In today's episode, Tyler dives into the week's stock market performance, highlighting a very strong finish to what was otherwise a tough week. He also discusses the rapid shift from extreme overbought levels to extreme oversold on steroids (EOSOS). Tyler also shares a few of the most important charts that we are watching closely right now. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Friday afternoon, everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a great end to your week this week. A great Friday out there, after a bit of a rough week for our markets, but it was a much better Friday than we saw going into last weekend. So that’s a major plus there versus the NASDAQ, down last Friday over 2%. So, hey, you know, rough week, but at least we finished on a high note here.

We’ll dive into all of the week’s action here, the high notes, the low notes and everything in between. Uh, we’ll have a few more charts to share on this podcast here today as well that I’ll pull up here in a minute. So if you’re listening on audio, tuning in on audio, I will, don’t worry. I’ll describe them as. Well, if you’re driving or whatever you’re doing out there. If you’re on audio, I will describe the charts we’re going through. But if you’d like to see them as well, you can tune in to our video podcast. You can find them on our website@vra letter.com that’s, that’s vertical research advisory.

[00:01:20]:
VRAletter.com. We’ve also, we’re also on Rumble or if you like Spotify, you can find the videos on Spotify as well and every other major podcast platform out there. So yeah, come and follow us. Follow us on social media as well. We’ll share the links there too. But we’ve got some good charts to dive into here this week, so I’ll get to those here in just a minute. But to kind of recap here what we’ve seen over the last seven trading sessions or so since the S&P 500 hit its all time high last Wednesday. The Nasdaq 100 hit an all time high last week as well.

We began alerting at the end of last week that we had hit extreme overbought levels for our major indexes. Again, all time highs is about the time you start to get overbought levels. And with the help here of a seasonally weak period of the year, the second half of of February really has played out seasonally speaking to a te of what you would expect a weak second half of the month. It’s been especially rough for tech, the semis and Mag 7, which you want to see, leading to the upside, not to the downside. So we understand the concerns that are out there and we’ll dive into a bunch of them here today. But the good news here today, again, we finished higher across the board, but now those overbought readings have been they’re nowhere near. And actually we have hit now in our many of our major indexes, some of our favorite names as well. Extreme oversold on steroids, which we would write it out as EOS os Extreme oversold on steroids, which apparently Grok understands.

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Now. We did a fun little search today of just, you know, seeing what Grog thought about a certain chart. We didn’t even say extreme oversold on steroids. It was analyzing one of Kip’s tweets and it, you know, explained what EOSOS means, which we thought was pretty interesting. But that’s been our what we call here in the VRA investing system that is our most heavily oversold designation. So again, we are now at oversold levels and it was a rough week, but a good end to the week. We saw a lot of highlights from the market today under the hood of this market as well, and individual names. So sell offs never feel good.

But our bottom line here remains unchanged, that we are still in the early innings of a new bull market. You know, you’ve heard us compare this period a lot to the 1995-2000.com melt up. Now this is a chart. I’ll show you here in a second. Because we think it’s important to remember that time period right now because during that same time period there were five, five corrections of 10% plus and one bear market during that time period as well, a three month bear bear market during that time period where The NASDAQ fell 33%. So again, we think now is an important time to remember that nothing has changed in our long term outlook for this market for our economy here. You know, we’re just entering year three of this bull market. Bull markets on average live longer than six years.

[00:04:49]:
Again, that’s on average. We think that this bull market has the ability to go to 20, 30 and beyond. Our call remains unchained. Down jowl Jones 100,000 by that time. NASDAQ 40,000 by that time. And the key point, Kip tweeted this out today as well. Short term shakeouts like we’ve seen have no impact on long term mega trends. You know, the action we’ve seen and the disruptions we’ve seen.

While the headlines have been scary and impactful, they don’t impact our fundamental reasons really of being so bullish on this Market. Here are five megatrends that we laid out in the Big Bribe. If you don’t, if you haven’t read it yet, you know, if you come and join us for 14 days, we’ll also you’ll get a free digital copy of the Big Bribe as well. If you want a physical copy, you can go to big bribe book.com or reach out to us. As Kip mentioned on podcast, we’ll send you a signed copy of it as well if you’d like. So our five megatrends that we laid out, not only have they not been impacted, some of them will continue to pick up speed because of things like this. Financial engineering is number one. We’ve already seen the way that Scott Bisson has talked about, you know, utilizing the US balance sheet in new ways that haven’t been done before.

