In today’s episode, Kip recaps an eventful week on Wall Street and dives into why recent market turbulence reminds him of the early pandemic day, though with a decidedly different outlook this time around. Kip unpacks the impact of shifting trade policies, the crucial role millennials (he dubs today’s "Mrs. Watanabes") have played in keeping the bull market alive, and what the latest technical signal, like the extremely rare Zweig Breadth Thrust means for investors looking for signs of a market rebound. Tune into today's podcast to learn more.

Go look back till the market is closed. Good Friday afternoon, everyone. Kip Herriage here with the daily VRA Investing podcast. Hope you had a good day today. Hope your week was fantastic as well. Don’t know about you, but I’m looking forward to a nice, relaxing weekend. The last few weeks have been, well, let’s just say they’ve reminded us a little bit of the plandemic. Have they not? Very, very similar setup.

I think, I think the outcome is going to be different. First of all, we know it has to be right. We’re not going to have. Unless something drastic happens, we’re not going to have, what, $5 trillion in stimulus, we’re not going to have $4 trillion in quantitative easing, we’re not going to have those PPP loans. What a complete. They did help a lot of companies. Of course, they never should have been offered in the first place, but we found out so much fraud. Imagine that, right? So much fraud involved in those loans.

[00:00:47]:
But we’re not going to have any of that, right? So this is something that Trump went into, I think, with. I think that, I think that if he’s being honest with himself, I think, I think with regret because he is like, I’m not, I’m not here to bash Trump. I’m really not. Look, this guy is legend. Every. I support 80% of what he’s done in both terms, and that includes the pandemic. Of course, it can’t include, well, it can’t include a lot of it, but you know what I’m saying, overall, I support the guy. He’s legendary.

What he’s done so far in the second term has been what we voted for, except for this. Look, everyone gets to make a mistake. And I think that’s what he’ll look back and see. This was because right now he’s negotiate with himself. Let’s be honest, every. He’s speaking it like it’s a little desperate sounding, how often he’s, he’s, he’s talking about changing the terms, etc. But who’s he talking to? He’s literally talking to himself. The Chinese continue to say, we’re not talking to the administration.

So look, I know some people are saying, well, Kip, what are you going to do? You can trust the Chinese Communist over your president because the signs point to that this time. Yeah, I think the answer is probably yes. And the reason really is that this fits the Chinese personality. Right? They are very proud people. They kind of been around a little bit longer than we have. We’re the new kids on the block, and they’re known for staying as strong and they don’t cave. And we saw that again during the pandemic. I think that’s the best example I can give you.

[00:02:19]:
They shut their economy down for over a year, welded people in their apartment buildings because that was what they decided to do. And what are the people going to do? They can’t rise up. They don’t, they don’t have weapons, they don’t have that personality, number one. And they certainly can’t see their social credit score get destroyed. So, you know, look, they’re all, they’re all, they’ve all been propagandized, they are completely trained and the Chinese government has complete control over them. And of course, President Xi knows this. So I think, I think Trump just misread it. But look, we’re seeing signs now that he is pivoting.

And that’s the key point, right? It’s okay to make a mistake, but when you see what’s about to happen, you gotta change course. And that looks like what he’s doing. He’s trying to save face, but clearly the markets are telling us that’s what he’s doing. The markets are telling us this is not going to be, we might still have a recession depending on how bad this whole shipping issue becomes. I don’t know that we’re out of those woods yet. Although I will tell you that everybody I talk to says of the same thing as far as business owners. They say, and I’ve read this in multiple interviews, that they say we are stocking up, right? We are front running. We are front running the tariff policies.

Right. And they call it, it’s a demand pool in economics terms. And I think that’s really happened a lot. Matter of fact, I think that’s the reason that second quarter is actually going to be pretty strong. And so I think that’s another reason the market’s rebounding. If we can avoid the worst of the worst, we, we’ll come out of this and say that this is a bear market that was very similar to the pandemic bear market. It ended almost as fast as it started. And we could, sure, we can absolutely back, back at all time.

