In today's episode, Kip covers the market's strong finish to the week, once again, led by the semiconductors. He also zeros in on the anticipated trading of Bitcoin ETFs in Hong Kong, which could attract significant investor attention from mainland China. As we see it, the stage has been set for the next great economic boom.

Don’t look back because the market is closed. Good Friday afternoon, everyone. Kip Herriage here with the Daily VRA investing podcast. Hope you had a great day today. Hope your week is fantastic as well.

Let’s get right to it. Here’s some topics we covered today. First of all, good market today, good internals, everything you want to see.

Also, what we’ve just been through with this little pullback here is textbook pause. I want to explain why that is. It’s important to understand this because these pauses are exactly what every bull market has to have. It rings out the excesses. It makes people bulls that just turned bullish. Now flip back to bearish. Man, have we ever seen that? Right? We’re seeing the sentiment surveys and just, if you’re online like I am, you’re seeing it. Everybody is all, they’re all worried now.

Oh my God, here comes stagflation. Stagflation is stagflation. That’s what we’re worried about. No, look, we have inflation, we have higher rates, and the markets just haven’t cared. They haven’t cared since. Look, we were supposed to have our first rate cut last July for those that have a long enough memory. And guess what I mean, rate cut. And we haven’t.

[00:01:08]:
Right? But in the meantime, yes, we have hundreds since we’re supposed to have that rate cut is up 35%. So the markets clearly have figured this out as a discounting mechanism. And I’ll just tell you again a quick story about my recollection of 95 to 2000, because this is, that this is bigger. It’s similar to.com, but this is bigger than, the structural reasons for this bull market are far more convincing and compelling than the 95 to 2000 miltip was, because that was air. That was hopium. Put a.com in the company name and watch your stock go up. That was really it. Remember, nine out of ten of those companies were out of business within just a few years.

So that was air. But that laid the groundwork right. That was the foundational strength of what we’re seeing now over 20 years later. So it really is fascinating to think about this from a longer term point of view about how long this has been building, this boom time, this innovation revolution, or as so many Dan Ives and Brian Rich, two of our favorite market watchers are both calling us, the fourth industrial revolution. That just sounds cool, doesn’t it? I need to, I need to do more research on the first three, to say the truth. But this based in what’s happening with tech and AI and innovation and disruption. It really, the circle is now being completed. Remember that you started with.com and I think that’s the correct way to look at this.

[00:02:34]:
So again, I’ve already talked about it, don’t need to get into it again. But let’s, I want to talk a little bit about the Fed because the Fed’s goose in this market. I think we have evidence that Fed’s going to continue to goose the market into November. There’s your hint again. Good internals today. Good day today. Let’s start with the markets real quick. Dow Jones today finishing up four tenths 1%.

That was our loser on the day. Next up was the SPF 100 of just over 1%. Russell 2000 up just also up just over 1%. And then Nasdaq. Here comes the textbook analysis, right? Nasdaq up 2% of the day. A big 316 points and the semis up 2.5%. So there you go. This is that textbook setup where you have semis leading Nasdaq, Nasdaq leading the market for our newer folks here.

[00:03:29]:
And I don’t know, I should write a book that just says the semis lead. The semis are the tell that make it a one page book because it’s that simple of a concept. But it’s so important again because from the birth of quantitative easing here in the US in 2008, QE actually started in Japan in 2001. But here in the US after the financial crisis from the birth of QE, the single best market tell, there’s not a close second in my opinion are the semis. If they’re leading higher you must be long stocks. And folks just look at a relative screen chart which we share often with our members here. I don’t see many people talking about this. I don’t really understand that.

But that’s fine. But it is an open secret I guess you just take a look at a relative strength chart of the semis. The S and P 500, the largest and most important equity index in the world. Most important sector, most important equity index. Look at a relative chart of that from the birth of the bull market at the end of the bear market if you will. October 13, 2022. And you see the semis have done nothing but lead higher. But again there are nothing goes straight up.

