In today's episode, Tyler discusses the stock market's strong performance on this "turnaround Tuesday", and just what you want to see, semiconductors leading the way higher. While pullbacks and shakeouts are always painful, we continue to look at this as an opportunity to buy the dip. Tune into today's podcast to learn more!

Dont look back because the market is closed. Good Tuesday afternoon everyone. Tyler Herriage here with you for Todays VRA investing podcast. Hope you all had a great day out there today. If you were watching the markets, you know it was a much better day today than how we started the week yesterday. And that is called a turnaround Tuesday. And today was a good one from multiple point of views here. And one point that you really like to see to start it off is the semiconductors leading.

We’ll cover that here in our action in the market action today. Some really good action from our favorite sectors, favorite names, and of course our major indexes here as well. We’ll go through some of what Kip covered yesterday here as well. As far as what we’ve seen, you know, the shakeout obviously that we saw yesterday in the Nikkei in Japan and their big bounce back today as well. And just the overall state of panic that we’re currently seeing from investors right now. So let’s go ahead and jump right into this today here, because again, it was a good day to the upside. We finished off of the highs of the day today. We peaked just a couple hours, maybe an hour and a half before the close, still finishing higher across the board here and still managing to finish with the semiconductors leading on the day.

[00:01:37]:
But that leadership really began yesterday. As we’ve seen over the last couple of weeks, the semis have led to the downside. And we talk about it here often you don’t want to see the semis leading to the downside, but oftentimes you see the semis leading to the upside as well as the downside. So yesterday was a bit of a pattern change there where the semis didn’t finish as low as Tech did, as the rest of our markets did, and then today to rally up almost 2% at one point. Today, they were up as much as 4% on the day, but up 1.95%. Nasdaq was up 1%. So that’s pretty good. Close to two to one outperformance there.

And again, they did lead yesterday, even if they finished lower. So good to see that pattern change taking place here. We might be witnessing a bit of a FiFO situation. First in, first out. Now to clarify here as well, bottoms are always messy for the market, but we are seeing the signs of a turn here. Time will tell. But key point for us here is we’ve continued to use this as another opportunity to buy the dip here and to dollar cost average into our favorite positions. I’ll cover that here a little bit more in our market watch as well.

But as Kip covered yesterday in his podcast, which if you haven’t had a chance to listen to it yet, I highly recommend it. You know, pointing out that the trouble really did start in Japan with the unwind of the carry trade, as I’m sure you’ve likely heard a lot about already, but that caused the Nikkei to lead lower yesterday, closing down 10% well, overnight. That crash has been largely reversed as it finished up over 10% today. And as we wrote to our members this morning, is that, yes, these shakeouts hurt. They don’t feel good at all while you’re going through it, but it is still part of a normal, healthy bull market with the average year having a decline, seeing a decline of roughly 10% or more. These are not uncommon. While everyone seems a little bit different than the one before, it kind of makes you forget that, hey, these are great buying opportunities. Again, while they’re painful, it’s not the end of the world here.

[00:04:16]:
And again, we’ll use it as a buying opportunity. But a lot of people cited yesterday’s market action falling. Really started on Friday with the worse than expected jobs report. But there’s an important point of clarification here. Yes, the jobs report was less than ideal. And as I talked about on Friday, the downward revisions to previous reports is what really is eye catching. But none of these numbers are contractual, none of them are negative. Right? So for the fears about the economy here on such a high level, when we have positive jobs report numbers, right, we’re still creating jobs at the end of the day, gdp, while Q two gdp came in slightly lower than expected, it is still growth, right.

It’s not a negative, again, contraction of the economy here. So again, we aren’t seeing the real red flags, the recession fears that everyone’s talking about here. We see a near perfect setup for dollar cost averaging into our favorite positions. We’re big believers here in dollar cost averaging. Pick your favorite positions. We, our portfolio typically ranges from ten to 15 stocks, and we like to dollar cost average into those on a regular basis. And pullbacks like this provide a fantastic opportunity to do so. We’ve been talking about this here a lot in the last few podcasts, that this is not when you want to be a panic seller.

This is when you want to add to your positions and say to the market, hey, thank you for the discount. As we see it over the next really six to twelve months, we think you’re going to be very happy with your purchases. And it bears repeating here. Something else we’ve talked about a lot. We are in a seasonally weak period of the market that on the back end of this, we think we’re going to get another massive rally as we have not even completed year two of this bull market yet. Bull markets on average tend to run four to six years, and we expect this one has the room to run much higher than that. Our call remains for Dow Jones 100,000 by 2030, Nasdaq 40,000 by 2030 as well. So it’s going to be an exciting next five and a half years here, led by the innovation revolution.

[00:06:51]:
And what will put the roaring two thousand twenty s of the nineteen twenties, we think, to shame. All right, that being said, back to kind of the, when you don’t want to be a panic seller, check this out. What the so called smart money did yesterday. Institutions, we talk about this often, that institutions can vastly underperform the market. So calling them the smart money, you can’t see it. But I’m using air quotes here. JP Morgan says that just came out with this today, that institutions bought the dip, while real retail investors did sell aggressively as institutions on net bought $14 billion worth of stock, while retail has sold a net 1 billion here. So I know we got a lot of smart money listeners here at the VRA.

