Tune into today's podcast as Kip dives into the latest market developments, shining a spotlight on the significant shifts in bitcoin and small caps that are driving the current market action. Kip shares insights on the bullish signs in the market, the improving market breadth and the ever-expanding opportunities in the roaring 2020s.

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Kip Herriage here with the daily VRA Investing podcast. Hope you had a good day today. Lot to talk about here, but really some primary topics that we really want to hit on today because it’s driving all the action right now. And that is bitcoin, that is small caps. What’s taking place there, we think is a major move developing here. We’re starting to see a major turn here.

The action of the small caps, I think, surprised a lot of people. We’ll talk about that a little bit, because, again, this market is broadening. We see clear signs it can’t be contested. You can no longer say this is a thin market. We’ll talk about that a little bit. This is very bullish news, by the way, and really good internals. Today, again, market broadening. It’s what you expect to see.

It’s happening. Rich Ross, the technical rain man, the quant, if you will, over at Evercore, raises his bullish targets both for this year and next year for the s 500 and for some of our favorite areas, semis, techs, Tesla and bitcoin as well. Again, when some of the best in the business. Rich Ross is one of the best in the business. He’s been right as rain. And we see things the same way when we’re lined up together with Rich Ross. We feel pretty good about our researching, and he remains incredibly bullish. And, folks, the biggie, this is a structural, we talk about it so often, don’t we? This is a structural bull market of size and scope.

[00:01:39]:
We’ve been talking about this now for over a year and a half. From the time we put up the big bribe we called the bottom of the bear market on October 13, 2022, which we called to the day. And we’ve been aggressively long since then. It’s been the right play, and it will continue to be the right play because, again, as a structural bull market, I’ll talk a little bit about what that means, because this is not being driven by phony baloney tech gains. This isn’t being driven by greed. Greed, greed. This isn’t being driven by Wall street, hedge funds and the big guys driving stocks higher, folks. This is being driven by a fundamentally, structurally not just sound, remarkably sound us economy, remarkably strong us consumer.

[00:02:26]:
Matter of fact, that’s the better story. And the stock market that is being forced higher, forced higher. Its earnings are forced higher. This is a beautiful set up for a continued move higher. And we’ll talk about all this. Let’s get into it. First of all, the markets today, again, we reach these extreme overbought levels like we did last week. We have a couple days where we might go down a little bit or maybe go sideways.

Remember, there was a lot of trepidation about the Nvidia earnings, and of course, we came out of that rip roaring higher. But these short term pauses, these short term shakeouts, they really help our markets because we go from extreme overbought. Once you have a pause for two or three days, then all of a sudden those overall conditions are gone, and now this market can resume its way higher. Rubber band gets stretched too tight, you’re going to have a reaction to that. This is a healthy textbook action in a bull market. So again, Dow Jones today did finish slower, but off the lows, we were down by as much as 175 points. Finishing down just 96 points of the day. Was only loser on the day down a quarter of a percent.

[00:03:35]:
Our biggest winner today. Again, small cats. Rust 2000 up 1.4%. It led yesterday, led again today. That’s four straight days. Four straight days for iwm being higher. That has not happened this year. Let me make a note of that because I want to write that up in tomorrow’s letter.

Yeah, so that’s good. That’s good to see. A lot of people thought that they give it back. The futures were higher. Right. Starting it. When I got up early this morning at about 2230, hard to sleep with bitcoin folks. I got to tell you, it makes it very hard to sleep with this 24 hours trading, especially when it’s surging like it is.

[00:04:11]:
I think a lot of you know what I’m talking about. But from the very second that futures open trading, futures were higher for small caps. And so we ran out of the gate. We were strong. Even the market got hit. Small caps held their ground, stayed up at least 1% all day. Again finishing up on the day 1.3% at the highs today. Really good smart money hour again today.

We’re getting these about 9% of the time now. Again, it’s another big bullish bragging point. A strong smart money hour. The open is for amateurs. The closes are for professionals. This is the way I’ve always been taught to look at it. I think it’s very true. The pros sell the open and the pros buy the close.

That has been a winning strategy for a long time. We saw it again today. Again, rust 2000, our winner on the day, up 1.3%. Also, Nasdaq. Nasdaq got hit midday boom, like a freight train comes roaring back. Nasdaq finishing up four tenths to 1% as well. The only negative today, really, besides the small losses in Dow Jones, were the semiconductors, which finished down four tenths 1%. Look, obviously they’ve been a house of fire.