[00:04:45]:
Trees don’t grow the sky. We shared this by the way, we just went aggressively along the semis this week and we were already long. So we now have a 150% long position in the VRA portfolio on a three time leveraged ETF. So that’s not aggressively long, right? This is like aggressively long on steroids, on steroids, on steroids. That’s how long we are the semis. And we’re not idiots. And we’re not just mad, crazy gunslingers. I am a gunslinger, by the way, and I’m proud of that.

But we did this because the VRA investing system sits at eleven and twelve screens. Bullish. It’s never been there before. So structurally speaking, this market and the economy are in very good shape. But again, the semis have been leaning higher. And now we had this pullback on the charts that we shared. Again, relevant strength chart. We had the semis pullback to what was our kind of our favorite buy signal pulled back to exactly that.

[00:05:43]:
One of the five most oversold levels. Matter of fact, it was the most oversold level that we’ve had since the birth of the bull market into the bear market in 2022. So we had that. Plus we had on a beer investing system just straight up char. The semis hit extreme oversell on steroids. It was a perfect, perfect setup for buy of the semis. And that’s why we went so aggressively long, because we believe they’re going to continue to lead. And we got more evidence of that, by the way, didn’t we? Yesterday we got the earnings, of course.

You know, again, medic kind of crapped the bed, right? Look, the stock was down. It opened down what? 18%, finished down 12%. What did Meda do today? Because I think they. Mark Zuckerberg actually wrote this up. Mark Zuckerberg just got his butt handed to him by Elon Musk. Again, if you read our work, I started saying on Tuesday that I believe that the earnings call that Elon Musk did was going to set the tone for every tech earnings call going forward. And then here comes Meta just having a horrible call, focusing on all the wrong things instead of focusing on the amount of money they’re spending on AI. Okay, they’re backing it up with hard money.

[00:07:02]:
They instead talk about their losses and their risk and their uncertainties, right? And Zuckerberg, the management team at Meta, I was not on that call, by the way, but I’ve heard enough about it. They just, it was a horrible, horrible call. So it was exactly the opposite of what Musk did with Tesla, talking about the future and the future is arriving and how excited they are again. Also they’re backing it up with the money they’re spending on AI and innovation disruption. And then yesterday after the close, here came Google, Microsoft, proving the point that I made after. Must call that, yeah, this is real. This is happening. It is the fourth industrial revolution, and it’s in the early innings, only Google was up.

Alphabet up 10%. Today, Microsoft up 2%, gave back a little of their gains. But the bigger picture point here is that, again, the future has arrived and that we’re off to the races here. I want to read. Well, let me just tell you the most important thing to give you an idea of the strength is you’ve probably already seen this. But for Google to grow revenues 15% and then grow net income by 57% than Microsoft to grow revenues by 17%, this is quarter per quarter, and then growing net income by 20%, these are massive numbers. Okay? And again, you’ve got a combination of the largest companies, the ten largest companies in the AI space have now invested, committed $100 billion in capex for AI infrastructure. So they’re putting their money where their mouth is.

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And this is the way the game works. This is why the markets and the economy always follow tech. When tech is red hot, guess what? The economy is red hot. It’s like Las Vegas. When Las Vegas. If you’ve been to Vegas, you know what I’m about to say. Red hot. I mean, it’s the hottest economy in the country.

When Vegas is hot, you don’t have a recession in the country. That’s the parallel. And when Silicon Valley and when the world of tech is spending this kind of money, guess what? Not only did not have a recession, you have boom time. And, folks, that is what we have here. We have an economic boom time that is just beginning. And so the evidence of that is really not a lot of people. For example, look at yesterday’s GDP report, right? Go. Oh, what are you talking about, kip? We had just had a big GDP mess, and inflation is still a problem.

I’m like, first of all, let me explain something to you. I have very little confidence in government data. I only watch government data just for trend analysis. That’s it. But not for monthly economic reports. And I can promise you this. Their GDP data is going to be revised, and it will be revised higher. But, for example, today we got the Atlanta Fed their first Q two GDP growth estimate.