If you’ve been tuning in with us here, you know that we’ve been talking about buying the dip. So let us know. Is that what you’ve been doing so far? We’d love to hear back from you here. Your feedback is always so much appreciated. Thank you for everyone being here with us. We’ve got a fantastic audience here and we can’t thank you enough. We joy, we enjoy and love what we do here and being able to share it with you, it really is a bit of a dream come true because this is what we’d be doing this either way during the day. So thank you for being here with us.

But back to the markets again. I know that these shakeouts can be painful, especially when you see so much negativity in the mainstream media. Kind of going back to what I was saying here as well, that, yes, this most recent parts of the sell off began on Friday with the weak jobs report. But then over the weekend, we had the fears coming out of an attack from Iran. Then we had the japanese unwind of the carry trade as well as the raising rates. If we didn’t have the Iran attack in the japanese news, we think there’s a good chance that yesterday’s finished would have been much better, and today’s action could have been much better as well. So overall, we again continue to look at this as a buying opportunity and a time to kind of look past the negativity in the mainstream media. Don’t buy into it.

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You’ve seen how they just all piggyback on the same narratives over and over and over again and causes retail investors to panic. Right? We’ve seen it in the fear and greed index, which is now down still at a 21 today, hit a low of a 16 yesterday. And the put call ratio. Wow. Above a one all day today. Remember, anything above a 0.7 is seen as bearish leaning sentiment. Anything above a one is, excuse me, anything above a one is seen as excessive bearishness. Today we finished at a 1.12.

So again, back to the fact of the matter here. The economy remains strong. The jobs report was not negative. And then today, the Atlanta Fed just came out with their latest forecast for real GDP growth in Q three. Going into this report, blue chip consensus views. So, you know, institutions who publish research, their expectation is for a print below a two. The Atlanta Fed, on the other hand, just raised their estimate today from a 2.5% growth for Q three to 2.9% growth. So yes, you can hear a lot of negativity in the news.

This just tells us here once again, we think the economy does remain strong. And for all the reasons that kit mentioned yesterday, credit scores at all time highs. Home prices near or at record highs as well, with one third of Americans owning their home outright and a plethora of other reasons that he laid out yesterday. We’ve been talking about here for months now that most people just don’t know when we have conversations, whether it’s with clients, friends, family, almost nobody knows these things. Even people who I know who work in the financial industry are unaware of the strength of the us consumer right now. And yes, we talk about it here often. Inflation has really, really affected the second half of America, while you have the billionaires adding more and more to their wealth here. So yes, we do exist in a kind of two state America here.

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And unfortunately, the second America continues to be left behind. That’s what we’re here to fight against and to help you to fight against that as well. Protect your assets against inflation by owning real estate, by owning bitcoin, by owning gold and the best stocks as well. Because inflation means that these assets are going higher. It doesn’t always mean that the assets are actually that much higher, but your dollar buying power the purchasing power has become less. So. This is how we fight against inflation, by owning good assets and what we want to continue to do from here and to use pullbacks like this to buy at a discount. And again, you know, we’re big, we’re opportunity investors here.

We’re not day traders. So looking out over the medium to long term, we think you’re going to be very happy with your purchases here. All right. Next up here in regards to the Fed. Right. We’ve got a lot of fed speakers coming out over the next few weeks, very many of them. And then it ultimately culminates in Jay Powell’s Jackson Hole speech. We expect the rhetoric to come out of these speakers to be extremely dovish, not only talking about rate cuts, but also talking about putting a complete halt to quantitative tightening and announcing the restarting of quantitative easing here.

We fully expect that to be the case. Then as we go into Jay Powell’s speech, we also expect to hear dovish. Jay Powell, I talked about this on Friday as well. This will mark two years from Jay Powell’s infamous pain speech at Jackson Hole. Remember that speech where he said, you know, hey, we’re starting a rate hike cycle. This means that jobs are going to slow, the economy’s going to slow, and it’s going to be painful paraphrasing there, but it’s now known infamously as his pain speech. Now we expect a complete inverse of that in his next meeting here. Now, I don’t think that the Fed is going to rush to cut rates before the September meeting again.

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Yeah, the jobs report was weaker on Friday, but without Japan over the weekend and without the threats of Iran, we think yesterday’s action could have been very different. And remember, and just, just less than a week ago at Jay Powell’s Q and a session following the FOMC meeting, he said he sounded completely unconcerned, which we’ve heard from Jay Powell. And it’s been wrong. Right. We’ve seen policy error after policy error from this guy. But what he said last week is that the Fed has a, quote, a lot of room to respond, meaning they have a lot of ammo to cut rates right now. How, with how overly restrictive they are here. So they see a shock.

