In today’s episode, Kip breaks down a deceptively quiet day in the markets, revealing that there’s actually a lot happening beneath the surface. Kip zeroes in on the powerful leadership of the semiconductor sector, explaining why this group is the ultimate indicator for market direction and what its current strength means for investors.

Don’t look back because the market is closed. Good Wednesday afternoon everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. A lot happened today. It may not look that way at the final tally. It was kind of a quiet day frankly. But a lot happened internally today.

Once again, semis leading the way higher. We’ve focused on this group like, like, like, like hyper focus is the word on the V4. Because if you, if you, if you followed our work at all for the last couple of decades, you know that there is no more important group than the semiconductors that lead the way in both directions. And I’ll be kind candy with you if we paid a little closer attention to the semis back when this bear market started, when the, just before frankly. When, when, when Nvidia and Tesla first in, first out, when they first started going down in December, January, the markets were telling us then something bad was coming this way. I know it seems hard to believe the market to know that Trump’s tariff policy was about to hit the market. But then markets do. Something was about to happen.

[00:01:06]:
And because the semis led lower and that was of course a brutal, you know, we just went through folks again another brutal four week bear market. That now makes, that’s four bear markets since 2018. That’s unprecedented. Okay, the average stock has fallen, you know, 30, 40, 50, 60% in each one of these. But so we’re seeing just the opposite now. That’s the key point here. The semis again leading the way higher. This morning in our very letter, I shared a chart that Tyler, I was talking about.

Again we’re, we’re fixated on, on this chart it’s a semis to the SP 500 because at the exact bottom of the bear Market on April 7, very next day of trading, the semi started leaning higher. Done is lead higher since. So they’re still giving a buy signal today. SMH and Semi ETF up 1.2%. Nasdaq was second place up 3/10 of 1% against semis leading Nasdaq, Nasdaq leading the broad market. SBF 100 just barely closed higher today. But again that’s the repeating pattern we’re seeing here. And that’s just, it’s a buy signal.

That’s just the only way to put it. Even though we had just an amazing month of May, we’ve now with the rallies of the last two days, we now have NASDAQ SP 500 and NASDAQ 100 have now broken out each of These have broken out to three month highs. And that leaves the SB 500 after today is only 2.8% away from an all time high. And NASDAQ after today is only 3.6% away from hitting an all time high. The magnets to all time highs in place. That’s what’s happening here. It doesn’t mean we’re not going to have a down day here and there, but there’s a magnet to all time highs. And then once that happens, there’ll be a magnet to higher prices still like we had in 2020.

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We think that, we continue to think the parallel here to 2020 is very strong. In other words, once we get to all time highs, we’ll pick up more steam. Right? And then we’ll, we’ll finish the year higher. I don’t know, 10% higher from that 15%. Who knows? Again, the economy is really doing very well. I think you got to not pay attention to this government data which we’ve, we’ve warned you forever. It’s just impossible to make sense of this. We heard this today with the ADP jobs report.

You know, there’s really no strong correlation between that report and the one we can get on Friday. But even that doesn’t matter because these monthly reports are, they’re, they’re, they’re pathetically put together. The Wall Street Journal has a piece on this today about the inflation data. Like, we don’t know, they’re trying to blame it on Doge cuts. Right. We don’t know how these, I think people got laid off. Maybe, maybe they’re not out there asking the question they’re supposed to ask. No, they’ve never been trustworthy.

Right. It doesn’t matter if Republican president or Democrat president. These, this, these data points have never been accurate. All they lead to is an overbought market. They get hit on something perceived as bad. It’s really the technicals folks, that’s really what’s driving this action around these quote unquote important report, economic reports we get. And that’s why we don’t care about a single report. We’re looking at a trend.

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We want to see 3, 4 months, even 6 months is even better for, for a trend. Just hoping that these, if you get six months in a row of, of, of of reporting, you know, maybe you can get an a, an blended average out of those three or six reports that do make sense. So bottom line is, watch what the market’s telling you. That’s the markets. That’s our doctor. Okay. That’s our doctor right there. It’s telling us exactly what’s really going on in the economy.

And if you saw the 10 year yield today, again, almost down 10 basis points today, 10 year down to 4.36%. Again, they’re blaming it on the ADP jobs report. But you know, Trump, Trump immediately came out and said to you, pals, what are you doing? You’re wrong. Again, you get it’s ridiculous. You got to cut rates. And Trump is right on this. Jay Powell is. Name one time that Jay Powell’s been right.

Can you. Since he got the job in 2018. Because I can’t. Conversely, I can tell you five big misses that he’s had. On the flip side, we think this is one of those misses now and that rate should be a lot lower. Trump’s right. Europe has cut rates nine times and we’re still sitting here with elevated rates. And it does matter.