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I want to get this right. I just tweeted this out. Make sure I get it right. I believe it was 3.9%, folks. Yeah. Atlanta Fed GDP. Now, very first estimate comes out. Q two, 3.9% growth estimate.

So they’re really the only ones that do this. Of the feds. I think others are starting to, but they’re really the most commonly quoted, and they’re pretty close, by the way, but it changes almost on a weekly basis. So just know that. But again, the economy is strong. The market’s telling us this as a discounting mechanism. The market is telling us what’s about to happen here. I’m gonna give you a few other things that from a route this morning, because, again, let me just say this.

This was a textbook pause. Textbook. And we, in three ways, this is what you need to know. Number one, investor sentiment. A month ago, investor sentiment was extreme greed, both in AI, all of the sentiment surveys, but the ones we talked about here, AI, investors intelligence, and then fear and greed index. Right. They all hit extreme greed just over a month ago. And then what happened this week, they all got to fear, borderline extreme fear for the first time in a year in the AAIII investor sentiment survey, there are more bears than bulls.

[00:11:36]:
Imagine that. More bears than bulls in a survey. From a six, 7% pause in the market. Now, Nasdaq was down 10%. There’s your correction. But does that make sense to you? No, it doesn’t make sense. And that tells you how early we are in this bull market. Again, understanding how sentiment works is a really powerful investment tool.

Here’s the deal. When we as this bull market begins to build a real head of steam, we start to see ipos come back. Mergers and acquisitions start to come back. Here’s what’s going to happen with investor sentiment. It’ll become more and more sticky. It gets to the point where we’ll have our shakeouts. But guess what? Investor sentiment will barely decline. I know this.

I’ve seen it happen enough, and that’s just not the case here. Here we had a couple of rough weeks, and boom, the bottom falls out of investor sentiment. Everybody flips. Everybody’s telling you it’s over. Here comes the next, here comes the crash. Just not the way the market works. Investor sentiment is a really powerful tool to follow for trend analysis, as I just described. Also, this textbook pause included the technicals.

[00:12:44]:
Again, we went from extreme overbought on our VRA momentum oscillators all the way to extreme oversold. But again, at the meantime, the moving averages stayed above the 50 day and the 100 day moving. They did threaten the 100 day, but we stayed above the 50 or the 100 day moving average, never coming near the 200 day moving average. But we got to extreme oversold on all the very momentum oscillators, money flow, relative strength, MACD and RSI. So every, we call that extreme oversold and steroids. Again, that set up a perfect buy signal. So you get sentiment. You got the technicals acting textbook, and then the third are the fundamentals.

And again, that’s what we’re seeing with these earnings, tech earnings, because tech drives everything. And now, again, you got, you get Tesla explaining what they’re about to do. We’ve talked about this a lot. And now you’ve got Google and Microsoft talking about, I mean, the quotes, this is a great quote from Google. This is directly from Google. This is just the first wave. It’s still early days of the most productivity enhancing technology advancement of our lifetime. Generative AI.

[00:14:05]:
Right? When they use phrases like that and that kind of a streak, you take them at their word because again, they’re investing. They’ve never invested more money in their own business than they are now. So again, we think we’ve got a great fundamental setup, technical setup, and now sentiment setup. Again, this market’s ready to go. I think we saw evidence of that today. And I think it’s only going to build from here. So let’s talk about, oh, I want to just spend a second on the Fed and then I’m going to tell you my top three investments. Okay, second on the Fed today, this was, this came out, I guess, from some Trump allies that said, I’m going to read this to you.

Exactly. Trump allies drop plans to blunt feds independence. Donald Trump’s allies are quietly drafting proposals that would attempt to erode the Federal Reserve’s independence if the former president wins a second term in the midst of a deepening divide among his advisors over how aggressively to challenge the central bank’s authority. So what do you think is going to happen? Do you think the Fed is above goosing the markets to make sure their team wins, team Biden wins, which is team uniparty. Team Federal Reserve, again, team state. If you think the Fed is above that, let me just remind you of what happened in 2018. Trump gets elected in 2016, right? GDP soars immediately. Stock market soars immediately.

