In today's episode, Tyler covers a tough day on Wall Street where all four major indexes saw declines, but he also sends out a reminder that even during market pullbacks, there are bright spots and opportunities for savvy investors. From big moves in stocks to dramatic swings in sentiment, Tyler covers it all. Tune in to today's podcast to learn more.

Don’t look back because the market is closed. Good Thursday afternoon everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a fantastic day out there today. I can’t sugarcoat it. On the market front, we did not have a good day today. All four of our major indexes did move lower on on the day, but under the hood of this market we do continue to see some bright spots.

So stay tuned. We’ll cover all of that and much more on today’s podcast. Of course we’ve got to cover the latest rounds of earnings and the updates to add on, but we got that Kip covered in his podcast yesterday. But since the market’s all rough, I’ll give you a hint on the earnings front. The beats continue here. The double digit beats continue here. I’ll talk a little bit more of that about that in a minute and one that I cover here often. Sentiment.

As you well know, we had started to get to the greed side of sentiment on many of our sentiment tools that we look at out there now. A quick 180 in just the last few sessions. I’ll touch on that here in a moment. Then of course, as I’m sure many of you are wondering, bitcoin, when are we going to cover that? We’ll cover that and much, much more here today as bitcoin was much lower on the day today. It’s been a rough, rough road here for bitcoin from the all time highs to today. But have you been in bitcoin for a long time? You know these moves end up being the best buying opportunities but it never hurts while you’re in it. So stay tuned. I’ll get to that here more in a minute.

[00:01:51]:
But first let’s kick to the high some of the high notes on the day after the close here we got another big round of earnings for companies but Amazon being the big one reporting today, coming in with a beat on revenue. I mean just massive, massive revenue numbers. Over $200 billion in revenue, slight miss on earnings per share, but as we’ve seen from tech company after tech company beating is not enough right now for this market is Amazon is following the rest of its peers with some big losses after the close. Today was down as much as 13% I believe at one point. Now down still 10% in after hours trading. You know when you’re looking at the mega cap companies like this and how much money they are still making at this point, but the fear is that the AI build out is being overhyped I’ll touch on that more with our overall market watch. You know, if you’ve been paying attention, one of the big stories here, I’ll touch on it briefly has been this anthropic story that they’re going to eat all the software companies lunch out there. Igv, the software ETF is down significantly and continue to head lower today.

[00:03:13]:
Really the leader to the downside made up of companies, some of them in the mag 7. Right. Microsoft being one of those. Palantir also being just another mega cat name, not in the Mag 7, but overall the sector is down 30%. And it reminds me a lot of the Deep Seek moment that we had just a year ago. It’s hard to believe time really flies in this market right now. There’s been so many market moving headlines for this as we’ve called it the innovation revolution. But remember, just a year ago the Deep seat announcement came out and it was, it rattled everybody in the tech industry.

It was this Chinese company working off of old hardware and they came from out of nowhere with a small crew of people, a small team and just blew away, you know, companies like OpenAI and the other major players in the AI space. Now here we are a year later. I don’t know if a whole lot of people even know what Deep Seek is at this point. So as time went on, it came out that, you know, that it had been overdone and overhyped. Right. Maybe they did have more data centers and, and working on newer chips than we thought. Maybe the team was bigger and they’ve been working on this for longer. And ultimately again today you don’t even think about Deep Seek in the top AIs and this anthropic situation proves that.

But the big fear here is that with their AI agents and so many different platforms now that you don’t even have to code to be able to build an app or a website or do all kinds of incredible things that this is going to destroy the software as a service model as a whole. So another one that’s big, that’s down is CRM, right? Salesforce, the ticker symbol CRM. And that if a company like Anthropic, you know, for a monthly flat rate, you can build whatever tools you want. Well, why wouldn’t I just build my own Salesforce, cater to my very specific needs and have an AI run it? Right. Of course that would be the dream. But I think some of that has likely been overblown now and a lot of these software companies, you know, will continue to be very successful from here. A lot of them have their own AIs as well so they can focus on what they do. It’s kind of a lot packaged into, into one little deal where you might use, let’s just for broad examples here, okay, use Constant Contact is your email software and then you use, you know, Salesforce for your CRM and you use another tool for meeting zoom meetings during work.