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So now our government is also getting into a more legitimate form of financial engineering than they were doing before by just getting giving away our taxpayer dollars. But that has been the case for companies for some time. You know, you see it in so many different areas. Whether it’s through cryptos, whether it’s through leveraged ETFs, you know, allowing instant options trading, right, zero day expiration options trades. These are all forms of financial engineering that will continue to, to send this market higher. We’re also still in the middle of a corporate earnings expansion. The Analyst estimates for Q1 earnings was for roughly 8% increase year over year. Kip said it long before Q1 started that he expected it to be in excess of 12%.

Well, the latest numbers were at 13 and a half percent earnings growth. So it beat analysts expectations by five and a half percent on that. That’s big earnings growth. Now I get that over the short and medium term there can be events that affect earnings, but we don’t see that as a long term issue. Again, we’re also in the middle of a long term housing boom. People can jawbone about the housing market all they want, but when one third of Americans own their home outright with very low debt to income ratios right now you’ll also see a lot of charts. You know, credit card debt at an all time high. Well, look at the other side of that though too.

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Credit scores are at all time highs. People’s credit lines are at all time highs. So as a percentage of multiple, you look at this from multiple ways as a percentage of, you know, usable credit to their outstanding balances is not at an all time high, nowhere near those levels. Then if you look at debt to income ratios also not at troublesome levels either. Or if it’s credit card debt to income ratios, also not at high levels. I pulled up some of these charts on the podcast and as we do more screen shares, I’ll share more and more of that data too. But again, so long term housing boom and then the millennial generation, which is continuing to grow into this market in the process of inheriting over, we wrote at the time, you know, $70 trillion in wealth, that number continues to increase. And then the red pilling of America, which we have seen time and time again, is still, still picking up steam.

I mean even like a late endorsements like Rand Paul is an example of red pilling. Right. You know, if he didn’t came out and basically said, I didn’t strongly endorse Trump and better late than never, I realize it’s too late now, but I strongly endorse him. I think a whole lot of Americans, you know, that’s a microcosm of, of what a lot of Americans are waking up to here, especially when we see what we saw today was Linsky at the White House. I’m sure many of you have seen the clips of this by now, you know, of Trump. You know, I’ve got some notes on it here. Let me find some of these here. Cause I don’t want to mess up some of these quotes.

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You know, first and foremost, zelensky came to D.C. today. I don’t think that meeting went the way that he expected. You know, and basically what Trump boiled it down to is the US has spent a ton of money in Ukraine and right now there’s really Ukraine without the US it’s not going to be a pretty ending is what he said. Right. So he went on to say, you either make a deal or we are out. You’re gambling with World War Three here and you don’t have the cards right now. He’s basically, you know, I’ll paraphrase here a lot of, of what he said, but again he’s saying you don’t have the cards.

You’re playing with lives and you’re playing with World War iii and you’re just not in a position really to make those decisions. Right. That shouldn’t be, you know, one of the most corrupt countries in the world, Ukraine. Right. A lot of people forget that, that it ranks always in, in the top most corrupt countries in the world. All, all of a sudden now the 300 plus $350 billion that we know about, that’s been sent over to Ukraine. I’m sure all that Money is being used in the best way possible. Right.

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But again, I mean, J.D. vance just, again, what a rockstar choice that was from Trump so far. Just continues to impress and had great things to say in the meeting as well. And, yeah, I mean, I could see how the anti Trump crowd would try to spin something like this. But look at it objectively, and what you see is American strength back in the room. Right. We’re not going to take this anymore. If you don’t, you don’t have to like it, but you’re really not in a position to negotiate.

And so we’re not going to let you take advantage of us anymore. Same thing on trade deals. Right. And so the impacts on the market seem minor compared to these major deals that have been problems for decades that are finally at least trying to be resolved. Right. And an actual effort, not just, oh, let’s revamp what we’re doing here. No, no, let’s change our way of thinking completely. It’s time that we stop being taken advantage of not only by our enemies.

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You’d expect it from your enemies. Right. But being taken advantage of by our allies as well. So I thought it was, you know, very interesting to watch. And J.D. vance kind of stepped in at the end. You know, maybe we shouldn’t be litigating here in front of the media. I don’t think he was trying to say, not in front of the American public.

I think he probably was trying to say in front of the media specifically. But then Trump came right in and said, no, this is what the American people need to see. You know, you. It was so interesting to see Zielinski get so defensive and uncomfortable. You know, again, not what he probably expected going into that meeting today. So fascinating stuff. Absolutely. And so with that said, that was certainly one of the major impacts on today’s market action when that happened.

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You know, there are a whole lot more quotes in there that I’m missing right now, but I’m trying to get to our next points here. But when that was happening and it looked like, you know, peace, peace talks are off. Zelensky’s not. They’re not doing their press conference. He’s headed back. The market was starting to sell off. We opened, you know, mostly higher on the day. Today, the Nasdaq was the first to turn negative, which is not what you want to see.