[00:15:37]:
Everything’s going great until Trump starts talking shit about Jay Powell and the Fed wasn’t sure he’s going to keep them on, doesn’t like the job he’s doing. It was almost a daily thing. And everybody that had a bit of common sense is like, man, what are you doing? Things are going well. Why are you rocking the boat? Go deal with other problems. Put Hillary in prison like you promised us, but stop talking shit about the Fed and public. It ain’t going to end well for you. What happened? The Fed raised rates eight straight times into the midterm elections. Why did we only win a few seats? We being common sense republic.

I’m actually a lifelong independent, but why did the right only get win a few seats more? Supposed to be a red wave because the Fed scared so many people about the economy. The market tanked. A lot of the air went out of the balloon. The excitement left the room. So is the Fed above it? No. And again, we’ve now had undercover video footage. You’ve probably seen this with a guy that works, an economist at the Fed, who’s saying, oh, yeah, Jay Powell. Trump hates Jay Powell.

[00:16:47]:
And trust mote, the feeling is mutual. If we can do something to blunt Trump’s ability to win reelection, we’re going to do it. Meaning the Federal Reserve. So again, it’s not directly from Jay Powell’s mouth, but this is an economist that works at the Fed. So my point being, if you think the Fed is above goosing the stock market and the economy into November, then I think you’re a more trusting person than I am, and I’ll leave it at that. All right. Or I could say look up the word naive in the dictionary and you’re going to see a picture yourself. So I think it’s just another feather in our cap to think that we’re going to get a really strong market in November.

And I think, I think it’s, I don’t think it’s complicated. I think it, I really do think it is just that simple. But when you combine that with the strength of this innovation revolution in the fourth industrial revolution, and what’s happening is tech earnings. Again, folks, we’ve got to, we’ve got a very, very interesting market here that continues to say the smartest of smart money strategies is to buy the dip. All right, I’m going to tell you, I got an email today from a long term VRA member, great guy, and he said, kip, look, I really don’t want to buy all the positions you’re recommending. Could you just tell me what your top three or four are? And we get that a lot. I really don’t like answering that question because I think the best, we never recommend more than about 15 stocks at a time here. Okay? And I think the average person should buy all 15 stocks, get fully diversified, equal, equal weighted to all our positions.

[00:18:25]:
And that’s, that’s not too much, right? That’s not too much. That’s not over diversification. I think it’s a good number, but not everybody wants to do that. I understand that. Who doesn’t want to own only the two or three best stocks we recommend? I get it. So here’s the point. So I replied back to him and I said, look, it’s not individual investor advice. I can’t do that.

But I will tell you what, my top three, I think I’ve just added the innovation revolution out of this fourth industrial revolution. My favorite three stocks tied to technology. Here they are. First, it’s got to be in no order, okay? No order. It’s semis again, there’s no secret. Semis lead everything. They’re red hot. They’re going to continue to be red hot.

Everything’s happening through the semis and chip companies. Okay? Those semi semiconductors, we use a leveraged ETF for that. Right? That’s number one. Again, no order. Second, bitcoin. It’s financial engineering. It’s a financial engineering marvel. It’s absolutely part of the innovation revolution.

[00:19:24]:
It probably is first on the list, frankly. So bitcoins, the second or the ETF that we recommend, which is Kathy woods arcsa etf arkb is a symbol. Third, Tesla. Those are my top three. Those are my top three. So there. You have actually never done that before. But that’s it.

That’s it. Semis, bitcoin, and Tesla, everybody. If you’ve been listening to a podcast, you know, we’ve been Tesla fans for a long time. I won’t get through all that again, but those are my favorite three. All right, with that said, let’s get to it now. Let’s talk about the internals again. As I said earlier, it’s good day all around today, by the way, remember, the internals were good. Even during this, this.

This shakeout, we’d have some. We had some ugly days. Like, remember one day late last week? This is my. Excuse me. Nasdaq was down 2% on the day, but Nasdaq volume was higher. Nasdaq convenience decline was only slightly negative. That was a tell. That’s what we said at the time.

