come back there.

S&P 500, up eight points today. Again, that’s one 10th of 1%. And the only index finished lower was our fourth index, not considered to be a major index by most. That’s just because it’s been a horrible index for at least two years now. That’s rough. 2000 small caps finishing down two tenths of 1%. And by the way, that’s another reason that this bull market is yet, really yet to get going. There are a lot of indicators, right? A lot of indicators that tell us we’ve yet to get to the really exciting part of this bull market, because these happen in every big bull market.

This qualifies, right? This qualifies as going to be a very big bull market. But when you see our indexes hovering at all time highs, and the fear and greed index today is at 39, Ms. Tyler just reminded me, 39, that’s in fear territory. That’s a disconnect when the markets start to decline. But the fear and greed index, these other indicators, when they stay elevated in greed territory, not fear, but in greed territory, then we’ll have a problem right now, sentiment, flashing all kinds of big buy signals. That’s one thing. The other thing, when this bull market really gets going, guess what’s going to play catch up? Small caps roast 2000, which is still, what, 15, 70% below all time highs, maybe more. In this recent downdraft roast 2000, small caps will also get going because the rising tide will eventually lift all boats.

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That’s yet to happen. And of course, the, the biggies we’ve talked about here for a lot, a lot of the time over the last year, plus, we still yet to see the IPO market come to life, yet to see the mergers and acquisitions market come to life. And again, these are all things that happen during the course of a strong bull market. We’ve just yet to get there yet. So a lot of markers that tell us we’ve got a ways to go before we need to worry about being concerned about any kind of significant top. And I’ll tell you also if I’m a bear. Bears have just. This is a bad time to be bearish.

It’s a really bad time to be bearish. And we got more evidence of that this week. They finally took down Nvidia and the semis, right? Nvidia and the semis SMH, Semi, ETF, both fell as much as 18% this week, actually from Friday morning’s highs, 18% from the highs. But the rest of the market, what did it do? Kept going higher. We’re seeing consolidation in semis intact as value stocks got life. And as the, as we’ve covered here often, as the percentage of the sv of 100 above the 15 to 200 day has actually started to grow instead of going the other direction. So we’re not, we’re not seeing any kind of validation whatsoever from the broad market that a, this breather that’s taking place in the semis is going to spread. We’ve, we’ve covered this chart so often with, with you guys over the last 2021 months.

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It’s a semiconductor, the most important chart out there, and we shared this, this morning with our subscribers. The single most important chart of this bull market continues to be the relative strength chart of the semiconductors to the S and P is the largest and most important equity index on the planet. And the semis are the market tell and they have been since the birth of quantitative easing in 2008, 2009. So we track these in relation to each other. What they’ve shown us are two very clear things for the birth of this bull market. Again, 2021, months ago, the semis have led the market higher. It’s crystal clear in this chart. The other thing has happened and there’s a very tight, almost perfect bullish channel that’s taking place in this relative streak index of the semis SB 500.

And it served as a perfect buy signal and short term sell signal as far from a market timing point of view. And just again, on Friday, this relative strength index comparison hit the very upper line of that bullish channel where it took a breather. This is now, I don’t know, the fifth or 6th time that this has happened. From the birth of this bull market, this has happened. And you know, there’s no rule that says we got to go all the way to the lower trend line. But again, the point is, as long as we remain within this channel, that means the semis are still leading, that means the market is still going higher and that we’re going to, we’re going to want to continue to be long this market, we think again, we’re very early in this bull market transports today. Also good to see this transports today. Finishing up one and a half percent.

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They had a double dip down to a double bottom and also touched the 200 day moving average last week. Good to see them along with other value stocks, get lags. Again, that’s that rotational action we’ve been talking about here. That’s so bullish. And again, it really is textbook bull market action. Textbook rotational action. These are the things that happen in a bull market and it’s, again, textbook is the word. I apologize for over using it, but it really is.

It is textbook as long as these things keep happening. Those are repeating patterns. That’s an investor’s best friend. Repeating patterns are the basis of technical analysis. So it’s all fits together very nicely in this bullish scenario that continues to play out also today. This is Tyler again. Tyler. Tyler tracks all of this stuff.

The generals, the generals, remember the generals, they led, then they got weak and everybody said, well, the generals are going down. That means the rest of the market’s going to go down. That didn’t happen, did it? Now what’s happening? The generals are leading to the upside again today. Apple up 2%, getting closer again to another all time high. Amazon today at an all time high, up 3.7% today. Amazon today joined the $2 trillion club today. So we have three members of the $3 trillion club. That’s Nvidia, Microsoft and Apple.

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And then we’ve got a new entry into the $2 trillion club, and that is Amazon again. Another general leading the way higher against Amazon today, up 3.7%. And then Google again, another major general today up, I’m sorry, today was flat at 184, but that’s right, at all time high. Matter of fact, it’s a half point away from all time high. So the combination is that, you know, we’re now getting very near to something that’s pretty exciting if you track seasonality and you can track fund flows, because now in two days, we have two trading days left before we get to the start of the third quarter. Can you believe it? Another year that is absolutely flying by. But front running is real. I believe that we’ve already seen it start, probably started yesterday.

We’ve seen again, this rotation has really had value stocks seeing front running action as early as three, four days ago. And now it happening back in the semis. And tech Nasdaq again today up a half percent. The semis were down today. Right now, 1.6% down on the Microsoft Micron. Excuse me, just another semiconductor stock just reported earnings. That stock is down in the after hours on that news. Down right now.