[00:04:03]:
Highs by the end of the year. We did it in 2020. Why couldn’t we do it again? So I think this is an opportunity. We made that decision today. If you, if you, if you read our work this morning, we focused on our technical and fundamental reasons that we think the lows are in now. We still could have A retest, that’s not a problem. It’s not that much further from you, frankly. What is it, 6, 7% further from here? It’s not a big deal.

But. And they’re very healthy, by the way. Most you very rarely do you see V shaped bottoms. Typically you get a retest and those are very healthy and produce great buying opportunities. But the reason that we changed our tune this morning is because of these technical reasons. First of all, yesterday we got a Zweig breadth thrust Buy signal. Marty Zweig. This is named after Marty Zweig.

Legends, no longer with us. But you know, Marty’s wig is also famous for something else. Do you know what that is? Marty’s wig is the first person to say, don’t fight the tape, don’t fight the Fed. There’s a lot of history with this guy and it’s good, you know, it’s good history. I happen to know another story or two about Marty’s wig that I’m not going to say right now because it might, it might taint his image just a little bit. But he made his money. I’ll just put it this way. He made his money in the fund management business, not as a fund manager based on returns, okay, but still the guy’s legend.

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I really don’t want to tarnish his name because this wide breadth thrust, it is legendary because it’s so rare. Since 1950, we’ve only had 17 of these. We just had one yesterday. And here’s the history of these. In all 16 cases one year later, the SP 500 has been higher by an average of 23.78%. It’s also been higher in every case six months later with gains of 16.3%. So that’s a hard. That’s called a repeating pattern.

That’s a repeating pattern that you really want to gamble on. Hey, if it doesn’t work this time, it’s hard to blame anyone for listening to it because that’s how reliable and what a high probability signal this is. We also found out, and this is thanks to Ryan Dietrich, just did a great work. Seemed like a great guy too. He’s everywhere, by the way, works very hard. He put this out yesterday and I’ve since confirmed this. The SPF 100 has been up, was up before today, was up 1 1/2% for three straight days. In the past when this has happened, I don’t know how many times this signal has happened.

But this is also impressive. In the past, every time that’s happened one year later, the market’s been up. No, I’m sorry, it’s happened 10 times. It’s happened 10 times. That’s not a whole lot since 1950, is it? But every single time, 10 out of 10 times, the market’s been higher one year later with an average gain of better than 21%. So you know, when you see those kind of things and you know, we, we, we like high probability, high probability signals. We like repeating patterns that hold up. That’s what this is.

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It’s very hard. Especially you know, look, anybody can fight through the next six months to a year, right? We’re long term investors anyway, so that’s that, that’s, that’s what we did. We added a, A new, a max 7 position today in the Vorg portfolio. If you’re with us here, you know what that was. And that gives us two. The other is Tesla, of course, which we talk about here a fair amount on this podcast. Tesla was up big today, up almost 10% today at up to 25 bucks. This year at 285 found out the Department of Transportation federally, right has made it much simpler now, has given a, laid the groundwork to go ahead and have a full rollout for self driving.

So instead of having to get these approvals state by state, this eases that there’s now federal approval for this because streamline all regulations for self driving cars. That’s also good news for Waymo. But if you know the Waymo story versus Tesla, I think to me it’s an easy one. Look, I think there’s more than enough room for two autonomous vehicle companies in this car, in this country to exist. Of course Waymo is owned by Google. But I think the stories as we’ve looked into it is crystal clear. Tesla has the real advantage here and that’s the horse that we’re betting on. The reason that’s such big news, of course, is because next month, almost next month in June, the rollout of the Robotaxi begins in Austin.