[00:20:22]:
I think that was right. Proved to be the right call. So the Eternals actually have held up again. That’s a great sign in a bull market. If they hadn’t, then you’d be questioning the strength of the bull market, the structural integrity of the market. But it did hold up. So the internal, say again, we’re good. I’ll round up for simplicity.

Two to one positive for advanced decline. Both NYC and Nasdaq. Volume. This is simple day, really. Volume, 66% positive. Volume NYC, 65% positive Nasdaq, solid readings. And then the new 50, highs to lows, 137 to 114. So wins across the board.

[00:20:59]:
What you’d expect on a strong day like this. In our sector watch today, more of a mixed bag here. Six sectors higher, five minutes lower. Communication services up 4.7% today. Technology up 1.9% today. Consumer discretion up 1.3. These are all the sectors you want to see rocking higher in a structural bull market like we have here. To the downside, utilities down 1%.

Energy down 1%. Energy’s been red hot. And our commodity watch today, we had gold today, by the way, gold, you know, gold hit extreme roll bottle on steroids, as did the miners. We told you that a week, just over a week ago. That’s now gone. I wrote this up for our parabolic options members today, both gold and the miners, talking about GDX, the gold miner, ETF, both gold and the miners. This is textbooks as well. We use, this is great for tracking pullbacks in a parabolic market.

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In a big time bull market, when you get a shakeout and something pulls back to the 21 day EMA, the exponential moving average is what we track. We use the eight and the 21 day emas for moving averages there, the first two, and then 5100, 200 day. But when you have like, gold and GDX both pull back textbook to the 21 EMA and then reverse higher from there. That’s a classic buy signal. It’s one of our favorite setups in a red hot market, and it’s exactly what’s happened. At the same time, the overbought conditions, we had, extreme overbought dissipated. Now, they’re not oversold or anything like that, but we don’t care about that. This is not, this is the bull market of bull markets, precious metals and miners.

We’re going to be taking action again in this group or very long in this group. But in our options program, we’re taking action Monday or Tuesday for GDX. We pretty much crushed it last month. They’re really good returns. And I love this group goal today of $6 an ounce at 23 49 an ounce. By the way, GDX just had to a double golden cross within a week of each other. You know, some people will tell you golden crosses don’t matter. I think they really matter.

[00:23:09]:
I’ve used them to make a lot of money. It depends on the specific asset you’re talking about. But for equities in a bull market, yeah, it’s a good buy signal. GDX again, I said back to back, back to back golden crosses within about a week of each other. Today a silver today down fourteen cents and now it’s at 27 21. Copper just continues to rip higher. Doctor, copper is telling you the global economy is in good shape. Chinese markets are really doing well.

European markets really doing well. Again, this is all confirmation that we have a global boom taking place. And we do. We do. We have a global economic boom taking place. And if you, I really want to tell you the name of this person because you know him, but I’m not going to do that. It would be fair to him. We text all day long.

He is the most negative person in my life and I tend not to have a lot of negative. I’m a optimist. Okay. I think life’s a lot more fun in your optimist. I’ve said it before, there’s never been a better time to be an optimist than right now. Well, I can’t convince him. He can’t turn me into pessimist. I apparently can’t turn into an optimist.

[00:24:17]:
So I’ve given up. But we’re still great friends. Okay. But I was like, look, you can quote me all the polls you want and all the people that you talk to that say life sucks, they can’t make money, they’re going broke. You can do all you want to. You can show me the survey that showed only 8% of Americans believe that the economy is in good shape. That’s a record low. As a contrarian, I was like, you have to understand, I’m the ultimate contrarian.

You have to understand when you tell me nobody’s bullish, nobody thinks the economy is doing well and everybody thinks that we’re going to have a crash. You have to know what I hear as a contrarian. I hear bye bye bye. I hear that things are fantastic again. Because as a true contrarian, that is what you have to say. And that is how I feel. But I think what’s happened is we have a written to talk about this for a very long time. We have a side up with negativity in place.