Right. Was tech leading the way lower. We started to rally back then this news happened. And it looked like it could have been a rough into the day today, but we ultimately finished at the highs of the day. So I’ll get to that here in just one more second. But I talked about it all week on my Monday and Wednesday podcast. We got the latest look at inflation data this morning which helped the market out in pre market trading and then it was kind of forgotten about. It came and went because there really wasn’t any massive news in.

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It came in at a strong number in line with expectations by some metrics the lowest number since March of 2021. So good, good PCE print, better than expected really. The, the shocking news of the morning actually came from the Atlanta Fed which actually just released data showing a big spike in the trade deficit and an update for first quarter GDP estimates, a massive revision here. You know, going into this, it was going to be last week about nine days ago I believe their estimate was for 2.3% growth. They did a 180 from there are now predicting one and a half percent decline in GDP from Q1. I mean that sounds scary and I think that’s why they did it really. I think it’s just another example of, you know, mainstream economists messing with the data. I’m sure that you could mess with this data and get a passable GDP estimate from the Atlanta Fed under Biden that would have been incredibly negative.

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Right. So I wouldn’t put it past them trying to pull some of those gimmicks here with this economic data in Trump’s term here. So we’ll see what happens there. But the good news is the market didn’t freak out on that slower growth, but the bond market did. And I’ll show a chart, you know, let’s go ahead and show one here to kick it off the chart of yields because yields did react negatively here down as you can see 1.26 on the day to a 4.23 on the 10 year. That is a new low now breaking below the 200 day moving average there. You know, good to see our view. For a long time it’s been that yields will continue moving lower.

There’ll be pops higher along the way like we’ve seen. I’m not using my cursor over here. There we go at the 200 day again, but again a new low for 2025 right there. So lowest since about mid December. Again good to see one of our long term views. But point being about these economists and the Atlanta Fed especially, you know, they really, these people have no skin in the game. So it’s tough to trust people like that. All right, so let’s dive in to our market Action here today showed off one chart there.

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Let’s dive into some more. As I mentioned earlier, exactly what we want to see this tech leading the way and semis leading tech as well. So I’ll get to the semis here in a second. Nasdaq up 1.6% on the day to 18,847. Now we’ve talked about this chart here at length, the 1995-2000.com melt up there it is in chart form. A little bit easier to see if you’re on video here versus just talking through it. So we shared this with members this morning. Again, from this period to the peak, from this period to the peak.

There we go. Going to take a little getting used to here. From the beginning of the chart to the peak, the Nasdaq rallied as much as 575%. But as you can see along the way, you know, it’s not, it’s never straight up. These are, there are five corrections of 10% plus including the one bear market here of 33% at the end of it. So again this is when we think it’s important time to, to zoom out and pay attention. This is the time period that we have compared right now to. So when we have a market here, that and after a good day today, these numbers are even better.

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We got the S and p less than 5% away from an all time high. You know, the Nasdaq’s the furthest of our three major indexes. You say the small caps is, is further away. Some people don’t consider that a major index. Nasdaq 8% away from an all time high. Right. So we look at this as regular healthy bull market action. You’re going to see this.

And really the key here is though how quickly we’ve gone from, you know, even neutral sentiment to extreme fear here. The fear and greed index got down to a 17 earlier today. Close at 18 today. Still, you know, at a 20. Extreme fear mode. Again, we are right in the range of all time highs. I know it looks far away there but about 8%. Go ahead and pull up the S and P here.

Again the S and p is only 5% away from an all time high. Now I’ve got one point to make on that here which I will quickly. Let me see if I can find it here. My notes might be another area of my notes here. But it is, you know, the S P. Very rarely if ever has it been this close to an all time high. And this level of fear in our major sentiment indicators Whether it’s AII Fear and Greed Index. And after all of those scenarios, you know, the market has moved higher from there.

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You know, again, as contrarians, this is a very bullish setup. You know, if you want to say it from a Warren Buffett kind of way, you know, you want to be a buyer when there’s blood in the streets. And that’s what we’ve seen. So again, back to this chart. We look at this as nothing out of the ordinary, really here. Yes, it hurts, it sucks while it’s happening. Right. But these are fantastic buying opportunities.

And so that’s how we’re going to continue to treat this year. Nothing, again, has changed in our fundamental outlook of this market. We are still in just the beginning of year three of this bull market. This kind of a bull market, right? This, in our view, has the potential to surpass this bull market. All right, let’s see. So we covered the S and P here briefly. Go ahead and cover it up 1.59%. Good day to day at 5954.

