In today's episode, Kip takes a deep dive into the recent tech-led market movements, the crucial August 5 lows which, and the much-anticipated August jobs report coming tomorrow morning. Beyond that, we explore the strong underpinnings of the structural bull market, the potential influences from the upcoming election, and the exciting prospects in gold, silver, and bitcoin. Tune in to learn more!

Don’t look back because the market is closed. Good Thursday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Listen, we’ve already had, we had a members podcast today, so I don’t want to repeat the same things too much here, but for all of our non VRA members, let’s get right to it, because there’s a lot of moving parts here that matter in the short term. And we saw a little bit of a hint in that in the market today, tech led the way higher. Nasdaq is only index that finished higher than the day. But again, we think that the lows are, well, we don’t think.

We’re pretty certain. All right. I don’t say that often because the market loves to make a dummy out of all of us from time to time. But those August 5 lows look to be the lows through year end. That means that semis and tech have bottled. So we’re buying those here. We’re buying certainly on dips. We think they’re both cheap.

They look cheap on the charts. They’re approaching heavily oversold levels now and on a short term momentum oscillators, and they’re getting there. So both SMH and the Q’s, Nasdaq 100, we’re long that group, and we like that group here, certainly by on pullbacks. But it’s a buy really either way, because what’s coming up here, right. We’ve got a lot of action items coming up starting tomorrow morning before the market opens eastern, we’ll get the August jobs report. Now, if you’ve been listening to our podcast this week, then you know what I’m about to say. We see this report as a win win for the market. That’s the setup.

[00:01:37]:
Okay. The markets have gone from extreme robot to heavily oversold, and they’ve done it with poor seasonality, which, of course, September is. Everyone knows it’s the worst month of the year, but that’s a very crowded trade. Everyone’s aware of it. That doesn’t mean seasonality doesn’t matter. It doesn’t mean September still will not be a really bad month, but it does mean that more people than ever are playing that trade, and that’s typically when they don’t work as well. Just an observation. But in the shorter term, we do see tomorrow’s jobs report as a win win.

Okay. The estimates for about 161,000 jobs to been created in the month of August. If that number is exceeded, the markets won’t believe it because they just downgraded job revisions over the last year by 800,000 jobs. Okay. So if it’s a beat of the markets and go, we don’t believe you, what’s the real number? And so if it comes in less than 161, the markets are going to go. Yep. See, we told you the economy is weakening. Now the Fed’s got to cut by 50 basis points.

So that, that’s probably, that’s probably going to be the outcome tomorrow because we think they should cut about 50 basis points. They meet. By the way, that’s our next front running item, isn’t it? September 18 is when the Fed’s going to go into a meet to cut rates. But remember, this is the beginning of a rate cutting cycle. Right. The beginning of rate cutting cycle. That means that over the next probably six months, we’re going to see maybe 100 basis points cut, maybe 150 basis points cut off the fed funds rate, which is currently 5.33%. So this is the beginning of a rate cutting cycle.

[00:03:12]:
So this is going to be happening now going forward. And, you know, then it gets back to don’t fight the tape, don’t fight the Fed. Right. Making a note here for tomorrow’s letter. I’m also going to be on Fox Business tomorrow. I want to cover these topics. So excuse me for a second. Okay.

Yeah. So that, that’s what we’re talking about here. These are the, these are the items being front run now. And we think the worst case is, I think it’s already built in. Again, think it’s going to be a good end result tomorrow. As I’ve said many times, we do not act on numbers. If it’s a, if it’s a government report, usually the first trade is the wrong trade. The first reaction is, is the sucker move.

And the folks that haven’t figured out how this game works, they act on that. That’s not the right signal. The right signal is to fade, to fade that initial move. And so even if it’s a bad number tomorrow, we get a bad sell off in the market in the morning. We’d be buyers of that. So again, I think we’ve got, I think the market’s setting up here for a rally. We think semis again and tech have already bottomed. And that’s going to continue to be our impetus for a move higher, because at the end of the day, we’re in a structural bull market and that overcomes weakness of seasonality.