[00:25:16]:
It’s not an accident. This is planned. I think I know why. I think they don’t want this economy taken off yet. Because again, they don’t have to raise rates. They want people thinking things are terrible. They don’t want animal spirits coming back because then it could bring other questions for the Fed. Will they have to raise rates in election year? They don’t want to do that.

But there’s been a sop and negativity in place for a long time. All these perma bears, high profile people get on social media. You know, I’m talking about everywhere. It’s just. But it’s a terrible way to invest. Again, you don’t, if you’re the majority and you feel confident about your position, you’re going to get hurt, right? Because Mister Market has one primary goal, to destroy as many investors as possible. That’s why being a contrarian is a fantastic way to invest, in my opinion. And I think again, doctor copper is telling us this, right? Just another, another thing that’s telling us what’s really happening beneath the surface.

Copper up another five cents a pound today at 456 a pound, another two year high. Crude oil today up ten cents a barrel, 83.66. And finally, bitcoin, right now trading at 63,904. Got confirmation yesterday from the Hong Kong securities regulators that beginning on April 30, that’s just a few days from now, bitcoin, these ETF’s will be traded in Hong Kong. This is big. 10% of the world’s. 10% of the world’s wealth is set to reside in Hong Kong. Course, a lot of that is mainland China money.

[00:26:44]:
The question is, will mainland Chinese be able to buy these bitcoin ETF’s? Because China’s got a no bitcoin policy. First of all, they’re not buying bitcoin, they’re buying an ETF. That’s number one. And number two, if you’re telling me that the wealthiest chinese, mainland chinese people don’t have vehicles where they can invest in Hong Kong, where chinese regulators don’t know what they’re doing, I would say you’re a little naive, right? One thing I know about the Chinese is they are smart, man. They know how to. They figure everything out. And when they figure it out, they tell each other, right. A very tight network here.

So do I think that mainland chinese folks are going to be able to buy these bitcoin ETF’s? You bet your ass I do. I absolutely do. So we’ll see, you know. We’ll see. I think a lot of demand is going to come here right now. The futures traders are dominating this action. And I think they’ve been leaning on it post the having. I think they saw it as a slam dunk by the rumor, sell the news.

But I think they also know that’s a trade. They’re in this for a trade only. And I think if they get on the wrong side and demand starts flying into bitcoin again, these ETF’s saw a ton of action early on. And then again, people ran out of money. Bitcoin dropped from 74 to 60. Right. And so some of these, some of the. Again, some of the excitement left the room.

[00:28:04]:
But if all these future traders get on the wrong side, here comes demand. There’s so many other places it’s going to come from. We’ve talked about this ad nauseam. Okay. You know we love bitcoin against one of our favorite investments. So it’s six just under 64,000. Do I think the Hong Kong approvals are going to help? Absolutely. But it just doesn’t matter.

The demands coming from everywhere. Approvals still have to come. Europeans can’t buy bitcoin. Dtfs still not approved. Right. Some countries are trying to prove it, but only for certain investors. Right. Only the wealthiest.

Right. How nauseating is that? Same thing. All of Asia, a lot of Asians. Most Asians can’t buy bitcoin. ETF’s 80% approximately of a us investment firms do not allow the purchase. Fan card is the biggest of the big. Don’t allow the purchase of bitcoin ETF’s. But all that’s changing these compliance approvals and the legal process.

[00:28:57]:
In other words, covering their butts. That’s all underway. And again, the demand is just going to continue to soaring and repeat. I believe bitcoin is going to 100,000 this year. Still think there’s a decent chance it happens within 100 days of the having. It means it’s going to happen fairly fast. If that happens, my target becomes 200 5250 thousand by the end of this year. Either way, it’s going to 100 this year, I believe.

And probably even higher after that. Of course. Much higher. I’ve said it before, I’ll say it again. When bitcoin is a million dollars, we’ll still be buying it, still be recommending it, because that’s where it’s headed. All right, folks. Hey, always appreciate you listening. Hope you had a great week and even better weekend.

We’ll see you back here again Monday after the close.