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Seven, no, down 6% on the day. In the after hours, great earnings, a little disappointing. I guess they have great forecasts going forward, their guidance, but I guess it wasn’t quite enough. Of course, by tomorrow Micron could be up 5%. That’s been a pretty common theme. It has not paid you to act on the initial move. And so again, we think these chip stocks have a world of Runway in front of them. We don’t own Micron, although we do own an ETF that owns Micron along with Nvidia and the others.

But again, this chart pattern is very constructive, as with the cases, most of these semiconductor stocks, but front running covered this, this morning we’ve actually been talking about on the podcast here. Well, here’s what’s going to happen. Beginning on Monday, July 1. On Monday, we’re going to have a lot of money coming into this market. All the retirement money, pension money, 401K money, comes in share buybacks. So I think you’re going to see, I think tomorrow and Friday you’re going to see a continued front running into the market. Of course, there is some trepidation about Friday’s inflation data. We got the PCE data, the defense, as they call it, the Fed’s preferred inflation data comes out Tuesday, Friday before the open bonds were off today, yields were higher the ten year back to a 4.31%.

Of course, it’s still well below the 5% level of fourth quarter of last year and the recent four 4.7% high. What do I think? I think that making predictions about any single government piece of economic data is a fool’s errand. But I’ll go on a limb and say it’s going to be friendly as almost every inflationary statistic that we’ve seen over the last several months had the trend has been for more disinflation taking place. We think that continues. Yeah, I think Friday’s PCE data will wind up being perceived as positive for the markets and again, looking for front running to take place tomorrow and Friday, I will be surprised if the markets don’t get some juice into them over the next couple of days because we also know against seasonality, seasonality has been so consistent. However, June has not been a great month for the markets in a presidential election year. This June, as Tyler covered yesterday, this June has been very good. Nasdaq of 5% semiconductors.

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I think Tyler says yesterday up 7% and it was really the second half of June, that’s been a little weak. Now, July is a different story. July over the last decade has been up nine out of ten years with an average gain of 3.71%. We also know that July is the best, is the single best month of the year for the queues Nasdaq 100 with an average gain of 3.5%. So what we also know is, as the semis and tech go, still goes the broad market. Again, another indicator that seasonality should be bullish for the markets as we enter July. Finally, and we got this last night from our friends at Stock traders Almanac and Jeffrey Hirsch, Yale Hirsch’s son, who’s now carrying on the business. This is a, we’re in.

We’ve entered a very bullish timeframe right here. There’s a twelve day run that started yesterday where the Nasdaq has been up 30 of 39 years with an average gain of two and a half percent. This runs from yesterday through July 12. So again, seasonality analytics fund flows. You know, of course, the trend, right. There are a lot of reasons to be bullish here on this market. The internals also got better today as the markets wore on. Pretty ugly this morning at the open by the close, completely different picture.

Again, that’s another change in tone that we’ve seen of late because the internals were horrible for about a month now. They’re starting to get much better even today. Again, kind of a mixed bag today, some slight gains still. Nasdaq had almost two to one positive volume. Nasdaq did have slightly negative advanced decline and also had about 100 more stocks declining, hitting a 52 week low than a 52 week high. But still, this is a solid number today. NYSE, not quite as good, but nothing horrible here whatsoever. Only had about 300 more stocks declining than advancing.

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Volume was negative by only about $400 million worth of trading. That may sound like a lot. It’s not. And there were only 15 more stocks declining, hitting a new 52 week low than hitting a new 50 week high. So the bottom line is the internals, along with the rest of the broad market, have been getting better again. This is a bears worst nightmare. You finally get the sell off that you’ve been dying to see, and Nvidia and the semis, you finally get that again, 18% decline in just three days. And what happens? The rest of the market is rotated into the internals, get better again.

These are very bullish indicators. They continue. As a reminder, we may be making support for some portfolio changes in July, maybe by mid August, because that’s when the, that’s when the seasonality does change, tend to have market peaks at the end of August in a presidential election year. And of course, we’ve got a lot to be concerned about, about any insanity that might take place going into November. So just a heads up, you know, we’re fully positioned here. We have taken some profits here. We’re fully positioned. We are looking for a strong rally to continue.

We may be using that to raise some cash and to be prepared. Maybe even put a hedge on, maybe put a volatility hedge on to make sure that if you have a decline, we’ve got some insurance in place and the insurance will pay us. And if we don’t have the decline, yeah, we may lose money in insurance, but we’ll make much more than that with our regular positions. Of course, that’s what insurance is for. So in our sector watch today, we had. Where is my, let me pull this screen up. Here we go. In our sector watch today, we had not pretty here.

[00:14:11]:
Eight of eleven sectors finished lower than the day. No real damage done, though the worst case was energy. Energy stocks have been trading much, much better. Not today. Energy stocks down eight tenths of 1%. Financials down four tenths to 1%. Again, no real damage done to the upside. Consumer discretionary up a big 2% today.

Technology again up today, 14th to 1%. Other than that, a very quiet day, even though again eight of eleven sectors were lower on the day. And our commodity watch get some nervousness, some trepidation about. We’re going to see from this PCE inflation data on Friday, gold today down dollar 21 now 03:09 the high was 23 34. So we saw a reversal around midday. Again, some nervous about Friday. We are buyers on this dip. Same with silver.

Silver today was down three tenths of 1% at 29.08 an ounce. Copper today up a penny a pound at 437. Crude oil today up seven cents a barrel at 80 91. And finally today, bitcoin. Bitcoin has had a pretty decent rally from 58,000 and change, the low of a couple of days ago. Now back to it’s down on the day, but now back to 60,900. That puts it down about 1.5% over the last 24 hours. All right, folks, that’s it for the day.

Hope you had a great day. You have a better night. We’ll see you back here again tomorrow after the close.