[00:05:57]:
Right? Well, they might try to encapsulate all of those under one roof, but you know, trying to do too many things at once, you do a lot of things poorly. So people want to stick with the very dedicated type of software that they know works for their system and they want to use this, this email platform from that tool and the CRM from that tool and the phone automations from this tool, SMS from elsewhere. You know, the best will still be the best at what they do. So I think a lot of this again reminds me of the deep seek moment that we saw just a year ago in the AI space. This has a lot of the same feel here as well. And again back to earnings, which I’ll cover a little bit more here. When you’re seeing earnings growth like we’re seeing right now, you know, double digit, year over year gains for these companies, forget the fact that they’re beating estimates, right? They’re blowing away sales and revenue from just a year ago. Many of these are.

So it’s been a very good earnings season and not when those kinds of events are happening. That’s not the sign of a market top. So, so the fear is now that all of these companies are behind and they’re just throwing more money at a race that they’re losing. But these capital expenditure numbers are insane. And how do these not boost economic growth overall? Right. For years people complained about these big companies having such a cash moat around them. Right? People always talk about Apple specifically from years ago when they had, you know, $200 billion in cash. You know, then they were keeping too much cash, now they’re spending too much cash.

Which way do they want it? Right? But overall, just take a look at this. Before today, before Amazon reported earnings, Alphabet had it announced and raised their guidance to roughly $180 billion of expected cap capex in 2026. Huge increase from last year, 100% increase from last year as a matter of fact, meta going from 115 to raising theirs to roughly $130 billion range a 93% Microsoft, a 64% increase in capex year over year. Those three companies alone account for over $400 billion of expected capex for 2026. That is absolutely incredible. You know, one headline that didn’t get talked as much about over the last few months is the foreign investment we’re seeing here in the US for this massive AI infrastructure build out all kinds of infrastructure needs that we have right now from energy to tec. This is the innovation revolution and there’s going to be disruptions along the way. We think that what we’re seeing right now is just another disruption along the way.

[00:08:50]:
Like I said on Tuesday, Kip said yesterday, you know, we’re getting our, we’re getting our shopping lists ready here. We’re going to be able to buy and add two fantastic positions here at a great price before the next major move higher for this market, you know, and in the meantime, this really short term here, you know, bottoms are messy. It never feels good when you’re going through a downturn like this. But we see this as a counter trend move. Yeah, we’ve got really high, really overstretched to the upside. We’re seeing a bounce back to the low side now. Right. But we’re already getting close to the point where the rubber band has just been stretched too far.

We think the reaction here in many names has been overdone and similar with Bitcoin as well. I’ll touch on that one a little bit later in the podcast today. But again back to the final points on CapEx because Amazon reported earnings after the close, as I said, beat on revenue. You’re coming in really right in line with earnings per share. But after Google’s announcement of raising their capex yesterday, Amazon had to come in and try to one up their biggest competition. Right now I say their biggest competition because Google has been the darling of the Mag 7, you know, really for the last few months or so. It’s at all time high after all time high. There’s a lot of excitement behind their TPUs, their tensor processing units, which is their version of an AI chip.

[00:10:18]:
That chip that will compete in some ways, right? In some ways will compete. I think it’s if I understand correctly, more niche use case than Nvidia’s gpu, their graphics processing unit that can handle a wide variety of of workloads compared to the tpu. The TPU is designed very specifically for Google’s needs, but still again the darling of this space. It’s and still right at all time highs. But now we throw Amazon in there having to one up Google with their $200 billion capex for 2026 now you combine all of those, throw Apple and Tesla in there, who also have huge numbers as well. Tesla over $20 billion expected to spend Apple $14 billion. I mean, we’re talking about over $700 billion in capex from the mega cap tech companies. That’s just six companies there, right? $700 billion.

You know, it could get to the point here where all of the other broad market companies combined, we might spend over a trillion dollars in capex for this build out. You know, this is just pretty incredible. So of course we’ll see what happens. But we do remain very bullish over the medium to long term for this market. Again, in the short term, bottoms can be messy, but we remain at 9 out of 12 of our VRA investing system screens as bullish here. And with readings like that, you use pullbacks like this as buying opportunities. All right, let’s take a quick look at our markets here on the day to day and I’ll kind of come back to that theme of getting our shopping list ready a few times throughout this podcast here. All right, again, major indexes here.

