In today's episode, Kip breaks down a whirlwind day on Wall Street, diving into the latest market action following rumors of a possible U.S.-China trade meeting—despite China’s denials. Kip spotlights the rare and powerful “Zweig Breadth Thrust” buy signal, a technical indicator that’s only flashed 17 times since 1950 and has a 100% track record of the S&P 500 posting gains a year out.

Don’t look back. The market is closed. Good Thursday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. A lot happened today. We had more rumors of a potential deal with China, at least a meeting between the United States and China on trade. Of course, China denied that, but the move was on.

Maybe some more information has been leaked to Wall street insiders because the Dow Jones today, excuse me, not led. Let me start here. We had a Zweig breath thrust today, right? This is named after the infamous Marty Zweig of of course, long term Wall street fame passed away a few years ago. But a real legend on Wall street. And what it means essentially is this. The internals have been so strong in a short and compressed period of time Brett’s talking about here, that it’s produced a buy signal. This has only happened a few times. Going back to 1950.

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This happened a grand total of, let me get this right, 17 times. So again, it’s happened enough and the frequency that it’s. It’s a more reliable signal, but it’s the kind of thing you pay attention to because it doesn’t happen all that often. Again, 17 times since 1950. This is what matters. One year later, the S P 500 has been up 100% of the time with a return of almost 24%. One more time, it’s happened 70 times. One year later, SPF 100 average return up almost 24%, never lower.

So that’s what we call high probability reliable signal. This will no doubt we run our VR investing system screens tonight. This will change our readings on the very investing system which had been at 5 out of 12 screens bullish. Anytime we’re below 6 of 12 screens, bullish, we’re bearish. We’re in a bear market. Confirmed. And we are still, of course, but this is an important buy signal. We’ll see.

Next up for all you technicians, SB 500, of course, our leading and most important equity index on the planet must get through 5500. We’re now at 5484, 1516 points away from a. And that’s where resistance has been. We’ve been basically a trading range between 5,500, 500 and 5,000 on the SPF 100, 500 point trading range. Each time we’ve gotten back to this level so far, you know, it’s been a sell signal. We’ll see what happens here. I think this is why breath thrust, because so many people follow this. Now I think this is going to bring in more buyers.

[00:02:30]:
They really do. And we may have a window here because run it this morning. Let me get, make sure I get this right too. We had, we got some, now got some really good data from people in the logistics, logistics industry. They’re telling us what we need to look for from a timing point of view based on the amount of time it takes for, you know, for a ship to get from China, for example, to California. Right. And then from there via truck around the country. Bottom line is this.

Until May 10th, until May 10th, there should be no serious economic effects from this trade. It’s an embargo. We’ll call it what it is. Embargo with China. Shipping has dropped precipitously, of course, from the, from the moment that this was put into place, which was, what was that? What has it been now? Been a month or so, I guess. But we’ve seen about a 60% industry wide drop in ocean container bookings from China to the US from that time. So, you know, the issue may come on the back end of this. Let’s assume that something gets done quickly with the US And China.

How long is it going to take? Because those ships stopped coming our way. Right. How long is it going to take to reignite that flame? So there’d be a lot of questions in the back end, I think if, I don’t think I know this. We know that President Trump watches Fox News. I think he had to have seen this yesterday. Based on the latest poll from Reuters Ipsis. The poll showed only 37% of Americans approve of Trump’s handling of the economy. Some people are getting this confused with his approval rating, which has fallen too.

[00:04:10]:
But again, as to the economy, only 37% of Americans approve Trump’s handling the economy. I don’t, I don’t know if that’s accurate or not. I don’t trust any of these polls. I never have. But I will tell you, based on the number of emails that we get every day with 10 to 15 emails every day with people telling us horror stories. Really. And I’ve shared these with you here. I’m going to, I’m going to share one in the morning.

We received this afternoon people that are hoping to retire and now don’t know if they’re going to be able to, you know, when the markets fall 26% in four weeks, it’s a shock to the system no matter who you are and you’re planning on retiring in the next few months to a year. Your plans just went out the window in so many cases. So at least it caused you to take a step back and reevaluate, see if you can afford to retire or not. And how’s your portfolio be constructed at that point, by the way, at 37% rating, this is a regular poll that they do. That’s the lowest that it’s ever been for President Trump on the economy. Of course. He’s always been fantastic on the economy. Right.

Even when we had the pandemic, well, it didn’t matter almost because, yeah, we had a four week bear market just like we’ve got here. But what do we have next? Yeah, we had all that PPP stimulus money. Right. We had $5 trillion in total stimulus money just during Trump’s administration. We got more from Biden, of course, and then we got 4 trillion and quantitative easing. So the money just came rushing into the system. Of course, we finished that year back at an all time high. Right.