This is going to spread very fast. Look, they’ve already been testing this privately, so this is not really going to be new. If you have a Tesla and you use FSD as I do, then you know that it works unbelievably well. And, and it’s exciting. You know, this is the future. This is the future. And so as I wrote this morning, Tesla’s market cap right now is a 900 and it’s a little bit higher after today. But right now Tesla’s market cap is $917 billion.

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Right? This is going to just alone, just the Robotaxi network and the ability for everybody to buy a car with fsd and remember they’re going to have enter into licensing agreements with other car companies, otherwise they’ll be left in the dust. So there’s a lot behind this that’s really big. This is going to add trillions to Tesla’s market cap. This is a slam duck buy. That’s been our approach for some time. Of course, we went through a really rocky period with Doge and half the country decided they want to firebomb Tesla and Tesla dealerships. How crazy are people in this country? Right? Oh my goodness. Right? I just, you just can’t believe someone would risk going to prison and risk their entire life because of hatred for a car company.

What is going on? I think most of these people were paid to do it. But like, there’s a lot of insanity in this country. We know there’s a real problem. And I feel for these people, I really do. But you know, I guess, I guess when you have a break, you have a break. And I think that’s, that’s all you can say about, about these folks that are clearly mentally troubled. Okay. I think a lot of that has to do with medication, frankly.

But they’re broken and I mean, I just wish them the best. I hope we find a way to change that. But anyway, good news for Tesla today. Stock was up big. I think that we’re just scratching the surface. Our year in target still 500 bucks. We may even raise that by year end. Remember, we just reduced it from 700 to 500 because the calamity went on.

[00:10:28]:
But our 2028 target remains $2,000 a share. I really think we’ll be on the low side there. This will be a $10,000 stock. Now they may split it several. They will split it several times. But at the end of the day, from, from this price, this will be a $10,000 stock. It’s the number one stock, the innovation revolution in our opinion, and we continue to recommend it. We buy it monthly as part of what we believe.

What we do with our 10 baggers is monthly dollar cost averaging. And that’s absolutely what we, what we’re doing with Tesla. And the fundamental reasons I mentioned earlier, they’re not just technical reasons, but fundamental reasons. First reason is Trump blinked. I mentioned that a minute ago. He’s blinked, but he had to. He had his me. I talked about this yesterday.

Late Monday, Trump had a meeting with leading retailers. It was Walmart, Amazon, Home Depot and Lowe’s. Or I don’t remember, but I think there were four leading CEOs with Trump. There may have been more, but it was very odd because we didn’t hear anything that came out of that meeting. I knew right away, like, okay, this is bad for Trump, or we’d have heard. He would have walked out with a microphone and wanted to interview him. Right. If it was good, it wasn’t good.

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They told him straight up. This is the quote that’s making the rounds this summer. If you move forward with the trade chair policy as is this summer, the shelves will be empty with prices soaring. So it took a day or two for that to leak out. And now, of course, everyone’s talking about it and Trump has not denied it. So I believe it is exactly what they told him. And that got his attention. What else got his attention? The bond market vigilantes, okay, they get every president’s attention at some point.

I mean, that’s the cartel. You don’t mess with the central bank banking cartel. Right? And of course they control the bond market. You don’t mess with those guys. You just can’t because they run the world. That’s just the way it is. The most powerful cartel on the planet. Of the seven cartels, as Jeremy Griffin taught me many years ago, the banking cartel is the most powerful cartel.

But it’s a lesson a lot of presidents have learned. Trump’s now learned it, too. Look, this is all good stuff because now we can hopefully get out of this and move forward. And now Trump can focus on smart money tariff policy. We’re all in favor of that, but it’s got to have a game plan behind it. And this just did not. This is a reckless rollout. And I think that it’s.

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I think that’s the. I think if you get 100 people in a room, honestly, what I think, I think if you get 100 people in a room, 90 out of 100 would agree with what I just said. It was a reckless rollout. And we saw it with $11 trillion stock market losses. This never needed to happen. It never needed to happen. Now, we may look back on this and go kind of glad did I got to buy a lot of stocks cheap and because I do think this market’s going to be a one, one way. Look, we still could retest the lows.