[00:05:23]:
Semis have led from the exact bear market bottom in October of 2022. They are the tell. There is no more important tell than the semis. So we don’t want to see more than a day or two of weakness. Then we start, especially compared to the broad market. Then we thought maybe leadership is changing and that might impact us a little bit. But folks, right now we’re at, on a VR investing system, we’re at ten out of twelve screens bullish. The highest it’s ever been has been eleven of twelve.

So we’re right there. And that means we’ve got many months ahead of us of a bull market, just based on the structure of the yard investing system, unless something shocks us out of the blue. Also some really good data, some good analytics. Tyler covered this yesterday. I’m going to mention it again here today because it’s so important. We are now one day away. Tomorrow’s the last day of February. Of course, we’re now one day away.

[00:06:18]:
Wait a minute, we have one more day in February. My bad. What is going on here with my calendar? Regardless, we’re almost at the end of February. This has been, again another great month, folks. What this is going to mean is we’re going to have four straight months of gains in the s and P 500. This is November, December, January, February. Incredibly bullish. And the analytics are spectacularly bullish when this happens.

It’s happened 14 times since 1950. In these 14 times over the next year, the market’s been higher every single time, 14 out of 1400 percent of the time, with average gains of 17.4%. So the analytics have been solid now for the entirety, really, of this bull market, but they’ve really been good over the last five quarters and markets have done essentially what they’re supposed to do, except, by the way, for this month, February was not supposed to be a great month, and of course it’s been another great one now. But again, the analytics point to further gains. It just reinforces our bullish position on this market, and when that changes, we’ll let you know and we’ll obviously be taking profits and making some bearish bets at that point. But again, that’s a story for a long ways out. We’re in the roaring two thousand and twenty s this bull market really still is in its infancy. Remember, just second year of a bull market, so many people getting panicky, so many people calling a top.

[00:07:48]:
Never in my career have I seen more people calling a top. Just when you get to all time highs, that’s not the way this works. We’re going to have 20 or 30 all time highs just this year in the markets. And again, there’ll be a lot more next year. So bull markets last a long time. This one is just getting started. Anybody that’s calling a top here now, there’s a difference between calling a top, between saying they expect some profit taking or they think we can have a shakeout, but there are still people saying that the top is in and we’re right near it, and I just don’t know what they’re looking at. But that’s not the way the markets work.

Again, new bull market. By the second year, bull market has been higher. Every year. Again, more powerful analytics. So here we go. Let’s keep this party going. We fully expect that to be the case, but bitcoin is a story. Bitcoin and small caps.

[00:08:42]:
By the way, a lot of fund flows coming into small caps. Tyler covered that yesterday. Got to remember small caps, which now, by the way, are just IWM is one point away from hitting a 52 week high. Small caps are on the verge of breaking out, but at the same time, they’re still 16% to 17% below all time highs. So again, we’ve had all time highs in Dow Jones, all time highs in SP 100, all time highs in Nasdaq 100. We’ve not yet had all time highs. In the Russell 2000, we’ll get there, but that means the market is giving us a gift. We said this a long time ago, didn’t we? The markets, if you’ve yet to get all time highs in a new bull market, the market’s giving you a gift because you’re going to get there again, all things being equal.

And that means we’ve got 16% to go from here in the Rust 2000 to get to all time highs. That’s why it continues to be a very set bet. I think it’s actually the best play on the board now. And we are aggressively long small caps again, their leadership today was stellar, and we think it will continue. Bitcoin, let’s talk about this now because again, another all time high. Excuse me, another new 52 week high today, 57,300 in that range. Right now, we’re just a bit below 57,000. But these fund flows that are coming in from these etfs that the SEC approved.

[00:10:05]:
I mean, these are stunning numbers. The SEC approved nine bitcoin etfs so far they have purchased. This does include today, by the way. We’ll have those numbers out here in a little bit. So far, these etfs have bought 294,000 bitcoin. 294. That’s in 31 days, folks. That’s $16 billion in purchases from these etfs.

So when we talk about this being the best supply demand story on the planet, which we’ve labeled bitcoin as for a very long time, which is why we’ve been so incredibly bullish on bitcoin for such a long time. When we call it the best supply demand story on the planet, it’s a scarcity value. Again, it really is a very simple story to understand now that it’s approved by the SEC. Now it’s been giving legitimacy. We know the facts, right? They’re never going to print more than 21 million bitcoin every four years. They do a having. We’ve got one coming up here in April. It’s now less than 50 days away.