They see weakness in the economy. They have ammo here. He’s not wrong about that, even though they should have cut already, in our opinion, they are and remain overly restricted here. But the point is that that doesn’t seem like the comment from somebody who’s ready to be a reactionary. Right. That he’s. We already got the weak jobs number. If we were to get more data, he didn’t seem like he’s going to be rushing to cut rates right now.

So, you know, given that previous attitude, who knows? They could always surprise us. That’s not to say that they shouldn’t do it. Maybe they should. Right. But you also don’t want to run the risk of panicking the market. And I think that’s why he won’t, because it would be surprising. This isn’t something that Jay Powell usually does. I think the only time he’s done something like that was in 2020, cutting rates around Covid.

[00:15:26]:
Right. So that being said, again, we expect some very dovish rhetoric to be coming out of the Fed over the next, you know, six weeks or so leading up to the next Fed meeting. That said, let’s take a look at our market action here on the day to day. The inverse of yesterday finished higher across the board here. Good to see small caps actually leading today up 1.23% to 2064. Next up, the S and P 500, up 1.04% to 5240. And I want to pause here just quickly. While we didn’t hit our most extreme oversold designation on our VRA momentum oscillators, that’s rare in bull markets, by the way, but we call that extreme oversold on steroids.

We got basically to extreme oversold, not quite to the on steroids level, but outside of our momentum oscillators, we’re seeing more examples of extreme oversold readings. This is from bespoke earlier today as well, that the S and P has moved more than two standard deviations below its 50 day moving average. The last time we were at these levels was in the October timeframe of last year, which we saw a sell off into October. And October is typically a reversal month where you see the lows and begin to start heading higher. Well, even with this most recent pullback, the S and P has rallied over 28% since that time. At the highs of his over are right at 38% from the last time. We were two standard deviations away from the 50 day moving average. Again, another factor we’re looking at there for a potential buy the dip opportunity, which we’ve said time and time again.

After that we had the Nasdaq up 1.03% to 16,366. And I’ll point out the semis again led the way up 1.95%. And then we have the Dow Jones up three quarters of 1% to 38,997. And similar to how you want to see the semis leading tech. You’d love to see the transports leading the Dow as well. The transports were up just below one and a half percent today as well. So good action from our major indexes here. Next up, looking at our internals on the day today.

[00:18:02]:
We got a turnaround Tuesday here as well. As I mentioned, we did finish off the highs of the day, which we saw just an hour or two. I think it was about 2 hours before the close. And that’s also when the internals peaked. I’ll cover a little bit of that here. But overall, good numbers advancing stocks beating out declining stocks. Over three to one positive on the NYSE, just under two to one positive on the Nasdaq. 52 week highs.

Lows were our weak spot on the day. But after the selling that we’ve seen, that’s no surprise here. You know, we finish, or when you’re having lower closes like we saw in a big sell off like this, it shouldn’t be surprising that you’re getting more lows than new highs. So this is a bit of a lagging indicator here, one that we do want to see improve, though. But coming in negative on both the NYSE and the Nasdaq, but much better than yesterday. In fact, NYSE coming in almost exactly even off by about five issues. So not hugely, you know, bad numbers there. Lastly here, volume.

And this is where we saw the peak earlier in the session, 2 hours before the close, we had 83% upside volume on the NYSE. We still finished with roughly 75% upside volume. So over three to one positive there. So good readings. And we also finished positive on the Nasdaq, just shy of two to one positive there. So good day overall from the internals. Next up, looking at our sectors on the day today, excuse me, all eleven sectors finishing higher on the day today. Now, we didn’t have any 52 week highs or all time highs, but we do have a few sectors that are close, but still good to see.

[00:19:55]:
All eleven sectors finishing positive. Honestly surprising that Kip got yesterday’s podcast and I had today’s because as we joke about here, often, Kipp usually gets the big updates, the all time high kind of days, and I get the sell off days. Well, yesterday, all eleven sectors were negative. Today I got all eleven positives. So good day today. We were led by real estate, financials and communication services, our laggards, if you want to call them that, still finished positive. Energy, healthcare and consumer staples, those up about half a percent on the day today. And finally here for today, our VRA commodity watch.

Let me get a quick refresh of my screens here. Just give me 1 second. All right, here we go. A little bit of red on the screen. Gold down half a percent to $2,432 an ounce. But as we point out here often, we want to see the miners outpacing the precious metal. And today we got that GDX, the gold mining ETF, up 0.8% on the day to day. So good action there.

Silver also down on the day, less than half a percent at $27.09 an ounce. Copper now up a quarter of 1%, just barely above $4 a pound at exactly $4 a pound. Oil now flat on the day at $72.96 a barrel. And finally for today, bitcoin, which along with the market has been hit hard over the last week or so here now trying to rally back, get back some of those losses. Up 3.5% at 56,358 a bitcoin. Folks, that is all that we have time for here today. Please be sure to subscribe to receive our VRA podcast every day at the market close. You can sign up at vra letter.com.

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click the podcast link at the top. You’ll find our transcripts and everything we have to offer there as well. Well, so thanks again for tuning in. Until next time. We’ll see you back here tomorrow for the close.