I said earlier, that’s no big deal. No big deal whatsoever. If we do, we do. But I think over the rest of Trump’s term, I think we’re right back into the innovation revolution. Right back into our. That. That’s the second reason, by the way, that we’re buying here and calling a bottom. We’re right back into the.

Our big bride megatrends. And one of my favorite topics, and no one else is talking about this, so I. And I think I got this right because you’re in the 1990s and 2000s. I’ve talked about this a couple times in the PO and I probably keep talking about it because it’s such a cool story out of Japan. They went through after their attempts to take over the world failed because we woke up to it. They went through two lost decades. Housing prices fell in Japan for either 19 or 20 straight years. It was brutal.

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And we also saw destruction, of course, in the stock market and the currency markets. And then here came these stories about Mrs. Watanabe. And I remember the first few. First few years I heard this, like what? That sounds stupid. What is that? Well, it’s not. It was true. And now it’s part of some legendary Japanese lore that what they call Mrs.

Watanabe’s, which in fact were only 30% female retail investors and 70% male. Those are the estimates at least. They were supporting the markets, especially the markets, the yen carry trade. That’s what they did. And because they’re such great savers, they have so much money, they made a difference. And I guess they acted together something. I don’t know how the word got out, but it was. They were a powerful force.

And what I really believe has happened here, because we’re seeing the evidence of it, retail investors here, which are the millennials. All right, that’s one of our big bribe mega trends. Retail investors slash. Millennials supported this bull market, bear market, bull market, all the way down. All they did was back up the truck and buy, buy, buy it. I’m telling you straight up, had retail investors, millennials not done this, this bear market would have been intense. We almost had a couple of breakdowns here, right? The wheels were coming off. We had correlations breaking down that just never.

[00:15:24]:
That have only broken down twice in history before now. And both of those cases were crap market. The markets crashed. That’s how close we were, folks. So I’ll give Scott Bessant some credit. Hard to give him a lot of credit though, because now we found out he’s leaking information to, you know, private events of J.P. morgan. I mean, I guess that’s good for J.P.

morgan and their reputation, but for everybody else, it’s like, you know, what happened to this is about Main street, not Wall Street. Right. Those kind of things really tick me off. I think they probably do you as well because it just shouldn’t happen. But anyway, bottom line is that I do think the worst is over. I think these technical buy signals point to that clearly. And I do believe the pivot that Trump is making. Look, I hope the guy can save face, but I’m telling you, the damage has been done, the real damage has been done here.

And we saw the poll, Reuters, ips, this poll. And look, I know it’s just one poll, but we’re seeing it in other places. Well, I saw another poll today where it said Trump has lost 40% of the vote of the independent. I don’t know what the exact total does now, but he was like, you know, he won the election because of independence. And so I think it’s really, you know, he talks about this being common sense presidency. I think common sense people are like, stop this. At least tell us what’s the plan here? Because if there’s no plan, what’s going on here? You know, and he’s changed his mind, you know, back and forth, like walking, you know, watching a ping pong match with one guy. So, but, but again, I think that the Mrs.

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Watanabes of today, the millennials, saved the day here. And I do think the worst is over. And that’s all very good news for all of us, right? Especially folks that are, and we hear from you, okay, people that are really going through a tough time here because you want to retire or, you know, your financial planning, you know, just these things are stressful. I learned that as a financial advisor. It’s one of the reasons I couldn’t wait to leave Wall street was because I could not sleep at night if my clients were having a bad time of it. Not nothing to do with me. I was pretty good at what I did. But when the markets drop, what are you going to do? Unless you’re trying to time every market turn, which is very hard to do, you wind up making more mistakes than not.