[00:11:06]:
And the average moves coming out of these havings has just been extraordinary. Again, we’ve talked about this often here, but the numbers tend to all get blended in together. So let’s focus on this for a second. After the 2012 bitcoin having bitcoin went up 7900%, you’d made 79 times your money in a year. And the second bitcoin having in 2016, you would have made 29 times your money in 18 months. In the last having, it’s only been three. This will be the fourth. In the last having in 2020, you would have made seven times your money in 18 months.

So it’s interesting because as a lot of people have noted, this is kind of the time frame where bitcoin has been weak going in the month or so, month or two leading up to the having, bitcoin has typically been weak. What’s the difference now? Sec approval and ETF purchasing. That’s the difference. And now the Hodlers have no interest in selling whatsoever. Matter of fact, we just keep buying. We just keep buying because we know that 80% of people that own bitcoin, my hands in the air, 80% of the people that own bitcoin have no interest in selling it. And so that means very little supply is left for this massive demand that’s coming in. So when I say things like I think bitcoin is going to hit, I think it’s likely that bitcoin will break the 100,000 by the having.

[00:12:34]:
That’s not hyperbole. That’s not an exaggeration. That is actually what I believe is going to happen, folks. This move could be stunningly parabolic. It has clearly gone parabolic. Now, I will note bitcoin has hit our most overbought designation in the VR investing system. Call it extreme overbought on steroids, bitcoin is there. The question is, will it matter? Question is, will it matter? It usually does.

Because whenever in the past I’ve said it doesn’t matter, it’s going higher regardless of a hot stock or whatever, I always get slapped in the face by my own investing system. That reminds me what an idiot I am for forgetting the system that I built. So I just want to put that out there. As bullish as we are on bitcoin, it is, extreme overbought. Wouldn’t surprise me to have a shakeout. We just had one, didn’t we? We just had a shakeout. Bitcoin dropped back to 50,000, and that was just a few days ago. Now it’s at 57,000.

[00:13:32]:
So I’m not saying it’s going to last a long time, but I wouldn’t be surprised to have another shakeout. But again, the demand is so high. You can see I’m confused here. I’m perplexed, I’m befuddled. I don’t know what’s going to happen in the very short term, but I have a pretty good idea what’s going to happen longer term. And yes, at some point, bitcoin will hit $1 million. I just can’t tell you when, but I kind of think it’s going to be a lot sooner than most people think. This is an extraordinary story that everyone should know, as we’ve said here for so long, you don’t have to put your life savings in it.

You don’t have to sell all your gold and buy bitcoin with it. No one’s saying that. Put $1,000 into bitcoin. Buy one of these new etfs and you don’t feel comfortable. Open a wallet account and buying, if you will, quote unquote physical bitcoin. Just buy one of these etfs. We recommend Arkb Kathy Wood’s arc ETF, one of the nine approved again symbols. Arkb we recommend that one because we’re big fans of Kathy Wood and what they’re doing over at Arc, but by anyone you want, we don’t make a penny from it.

[00:14:39]:
I’m just saying, buy $5 worth buy $100, buy a thousand, whatever you want to put in, because when your wallet’s in it, your heart’s in it, you buy a little bit of something that makes you more curious. I know our group is very smart here, but this is just the message. We tell everybody here that from our tv, radio appearances, of course, our VRA letter, our weekly blog, just encourage people to buy a little bit. You’ll start learning more, you’ll become more comfortable. You’ll start increasing the size of your position. I think it’s really smart that people do that because bitcoin is real and it is going a hell of a lot higher. I just mentioned this because investor sentiment is so important. When the market bottomed in October of 22, I started running Twitter polls, which I like to do.

And I wasn’t surprised when 90% of the people said the market is going to go lower because everybody was calling for a crash then. Right? It had been a brutal time. We had three markets in five years been brutal. Everyone said, market’s going lower. We called a capitulation. We called the bottom. We disagree with everybody. But 90% of people in our polls, time after time, said, no, market’s going lower.

[00:15:50]:
Even a year later, when the market has zoomed higher, the majority of people in my Twitter polls, like 60%, 70% of people still saying, no, we’re going lower. So again, investor sentiment, it’s a powerful thing. It’s a powerful market timing for us. So I say all that because of this. I just ran a Twitter poll, Twitter. 71% of respondents, 71% said they do not own bitcoin. And I know from talking to a lot of these people, they have no interest in, I know from my Twitter account, I know from multiple polls and from seeing a lot of feedback in the community, a lot of sentiment on this, that there are just a lot of people that will never buy bitcoin. They think it’s a scam.