[00:04:31]:
The leaders of this market, the semis, tech, will continue to lead higher. They’ve had their correction semis had a 28% three week bear market. That’s over with. That’s how we see it. If those lows are violated, we have a whole different ballgame to talk about. We don’t see that happening. We’re pretty confident, has been very confident in this call. And yeah, we’ve got a lot of things ahead of us.

Look, the election, we know the risk, we know they almost killed our president, and we know what have happened to both the market and the economy, and more particularly, maybe possible civil war in this country had they succeeded. So you can’t put anything past these evil people. So, yeah, there’s always a risk of something like that happening before the election. It’s elevated because of Trump and what he represents. So I fought nobody for wanting to have a little more cash on hand than normal. Maybe a lot of cash, maybe have a hedge in place. We have our hedge with Uvxy for the portfolio, and I understand it totally. But I’m telling you, the strength of the structural market, the strength of the consumer and a structurally strong economy, I cannot tell you the amount of pushback I’ve gotten on saying that over the last couple of years.

Tyler, myself, I mean, we wrote the big bribe because we were shocked by what we were finding out about the strength of the consumer. I don’t believe the consumers. And I think with the facts back this up. Even though inflation has been horrible, we know a lot of the country is struggling. I get all that, we get all that. But the America that matters to the markets, right? The first America has rarely, if ever, been in better financial shape. And we’ve covered this often here. I’m not even going through all the all time highs we covered over and over and over again.

[00:06:13]:
You know what I’m talking about, right? Consumer net wealth worth all time high. Home prices all time high. Net equity in home all time high. A third of Americans own their home outright without a mortgage on it. All time high. The last 15 years, both consumers and american companies have cut debt by 25% to disposable income. Corporate debt to market cap is at 50 year lows. Right? These are, this is the structural strength I’m talking about.

This is why we’re in a bull market. This is why the market will continue to go higher. And if Trump wins, just imagine what all those big time bears today, all those big time bears, and the people that have all their money in money markets and all the perma bears out there, what’s their position going to be come November 6 or whenever we find out who won the election a week or two or a month after label. But all of a sudden, if Trump wins all these bears, they’re going to flip to bulls and you’re going to see a flood of money come off the sidelines into the market. I think the market’s discounting that. I think it has been. So, you know, that’s, again, that’s, that’s, that’s, that’s the market front running and discounting what it normally does. Make another note there.

[00:07:28]:
Okay. So that’s our view on the market. That’s our view on how things look tomorrow for the jobs report. What else here. Again, also remember, this is big, another of our, of our macro themes, a number of our base cases, right, as rates continue to fall. And by the way, the ten year now is down close today at 3.73%. 3.73%. Remember just a year ago, folks, not even that, eleven months ago, right, when we were telling you that rates were going to collapse and everybody out there said, no, the Fed’s going to have to raise more to get inflation in control, right? They’re going to have to rate you going to 10%.

This is 1970s redone. It’s not. It never was. We told you then that this was, the Fed was actually right, that inflation would be transitory because all the money printing. But anyway, that’s, that’s, that, that’s now been remedied, has it not? Ten year been down to a 3.73%. Let me tell you where that is. We are off just, we’re, we’re almost at, we’re right just above the lows of the year, which were 3.669. Again, we’re 3.73%.

So we are probably one economic report away from a new low, which would be a 13 month low in ten year yields, which will continue to go lower as the Fed aggressively cuts rates going forward. And not because the economy is slowing dramatically. That is not the case. It’s because inflation is collapsing. We have disinflation. It’s going to continue to fall. The innovation revolution will actually bring deflation with deflationary forces. Those are also being exported from China and Europe.