But when I had clients clearly upset about their portfolio going down, that bothered me, you know, and so what we just went through bothered me. I know it did. You too. And so let’s get this ship righted. Let’s move forward. Let’s focus on all the great things that Trump has done and will continue to do. And then we can just put this, put this behind us. It certainly doesn’t look like it’s going to be as bad as the pandemic was.

Certainly there’ll be no shots for this, nothing mandatory. You have to, you know, fucking lose. Quit your job not to take it. I mean, the insanity that we’ve been through is just the last 20 years. Unbelievable. Since 9, 11, what we’ve all had to go through together, I’ll tell you this much. If we can survive what’s happened since 2001 together, man, we can make it through anything. Seriously.

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Without question, the worst two decades in American history. Not a close second. And I’ve had this debate with many people and they just give up. They go, you know what? You’re right. Right. You’re exactly right, Kip. We give up. You made your point.

Okay, let’s take a look at again the market. A good gain today. Nasdaq especially Nasdaq today up 1.3%. Had a heck of a run here. The semis again, that’s the, that’s, that’s, that’s the, that’s the, that’s the beast that is back three straight days of fantastic gains Today up one and a half percent, led again today. That’s three days in a row we’ve had the semis lead. Nasdaq, NASDAQ leds the market. That is a textbook buy signal added with these wide breadth thrust.

Again, I think we have a lot of reasons to be optimistic here. And we did finish higher across the board. Dow Jones was only up 20 points, but still higher. S 500 up 7 10, 1%. Russ 2000, I think as I see it, finish flat today. I thought that was higher earlier. That may be a bad quote. I don’t want to short the small caps here.

[00:19:22]:
Nope, that’s right, they did. They finished flat on the day. And of course the 10 year yield after topping at 4.51% companies goes now back down to a 4.26%. This is again, we’re back to some normalcy here. This is the way the markets are supposed to operate. The Vix after topping it over 60, now back down to below 25 and likely headed a lot lower. But again, I don’t want to. We’re not out of the woods.

We could still have a retest of the lows. I kind of don’t think we’re going to. I kind of don’t think we’re going to. I’ve been putting it at 50, 50 the way I feel right now with this, this, this wide breath, breath, thrust and the leadership of the semis, unless we get hit, you know, blindsided, I’d say it’s 70, 30. We’re not going to have a retest right. And again, I’m feeling much more optimistic about things than I have now for several weeks. And I like that feeling very much, I have to tell you. Okay, under the hood today again.

Internals today, not great, but they’ve been so strong now, really going back nine, ten days again, that’s what produced the zweig breath thrust is the advanced decline today. NYSE slightly positive. NASDAQ slightly positive as well. Volume today slightly positive. NYSE almost 2 to 1. Positive for NASDAQ again. NASDAQ’s been the beast here along the semis. Victory.

[00:20:37]:
Highest low came in flat today. A sector watch today. Quick refresh. We had five sectors finished higher. Six finished lower. Consumer discretionary up almost 2% today. Again, that’s a tell. Technology of 1.6%.

That’s a telling. These are the groups you want to see. Lead to say it’s more of a risk on environment. This, this, this, this meshes with all the other signs that we’re seeing here now. Commodity watch again. Gold. You just can’t keep gold down. Gold at one point today was what, down 60 bucks an ounce or something like it had been day for yesterday and bounced back today.

So only closing down $29 now. It’s at 3318 silver today. That’s down 9, 10 1%. Silver today down 1.5%. 3298 copper today. Flat on the day. 485 a pound. Crude oil today.

[00:21:28]:
Bouncing back a little bit. Up 51 cents a barrel. 63.30. And finally Bitcoin, 94,951. This up 1.5% over the last 24 hours. Hey, folks, again, have a great weekend. Go out and relax. Do something nice for yourself and we’ll come back here and we’ll get it again next week.

Okay? All right, have a great weekend. We’ll see you back here again Monday after the close.