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So the difference here obviously is what we’re seeing right in front of us, we’re not getting stimulus money, we’re not getting quantitative easing into the market and the Fed’s not helping. You know, in a normal world, the Federal Reserve would be cutting now. Instead they’re playing the guessing game, really. It’s an ego, it’s a get Trump games. That’s what it is. We’ve been calling that for a long time because that’s exactly what it is. But the good news here, here a little bit today is 10 year yields have fallen. We’re back to 4.305% on the 10 year down to 8, 8 basis points today.

I think enough people are starting to ask Jay Powell the question, why haven’t you started cutting yet? That I think maybe some political pressure will finally be brought to bear on him because clearly Trump’s apologies, not apologized, but took it back like a day or two later, saying that he was going to terminate it just after he said it the day before. So, you know, we’ll see what happens. But this is, as I said before, this is when the Treasury Secretary, Scott Bessett, this is when he should be earning his keep, his job. And we learned they have breakfast once a week, he and Jay Powell. His job is to be that buffer. His job is to be that middleman between the President and the Fed chair, because the President and Fed chair typically don’t speak to each other. Trump confirmed this in an interview yesterday. No, he’s not, he’s not called him, they haven’t spoken.

But that’s Scott Besson’s job. If Scott Bessant’s doing his job correctly. The Fed should be cutting rates pretty soon. Remember, they have a fed meeting on May 7th. That’s the next Fed meeting. So it’s coming up pretty close. So we got a lot to watch. We got the Fed meeting, we got this May 10, apparently, date where we’ll start to feel these tariff issues in the country.

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And we also, as we cover with you here, there are some real issues happening with the consumer. We have a total of 9 million student loan borrowers that are either in default or 90 days delinquent. That’s essentially default. They stopped making payments and collections begin on May 5th. FICO scores have now fallen below there for the first time. FICO scores have fallen for the first time since 2020. We have 6.5% subprime auto loans more than 60 days past due. It’s the highest in 30 years.

And 11.3% credit card balances more than 90 days overdue. That’s the highest rate in 13 years. So there’s no question about it, the economy’s flowing. Trump’s acknowledged that that’s happening and the Fed should be cutting now. We also got some data yesterday. US Manufacturing sector outlook is rapidly deteriorating. The Richmond Fed’s new orders index dropped to minus 26 in April. That’s the lowest in 27 years, folks.

Current conditions index tumbled to minus 30. That’s the second lowest since the pandemic. So look, obviously if we’re talking about this, we know this. Guess who else does? The President knows this. One of his real talents is that he pivots. He knows he can read a room as well as anybody and he knows when to pivot after his meeting with retailers. We talked about this this morning, our letter. He met with the heads of Walmart, Amazon, Target, Home Depot late Monday.

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And it was weird because we got no news from that meeting. So my first reaction was, okay, that wasn’t good, that was a bad meeting. Or that would have been if it’d be good news. Trump, like I remember the retailers, everything is great, no problem there. Trump didn’t say a word about it. Right. Well, now we’re getting. Multiple news services are reporting that the retailers had these heads of retail told Trump that if the tariffs were implemented as is the, the U.S.

would see empty store shelves and higher prices this summer. So again, you know, we’ve got a little time maybe, but this is. Trump did put a 90 day pause on it. So we’ll see what happens next of this. The market action we’ve seen again from insider leaks to JP Morgan and to people inside the Trump administration so they can profit from it. That should be criminal. That’s not right in either administration to do either party to do this. And it’s just as wrong a Republican does it or Trump does it as anyone somebody else does it.

It’s wrong, shouldn’t happen. What happened to this is going to be Main Street’s time, not Wall Street’s time. We’re seeing no evidence of that so far. So, you know, maybe the pressure again is being brought to bear a bit on president and he’s starting to, I don’t know, maybe leak it out that he’s going to keep negotiating against himself and get a deal done. But again, these internals have just been spectacular. Right? And also today, you know, we got again the semi study up 4.8% today there, more than 4% yesterday, folks. You don’t see that very often. Certainly not in a bear market.

[00:10:31]:
It’s, it’s increasingly likely because yes, I do believe something’s going to get done on trade. What a disaster, what an absolute disaster this has been. But I believe something’s going to get done on this. I think Trump knows the seriousness of what’s headed our way. How could he not? Everyone’s telling him the same thing. The data is all confirming it. Okay, he made a huge mistake with the rollout of this. We’ll see what kind of wins he gets in the back end.