Go ahead and zoom back out here for a second. Also point out one last point here on the Nasdaq. You know, at the lows of the day was down, you know, a little bit less than 200 points on the day today. We finished up 300 points on the day. So a 500 point swing, 490 point swing to the upside today. That’s a big move. And again, finishing, let’s see about just making sure on the NASDAQ here at the highs of the day. I mean, it’s exactly what we want to see to finish out this week.

[00:19:42]:
And again, what a reverse from where we were last week. Next up here, the Dow Jones up just under 1.4% on the day, also having a really bullish big swing here today, finishing up over 600 points, 770 points off of the lows of the day, 770 point swing. That’s a big day. Lastly here, small caps up over 1% at 2163. All right, next up here, let’s take a look at our internals on the day to day as Kip and I were going through our post market calls as we do before the podcast, you know, we were talking about, wow, these are impressive internals, you know, not only just for an update, but for a day where we had such a rough last, you know, six, seven sessions here, where a lot of them we finished at the lows of the day on, you know, the internals can lag a little bit from that point of view, especially on the 52 week highs to lows where you have a pullback like this, you would expect more stocks are probably at lows than highs. Right? So these are really good internals today again shows the strength under the hood of this market, not just the mega cap names. So we had 2 to 1 advanced decline on the NYSE. Just shy of that though on the Nasdaq still strongly positive.

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We were negative on 52E highs to lows. But after a little bit of a sell off we got this morning as well, you know, not a huge surprise. Again that’s a major lagging indicator for the internals. But then volume, wow, two and a half to one positive or you know, almost 69% upside volume on the NYSE. You know also maybe just shy of two to one positive there or just above two to one. Excuse me, just above two to one positive on the NASDAQ as well. Roughly 68% upside volume there as well. So good day there.

Next up, looking at our sectors here on the day. I’ve got a few more charts here for you, so stay tuned for those. The financials leading the way today. Now we’re not huge fans of the financials here, right, the big banks, but as part of healthy bull market action, you want to see the financials participating and specifically you want to see the regional banks participating which compared to the rest of our market financials and regional banks have held up really well. But specifically the financials xlf, the financial sector ETF just hit an all time high today. Closed at an all time closing high as well. Right. As we say here often new highs beget new highs.

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So after a rough patch like we just saw, to even see any all time highs from a sector, that’s to us again a confirmation of how bullish we are here and how bullish we need to be going forward and being looking at these as buying opportunities. If this move we’re going to continue lower. I’m not saying that it’d be the financials leading the way lower, but they would not have participated in the way that they have. They would not have held up the way that they have here. Again all time high today after the week that we just had. Hey, we’ll take it. That’s a major plus there. After that we had consumer discretionary and tech leading the way.

Our laggards on the day, if you want to call it at that. Still up over 8/10 of 1%. Real estate and materials. Finally here for today, our VRA Commodity watch. Let me Get a quick refresh of my screens here. All right, we’ve got gold now down a little bit that about 1% to 1867. But we do have a very healthy looking chart here of gdx. Another, another group that we remain very bullish on recently got a bullish crossover.

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Any bullish crosses happen when a longer term or shorter term moving average moves above a longer term moving average. A death cross would be the opposite when a shorter term moving average moves below. I keep doing that, not using my mouse. So here we go. There’s the bullish cross there. 50 day through the 200 day moving average. You know, that’s a good technical friend there. Obviously you might not have wanted to buy that day, but over the longer term, golden crosses really work well.

It’s if I’m not mistaken off the top of my head, you know, one to three months afterwards, you know, you’re usually back to hitting new highs. So good to see GDX though finishing higher on a day with gold down still. I mean Gold at $2,867 an ounce. All right, so before I move on here, I did want to show one more chart today. I talked about yields earlier moving lower on that news today. And I we saw some flip flop here in this, the CME’s fed watch tool. I talked about this on Wednesday’s podcast. Kip talked about it on Tuesday’s podcast where we briefly saw a dip into three rate cuts being the majority probability for 2025.

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Now again that is the case. Look at your current target rate, 425 to 450. Now just today, you know, yesterday still two rate cuts was the primary probability. Now one day later, here we are, 32%. That’s a big move up there. You know, we can see big changes in this in a short period of time. But again, you know, confirmation of our view that rates are going to continue heading lower from here, as you can see. I’ve got a couple more here.