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It does matter because we are coming out of the Biden economy, right? We are transitioning to a tariff based system. There is confusion here. This is having an effect on the economy. Trump’s talked about this transition period. Okay, so yeah, the economy is slowing, but it’s what’s on the backside of this that’s really going to matter. And again, that’s driven by the innovation revolution, long term trends in place that we’ve been talking about with you now for, since we wrote the big bribe in 2022 that are really driving this train. But in the meantime, there is weakness here. We’ve seen, you know, there’s a tremendous amount of homes on the market.

I think it’s a level we’ve not seen in a couple of decades. But so these high rates are having an impact. And Jay Powell should be cut. They should be cutting. They will, but they should be cutting now. But again, pay attention to what the market’s telling us. The market’s telling us wants to go higher. These charts again, the semis leading away, first in, first out, both Nvidia and Tesla leading the way.

Although not today. Tesla’s down today. But again, Nvidia’s led the market, Tesla’s led the market. These are first in, first out market signals. These are timing signals that continue to point to higher prices. And really, you know, we shared this this morning in our very letter. You know, we’re really not as crazy as it might seem. You know, we just had a 5%, a 6%, SB 500 was up in May, Nasdaq up 9%.

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You hear those numbers, you think, well, this market really must be overbought. It’s just not, we’re not seeing it in the VRA system. Are we reaching somewhat overbought levels? Yes, but we’re nowhere near extreme robot levels. We have a lot of a long Runway in front of us before we even get there. Also against we shared this morning. Right now there are only on the SP 500, only 72% of the S 500 is above the 50 day moving average. 50 week high, it’s 87%. So we still got 50 points to go there before we’re at even at a 52 week high.

And on the, on the 200 day moving average, folks, we only have 51.8% of the S P 500 above the 200 day moving average. The 52K there is 83.2. We got 30 points to go. So it’s not showing up on the honors on our momentum indicators. It’s not showing up in the, in the data. And again this, all the buy signals continues to show again. The semi is leading every day. Pretty much continues to tell us as Mark wants to go higher.

And again there’s so many, there’s still so many people that are, that are negative on this market, that aren’t believers. You know, it’s, I’m talking primarily about institutional investors because retail has been all over this market. Retail’s got this thing right from, from jump street. And again, millennial retail investors, the Mrs. Watanabes of our era, have continued to nail this market. And we think, we think we got a lot harder to go. We also have, by the way, 9 out of 12 VRA systems creeds are bullish. And we still think that any dips will have some diffs.

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They typically happened at the open. You know, we didn’t get that today. But every dip we’ve had, the Dow Jones opens down 200 or 300 points. What’s the common trend? The common thread is they’ve all been buying opportunities. Every one of those has been a buy. So that’s that. I think that’s a, that’s a repeating pattern we can all pay attention to. All right, let’s take a look on the hood today again.

It really, really was kind of a quiet day today. So this would be fairly short today in our data today for the internals, not much. Pretty much we had slight gains in NASDAQ for advanced decline, slightly negative for NYSE. That’s advanced decline volume was 2 to 1. Positive for NASDAQ. That was, that was nice. Volume slightly negative for NYC and we did have more than 2, 200 more stocks hit a 52 week high than 52 low. It’s been a minute since we’ve had that strong number that, that, that should keep building now.

Now that again we’re, we’re nearing all time high. Investors are really starting to pound money into this market and we think of a good reason. Sector watch today was pretty mixed. We had six sectors higher, five finished lower but again not a lot actually the way communication services led the way. Upside 1.3%. Downside energy given back yesterday’s gains today. Energy stocks down 1.9% as oil struggled a bit today. And what else here? Commodity watch gold today up 20 bucks announced at 33.96 puts it 100.

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And what is this? $105 an ounce below all time highs. It’ll get there before long. Silver today after the big run it’s had now kind of a consolidating here at 34.66 an ounce. It’s up two pennies on the day. Copper today up 1.4%. Copper’s really getting the sea legs here now. That’s a good, a good sign for the global economy. Copper $4.24, $0.90 a pound again that’s up 1.4% of the day.

Crude oil giving back yesterday’s gains today down 1% or 63 cents a barrel at 62.78 a barrel. And finally the day bitcoin also consolidated. You see that we’ve had these big moves and now everything’s kind of consolidating. That’s good. You know you’d rather see consolidation than the trading range and a fallback to the previous bottom of the range. So consolidation like this is really healthy especially after the big moves we’ve had. Bit Last trade here, 104,700 that’s down 1% over the last 24 hours. Okay folks, that’s it for today.

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