I guess it’s too early to say it was a huge mistake, but certainly from this point of view, $11 trillion stock market losses, bear market that took place in a set of about seven days. Again, people’s portfolios being wiped out for what we have to know what the back end here, if he comes with the back end with these deals, right, that helps to reset US Manufacturing and do all the things that he said we have to get done. If these deals that he’s getting done with China, remember, this is only really about China. Let’s remember this. Vietnam is second on the list of worst offenders. And again, there’s just nobody even close to second close to China when it comes to trade issues and the way you’ve been taking advantage of over the years since the NAFTA was passed. Remember if Ross H. Ross Perot had won against Bill Clinton, everybody thought Bush was going to win.

No HR pro. He got 19% of the vote. If he had won because that was his big thing. You know, that giant sucking sound. You know, if Rohit won, he got 19. The most independent ever gotten to this Day, we would never have had nafta. Right. But they snowed us into it and we’ve been stuck with the Dow for more than three decades.

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So you can’t change the past, of course. But regardless, let’s get done what we can get done. Our view from the beginning of this was, why tackle this now? Get the economy rocking and rolling. Get GDP up to 4 or 5%. We were headed that way. Get the Republican base firmly behind you so the Republicans in Congress wouldn’t dare say no to your insane sounding tariff policies. Get all that going first and then tackle on the back end so we have a buffer and a cushion. But Trump.

Let Trump be Trump. He can do what he wants to do. Again, we can’t change the past, so we’ll deal with it. Coming directly ahead of us. Right? But again, solid day all around. NASDAQ up 2.7% again, semi is up 4.8% today. Dow Jones today up 1.2%. Rusty,000s 500 both up 2% today.

The Vix was down, surprisingly, only down one and a half points today. 26.47. I, I think that, I think this wide breath thrust is incredibly important over history. They certainly have been. But I don’t think this is over. I, I don’t, I don’t think this is over. I think we got, I think, I think we might have. I still believe that we could have a retest and that, by the way, retest of the lows with both, be normal.

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Because you almost always get a retest. You very rarely get just a V shaped recovery and a retest would be normal and it’d be healthy and then maybe shake out some of the retail that, by the way, retail investors. All I can do is tip my cap to you. Look at you. Look at Mrs. Watanabe from Japan has nothing on you. What you’ve done is just back up the truck and all of these declines via leveraged ETFs and just backed up and bought them, bought them, bought them. This is millennials, folks.

It’s one of our five big five mega trends. This is the millennials deep pocketed. They believe in the US Economy, they believe in Trump now, and they believe the markets can’t go lower. It’s always by the dip. That sounds familiar because we sit there for a long time too. But listen, we’re still, if you know us here with the vra, you know that we have one hedge on. We just put that on, what, yesterday? Okay. Yeah, we have one hedge on.

Other than that, we’re very long the market, not aggressively long with the leveraged ETFs that we prefer to use. Discipline just says that’s just not, this is not the environment for that. But you know, look, they move so fast. As long as we get the signals right, it won’t matter if we lose, you know, a few percent here or there. We’ll, we’ll make up for that on the back end. If you don’t, if you doubt me, look at our results over the last 21 years and I think that that will be proven to you. By the way, if you’re a VRA member, you’ll know this. Log into your viewer portfolio.

[00:14:51]:
We’ve post every trade that we’ve done going back a decade. We know no one that does that and we believe in maximum transparency. Every trade we’ve done for a decade is in your VRA member site. You’ll see all the results right there. Beat the market 18 to 21 years. Had some really spectacular years and we had a couple, three really bad years. I think this year. Whether or not we beat the market this year is going to be pretty close.

However, I actually think we’re going to smoke the market again this year because our mining stocks are about to go crazy. They’re starting to do it now, right? We’ve had great runs in gold, silver, especially gold, of course. And now the miners, junior miners, are starting to get some juice to them. So I think that with that and other VRA10 baggers, by the way, Tesla’s finally roaring back again, up another 4% today. I think those lows are certainly in big B year. Head up for Tesla and I’ll mention GameStop. You know, again, we don’t mention all of our holdings here because it’s not all members on this, on this podcast. We love to have everybody here.

But I mentioned one this morning right now because you know, we took profits in bitcoin, right? We took profit when we sold our other positions. April. It’s been like three weeks ago now. And you know, we’ve made great gains in Bitcoin, up 2,209% in, in four years. That’s, that’s again, that’s in the portfolio. You’ll see that. But we sold Bitcoin 82,000 and change. Now it’s 93,000 and change.

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That’s like up 10%. You know, we’re up 2200% right now. It’s up. You see what I’m saying here? We always find a way to make up for if we’re a little late or a little early, but GameStop I think is the play that makes more sense than Bitcoin. Here, look, if you run the numbers, if you know, you know Michael Saylor’s, what do they call it? He’s just calling it strategy now, right? It was MicroStrategy. Yeah, just it was MicroStrategy. Now it’s just strategy. And of course Saylor became famous for using a convertible debt in common stock.