You know, while we’re on a side topic, I might as well keep it going. I will talk about Tesla here. Up nicely on the day. Obviously this has been a brutal comedown from its recent highs, but holding at its 200 day moving average. What we found interesting here was this gap fill here in technical analysis. You know, these gaps always do get filled sooner or later. So now that that’s filled, let’s see if we can resume our move to the upside. This is a company we remain very bullish on here.

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And I’ll go ahead and point this out. I’m not sure if I don’t think I mentioned it earlier for the semis as well. Sorry, a little bit, a lot to cover here today. Rich Ross was out with a great piece today. He’s the technician over at Evercore. He’s very bullish on Tesla here as well. What did he say today? I gotta find it here for you because it was good. He’s very good at the one liners.

Oops, here we go. Tesla instead of full self driving, full self buying then also for the semis here he remains very bullish also. Looking at this chart again, as I talked about on my Wednesday podcast, this is a important support level to see hold here. You could techn. This right here is an important support level to hold. You can see we got a brief dip below it here. Not what you want to see, but so far the reaction today is good not to see. Follow through on that there.

[00:26:51]:
So we look at this as a false breakout, which is exactly what Rich Ross is seeing here as well. I’ll zoom out. In case you didn’t see my Wednesday podcast, when you zoom out on this chart, it really looks a lot closer, cleaner here into us. This base here looks like a structural base. The broader the base, the higher in space and a bit of a coiled spring here, which we do expect to break out to the upside. Even still, we look at that action right there as a false breakout. Shakes out weak hands along the way and you know, makes sentiment extremely fearful as well as contrarians, you know, that makes us even more bullish. All right, so again, you know, Tesla here, extreme oversold as well.

Eos extreme oversold on steroids. Really? And I’ll get to bitcoin here in just a second as well. But for the rest of our commodity watch, let’s go ahead and wrap those up here really quickly. Silver now down 1.1% at $31.43 an ounce. Copper down 1.2% at $4.56 a pound. Oil back below $70 barrel today. Popped briefly back above it yesterday. Hey, maybe we’re seeing some of the early impacts of drill baby drill or just getting deregulation down, right? Saves a lot of costs that lead to higher energy prices at the end of the day.

[00:28:14]:
Oil at $69.95 a barrel. And then finally here for today, again, bitcoin. Here we go. All right, it’s Tesla still again, brutal sell off there. Totally get it. We began buying bitcoin though, at 2800 from a couple years back. We’ll zoom out on this chart as well. Just what an incredible run bitcoin has been on.

So, you know, we started buying it again over here and we’re going to continue adding to positions here. We remain extremely bullish on bitcoin going forward. Again, what an incredible run that is. So now we’re getting back down to, you know, somewhat support levels here. I’m gonna zoom back in here on a one year chart and show you. The last thing that I want you to see here is that we are also extreme oversold on steroids across the board here. Extreme oversold on bitcoin. And we just found out today as well that BlackRock will now begin buying parts of their ETF to allocate in some of their more aggressive portfolios.

So to get this exactly right, they’re adding their own Bitcoin ETF to its model portfolio, adding about 1 to 2% of the model portfolio’s allocation to bitcoin. Now we look at this as the first of many of these financial firms getting involved in bitcoin. Obviously they’ve already done it by launching an etf. Now they’re getting even more exposure to it as companies continue to add it to their balance sheet as states added to their balance sheet. I think we’ve seen something like 20something states have now added bitcoin to their balance sheet as well. Oh gosh. Messed it up the wrong way that time in countries again, countries we’ve seen confirmation after confirmation of countries adding it to their balance sheet as well. So let me just go quick, scroll through my notes here, make sure I covered everything here today.

[00:30:11]:
That looks about it for us here. Bitcoin as you saw the chart now at 84 191A Bitcoin kip talked about it briefly yesterday as well. I think that SCC news is really interesting that meme coins are not securities. I’m surprised not to see a little bit more of a reaction from that. Maybe a bit of a buy the rumor, sell the news kind of event for cryptocurrencies as a whole. But overall, you know, strong end to, you know, obviously a rough week this week here. Bottom line though, we’ll continue to use opportunities and shakeouts like this to add to our positions. You know, obviously we’re, we’re staying locked in here to these positions as well.

If anything changes in that regard. Again, if we made some changes to the portfolio, it’d likely be short term in nature. I say that with high confidence it would be short term in nature because we do remain so bullish on this market going forward again through 2030 is where we see this bull market going through. So come and join us. We’d love to have you with us. We’ve got a 14 day free trial going on right now. You can sign up@ vraletter.com where you’ll find our podcast as well. Just click the podcast link at the top. You can see our transcripts and our videos there as well. So thanks again for tuning in.

Until next time, have a great weekend everyone. We’ll see you back here on Monday for the close.