[00:09:02]:
So, folks, this is the power of this trade, the bond trade is what’s going to also help propel stock prices higher. And that’s why the Fed must cut rates aggressively beginning now, not because the economy is collapsing, but because they’re way offsides, they’re way too restrictive, and they had been for far too long. But again, this Fed only knows how to do one thing, and let’s make big mistakes. This is the fifth major policy here the Fed’s made since Jay Powell got the job in 2018. All that tells us as rates fall, as the dollar continues to fall, it is in a bear market. Look at the long term chart. And as the Fed prepares to cut, we want to own gold, silver. And the miners, they had a pretty good day today.

Gold today finished up $20 an ounce. The miners were up decently. They at one point were up over 2% today, two and a half percent finished up 1%. Love that group here. Really look at the charts again. Look at the charts of the miners and you’ll see what I’m talking about. Stair step higher. These pauses are buying opportunities.

That’s how we’re treating it. We’ve been right on gold. We’ve been right on the miners, and we believe this is just the beginning of a massive bull market. All right, what else today? Let’s take a look under the hood again. First of all, the markets, Dow Jones said he finished down 219 points. It had been down 370. So pretty good. Come back from that.

Down a half percent. Roast 2000 down six tenths, 1%. Spf 100 down three tenths of a percent. Nasdaq, again, our leader in the day, finished up 43 points or a quarter of a percent. Again, the VIX today, even with the Dow down big, the VIX was down another 6% today. It’s. It’s very likely that those highs are in. Okay, very likely those highs are in for the VIX.

[00:10:45]:
And again, it is September. October is known as crash month. Again, having a hedgehead got no profit. That all makes sense. That’s what we have in place in our portfolio. So the internal segue, we’re actually pretty good. Again, assuming what the market did today, advanced decline was only slightly negative for NYC, about a couple hundred issues. Also only slightly negative on Nasdaq.

By about 400 issues we had, volume was actually positive on Nasdaq. We had 70, 57% upside volume, just the inverse of that on NYSE, 57% downside volume. Again, kind of non events kind of wash each other out. And new future highest lows came in positive, 375 to 206. So again, this market looks backing and filling. Right? The lows are in August 5 lows are in. Everything else is backing and filling work. Continue to work off those previous overbought readings we had and now hitting oversold readings, setting up.

But we think a great move higher coming up here just as everybody’s getting negative about seasonality. Right? We had eight sectors finished lower. Three finished higher. No big shakes either way. Consumer discretionary up 1.4%. That’s another all time high. Healthcare down 1.4% on the day in our commodity watch today. Again, gold today at $20, announced at 25.46.

Just a phenomenal looking chart here. Long term mega bullish chart. Own physical gold and silver. We’re more gold bugs and silver, but we own both. Silver today up 2% at 30. At 20, 914 an ounce. A little foreshadowing of where silver is going. Copper today up six cents a pound at four hundred fourteen a pound.

[00:12:28]:
Copper looks great here as well. Of course, global economy will prove that with doctor copper getting his legs back underneath him here. Crude oil today back again below $69 a barrel, 69.17 just down slightly on the day. And finally, bitcoin, which has been trading horribly now back to 56,000. Has been between turning 55 to 59 the last couple days. Down today over the last 24 hours, down 3.3% in 56,118. Look, we’re buying. We’re buying it using monthly dollar cost averaging.

We love bitcoin here. We have for a long time done very well in bitcoin. It’s been very frustrating post the having and the issuance of these ETF’s and buying like crazy. Right. So we. A little bit of a low period, but again, you got to go back and look at the. Go back and look at what bitcoin has done after the previous four halvings. Excuse me, previous three having.

And I mean, these are, these are monster moves that take place over the next twelve to 18 months. They’re obviously still in that window. It’ll happen when you least expect it. There is no better supply demand story. And we’re very happy buying bitcoin cheaper here because we know we have a pretty good idea of where it’s going to be going forward. All right, folks, that’s it for today. Hope you had a great day and even better night. We’ll see you back here again tomorrow after the close. Bye.