By the way, bitcoin trading strategy issues convertible debt and then he uses the funds to buy Bitcoin. And it’s a little more complicated than I just explained it, but not a whole lot really. It’s the way that he does it is pretty unique. But that stock has done incredibly well. It’s outperformed Bitcoin incredibly well over the years. I don’t know the recent relationship. I know his MSTR has been hit very hard in this downdraft but again, over a three year period of time absolutely outperformed Bitcoin. But right Now I think GameStop, I think GameStop has more upside potential than Bitcoin.

They’ve developed or they’ve initiated. We’ll find out more details of this because they haven’t announced, they announced a convertible debt offering. I think it was like $1.9 billion. They haven’t announced what they’ve done if they fully invested those funds into Bitcoin yet. Right. But here you have a company in GameStop and by the way, I’m not talking about. I haven’t been to a GameStop store since our boys were young. So I don’t even know why they still have these.

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But you know, maybe they’ve got some magic potions that’s going to make those stores work for some reason. But the key to this story is they figured out financial engineering. Ron Cohen has figured out financial engineering of our times. So when he gets he obviously it’s been a meme stock. They hate being called that by the way but it’s a meme stock so it’s got a. At least used to have a lot of loyal investors. I still think a lot of those are there. We didn’t buy this stock for that reason, by the way, but I think we bought it because I think they figured out financial engineering and it’s been used in a similar but different way than Michael Saylor is doing it as strategy.

Whereas every time GameStop has a big move higher like it would move with AMC and Trump Media we started both those two did very well knows. But every time the stock would have a big move higher. Ryan Cohen would announce another share offering at the market. Already a done deal by the time you see it. Right. And, and so he did it when the stock had big runs. And so what he’s able to do is build a war chest. And now they’ve got close to 5.

I think it’s $4.8 billion in cash. And now they’ve done this convertible debt offering. I think it’s 1.9 billion of them reserves to invest in Bitcoin. What are they going to do with their $4.9 billion? So a lot of unanswered questions here, but now all of a sudden you got a company that’s going to be have an aggressive bitcoin strategy. On top of that, you’ve got an actively managed company with a CEO that knows what he’s doing. I think you see where I’m going with this. I think that assuming Ryan Cohen does this correctly and he’s as bright as everyone says he is, GameStop has more upside potential than Bitcoin. Okay? It just does.

[00:19:31]:
Because again, it’s essentially a vehicle to own Bitcoin through. So we’ll see how that plays out. I’m not saying, by the way, that we don’t like bitcoin. We love bitcoin. We will buy it back, without question. There’s no doubt about that. What we wanted to see was how would it hold up if we got a retest of the lows, which I still think is pretty possible here. But this is why.

Breath thrust, maybe that throws that possibility out the window. You know, we don’t tell the market what to do. We invest based on what the market is telling us. And right now it’s saying it wants to go higher, but we’ll see how this plays out. But again, I think that owning GameStop is a good alternative to owning Bitcoin. Unless you’re just a bitcoin purist. You have to own it, right? So we’ll come back to that later. But there you go.

All right, let’s take a look under the hood today. Good, good internals today again. That’s why Breathtress would tell you that today. Advanced decline for NASDAQ. Excuse me. NYSE was five to one positive. That’s garlic strong with an 80% upside volume day. NASDAQ also strong, three and a half to one.

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Advanced decline. 73% upside volume, new feature highs. The lows essentially came in flat to each other today. Advances, declines. And our commodity watch, excuse me, sector watch also incredibly strong today. 10 of 11 sectors finished higher on the day. Led the upside by technology at 3.5%. We had, what is this? Five sectors finish up better than 1%.

The only thing finished slower today, consumer staples just down right at 1% today. Commodity watch after gold been going parabolic. And now we had one shakeout. What did that last? A day and a half. And now we’re back up today. Another 67 bucks today announced on gold at 3361. No, we do not think this. I’ve seen a lot of people calling the top in gold.

I, I think that’s a big mistake. I think gold is in a new bull market that’s been suppressed for decades by manipulation. Now no one’s got a crystal ball for sure, but I believe this is the, this is the bull marketing goal that everyone’s been talking that it should have had all these years. It’s underway now. So no, we’re not top calling. No, we’re not thinking about selling gold and silver today. Again up 2%. 3361 silver today.

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Flat on the day. Just cannot get going, can it? Still, Silver is at 33, 55. Had a pretty, pretty decent run too. Copper today up 1% of the day at 488 a pound. Crude oil just barely high today. 50 cents the barrel at 62.79. And finally the day, Bitcoin again. 93,257.

That puts it up. Well, that’s actually flat over the last 24 hours. All right folks, that’s it for today. Hey, I hope you had a good day. Even better. Night. And we’ll see you back here again tomorrow after the close.