It’s going to get hacked. Maybe they’re right. Maybe that’s all going to happen. But in the meantime, folks, bitcoin is up 140% in the last year. So again, there’s a way to alleviate risk by diversification. Number one, also, you can put stops in. If it starts to fall, you can sell. It’s got liquidity, 24 hours liquidity.

[00:16:58]:
So you’re not limited to what your options are. The point being, though, even with this massive move higher, the fact that so many people still want nothing to do with bitcoin, believe that they don’t own it. They don’t want to own it. That to me says probably more than anything else, the investor sentiment continues to be lukewarm at best. So it’ll probably take a move through 100,000 on bitcoin before investors really start changing their mind. That’s my best guess. And again, that’ll be a sell signal, of course, for the rest of us, or at least a time to take some profits or maybe buy some puts, the hedge, et cetera. But that’s the way investors doing it works, and I think it’s really going to be a great guide for us in owning and participating in this bitcoin phenomenon is what the majority of the public does when they fall in love with it.

We will not want to own it, at least for a while. But again, as I said at the beginning of the podcast, this market is going to keep going higher for a lot of reasons. But the biggest reason of all is, yeah, we are in the roaring 2020s. It’s a magical time to be an investor. We said this for a long time. Think about all the cool things happening now. Innovation, revolution, we’ve got bitcoin. These are all separate topics, by the way, bitcoin, cryptos, different topics, subset of right, blockchain, different topic.

[00:18:25]:
Tokenization is taking place. Different topic, folks. It’s not going to be long before anything and everything that you care about buying, including a home, real estate, you name it, stocks, it’s all going to be on the blockchain. Everything’s going to be on the blockchain. Everything will be tradable 24/7 liquidity will be instant. The days of having to go through all the trouble we have to go to to buy a home, to buy real estate, those days will be gone now. Soon, I should say, we’ll have the ability to buy fractional interest in all of these things, just like we buy fractional interest right now in companies, right through shares. Well, through the blockchain and through cryptocurrencies, we’ll be able to have fractional ownership of essentially any asset that wants to put itself up for at least a portion of its total value to have it fractionalized or tokenized.

And so again, this is an incredible time to be alive, because the future is starting to get closer, isn’t it? The future is starting to come into our frame of view. We start to get a little sneak peek in what it’s going to look like, and it’s pretty exciting. In the meantime, as I said earlier, structural bull, market size and scope. I just got to repeat it for our new folks, all time highs in stocks, all time highs. Home prices, all time highs. Net equity in homes, all time highest consumer net worth. One third of homeowners have no mortgage on their home. These are all records we learned today.

[00:19:57]:
Home prices hit another all time high for the 11th straight month. This is only going to pick up speed. Talk about a structural bull market size and scope. That’s the housing market, right? Not enough supply, too much demand. Rates are going to start coming lower. Although, does it look like the economy needs lower rates? It kind of doesn’t, does it? Remember, during the 95 to 2000 dot melt up, the average ten year yield was better than 5%. We spent a lot of time over 6%. And tech stocks and the rest of the market melted up.

Primarily tech stocks melted up. So again, you got to be careful. You listen to these fear mongers that say that we’re going to have a crash because of this, that government debt rates are too high, inflation is too high. Ask to see their investment results before you listen to them instead of just trying to scare you out of your positions. Right. And then again, another big part of this structural bull market is what’s happening in the economy and consumers. Again, consumers have rarely have ever been in better financial situation condition than they are now. Over the last 50 years, consumers and american companies have cut their debt by 25% to disposable income and market cap and corporate debt to market cap since the 50 year low.

[00:21:13]:
So the ability to lever up is significant. These are the things we see at the beginning of economic expansions, not the end, but at the beginning of it’s really key points to understand this. So with the innovation revolution just in the early innings, maybe inning one, even when we look back on this, we continue here at the VRA, continue to see us as the single best opportunity for significant wealth creation since the 95 to 2000 melt up. Stay locked in, stay focused, keep buying dips. Pay attention to what the market is telling you it wants to do because the market speaks to us loudly. It does it weekly, daily, monthly. Just pay attention to it. It does that a lot by the internals, which we’re going to cover here in just a moment.

What else today? If I could read my handwriting. All right, let’s get to the internals today. Again, I mentioned this at the top of the podcast here. Dow Jones will important is down 175 points. And I pull the internals up and I’m like, what? These are so strong. And they finished strong as well. NYSE up volume 72%. Nasdaq up volume 74% so very good readings here.

[00:22:27]:
Okay. Typically we see these kind of readings on the markets of a lot more than this. This is a market that’s broadening is exactly what we want to see. We also saw with the internals in the advanced decline, advanced decline. Today, NYSE was positive by only about 400 issues, but was positive again. Dow don’t down today. Nasdaq had a positive advanced decline of two to one. And here’s another, Vicky, by the way, new 52 kaise lows.

You remember how long a stretch we went through where we had more 52 week lows than highs, but somehow the market kept going up. That was a tell, right? Well, here’s a more important tell or not more important tell, but also equally important tell. Today we had 428 stocks hit a new 52 week high. Just 81 hit a new 52 week low. These numbers are starting to grow. I believe that within a week or two, we see this move higher, continuing. Again, not that we’ll have shakeouts, short term positives overall, that kind of thing. Remember which I’m a little longer term here.

[00:23:33]:
I believe we’re going to get back to some heady days of seeing more than 1000 stocks hit new 52 week highs. And I think that’s closer than people really realize. And again, this market is clearly broadening out. That’s a very important point, primarily because it just hadn’t for so long. And now that it is another important point, look what’s happening to a lot of these magnificent seven stocks. Again, Tyler’s been talking about this. You got stocks that are down, not just a little, but a lot. Apple, which is the general, at least it used to be.

The general probably still is. The high was 199. It’s 182. It’s below the 50 day moving average. Google has been getting slaughtered because of this ridiculous AI chat program they have called Gemini. They deserve to be slaughtered. They deserve to have every investor sell their stock that owns it for this racist, what do you call an AI chat bot that is completely malfunctioned? It’s broken. A little concerning about our future with robots, is it not? Wow.

[00:24:42]:
I’m sure you’ve read the stories that have been going public here because Google unleashed something on the public that was not ready to be unleashed. Horrible search results. Just completely racist. Bad info. It’s basically lying to the public. How was that even possible? It was programmed incorrectly. Programmed wrongly on purpose. Right.

It’s not a flaw, it’s a feature. That’s what Google is all about here. And it’s good to see their stock another magnificent seven stock getting hit hard. High is 153. It’s down to 138. So again, Tesla. Tesla is one of my favorite stocks. Most of you probably know this for a long, long time.

[00:25:29]:
Tesla is down big time. It’s a magnificent 7th stock. The market keeps going up. So again, the market’s broadening. We see it in small caps. We see it in mid caps. Again, I’m stressing this because I want to make sure people understand this is extraordinarily bullish what’s happening here. This is extraordinarily bullish.

This means the market is going to go a whole lot higher if this action continues, which we expect that it will in our sector. Watch today. Pretty good day here. Could have been better, but pretty good day. Eight sectors finished higher, three finished lower. Actually, very good day. The ones that finished lower, barely lower to the upside here we had utilities up. Interesting with the yields up again today.

[00:26:10]:
Ten year at 4.31%. Utilities today up 1.9%. Communication services up 1%. Materials up 410% to 1%. Outside of that, not a lot going on. Kind of a quiet day, kind of like yesterday was better action today than yesterday, but still kind of quiet. Not a lot happening our sectors. But again, good to see eight of eleven sectors finished higher on the day.

And our commodity watch. Talk about quiet. Again, all the action is bitcoin. Gold has been trading better than probably most people think. Gold is $130 away from an all time high, but it’s been forgotten next to bitcoin, there’s just no question about it. For short term purposes. No doubt about it. Gold, $2,039 an ounce, up a half percent on the day.

[00:27:00]:
So silver down six pennies a day at 22 66 an ounce. Copper today up one penny a pound at 385 a pound. Crude oil up barrel at 78 53. Fantastic, both fundamentals and technicals for this group. We love energy stocks here. And with demand coming back from China, that means oil demand is going to come back, too. So don’t be surprised, folks, when the oil is knocking on $100 a barrel again by the end of this year.

And these energy stocks are really going to rip, roar higher. Finally on today, bitcoin. Let’s get a fresh quote here. Last trade, 56,700, up 11% in the last 24 hours. Again, we think the move continues. All right, folks, I always appreciate you listening.

Hope you had a great day in a better night. We’ll see you back here again tomorrow after the close.