[00:12:13]:
The software names do continue to get destroyed. Tech, as far as our major indexes go, was the biggest loser. But we did also see the Russell 2000 down just under 1.8% on the day after that, the NASDAQ down nearly 1.6% on the day today. And as Kip and I were talking about this podcast going into the day here and what we really want to see from this market, well, one thing you see it from time to time are this, these bad reactions to earnings numbers, right? You want the market to be treating good news as good news and then treating bad news as good news. Even that’s really a strong place to be in for a bull market. Again, we see this as a counter trend move, but we don’t like seeing companies reporting good earnings and being down. So we need to flip the script here for this market. We also want to see the semiconductors leading to the upside.

You know how much we love to see tech leading the market and Semis leading tech well today, even though they finished lower, you could still say they had nice outperformance versus our major indexes. SMH was down more earlier in the session, actually did get into positive territory on the day and I also point out that it held yesterday’s lows. I think it’s very good to see that’s at least constructive here in the short term. But Semis down did finish down a quarter of 1%. So again here, relative outperformance to tech on the day. So that is semis leading. And you know, one other factor, not quite as much here on the semis, but in major bull markets you don’t always get to extreme oversold levels. But for the Nasdaq is we’re not quite there yet on the semis, but for the Nasdaq, this is some of the most oversold levels that we’ve seen since tariff mania in April of last year by many of these metrics, you know.

[00:14:17]:
And so when you’re looking at those kinds of levels, you really again start to get a little bit excited. Maybe we’re a little soon on it, but start to get excited to take some positions here. Add to our favorite tech positions when you’re seeing that level of oversold conditions. I’ll talk about sentiment here. I’m going to save that here for just a second. We’ll finish our first our major indexes because Kip covered this yesterday. Moving on from the Nasdaq, the S&P 500 down 1.2% on the day, but Kip covered this yesterday, man. Pretty impressive that we just had the equal weight S&P 500 hit an all time high yesterday.

I mean again, I know I’ve been talking about this one here a lot, but. It hasn’t just been the mag seven names. I know I’ve been talking about that a lot. It has been the other 493 names finally participating in this move. Because for years people said, oh, it’s just seven stocks. It’s just seven stocks. Right? Well, we’ve got some other hard evidence here to show that it hasn’t just been seven stocks. Even after this pullback, you look at the percentage of of stocks above the 50 day moving average.

Wait till you see what we’ve seen in the internals over the last few days. But again, the equal weight, you’re seeing value names continuing to hit all time high after all time high when the only Mag 7 stock hitting an all time high is Google. Right. So they haven’t been our leadership again to this rotational theme. This is part of a healthy bull market and as far as you know, the narratives that we’ve talked about that the, the anthropic narrative being like deep seek here, all of these present so much opportunity for this market and distract and make everybody so fearful getting to the point where these moves are overdone. So take a look here. This one just coming back before the open this morning, that 19% of the stocks in the S&P 500 are at 52 week highs. I mean, how about that? That’s pretty incredible.

[00:16:34]:
One year later, stocks are higher 100% of the time. We love analytics like this on a day like today. It certainly makes you feel a little bit better about the market. But again, when you’re seeing narratives being spun like this so quickly from the financial mainstream media, you have to remember that those aren’t the reasons that we’re even bullish on this market. We said from the bear market lows of October 2022 that this is a structural bull market. Okay. The fundamentals here all remain in place. Again, back to the point.

Great earnings reports so far not the sign of a top. We’re only in year two of the Trump economic miracle 2.0. We’ve said we were going to see that since his election. Okay. Now we actually just had Cathie Wood of arc saying that as well, that this is Reaganomics 2.0 and that we’re going to see fantastic growth and low inflation, innovation leading to deflation. Maybe that’s part of the fears in this market right now. We need lower rates from the Federal Reserve. On that note, the 10 year was slightly lower on the day to day.

[00:17:46]:
We want to see a lot more of that. Again, let the narratives freak out everybody and use their fear as an opportunity to add to your favorite positions. Again, much easier said than done. But as the old adage goes right, you want to be greedy when others are fearful and fearful when others are greedy. And on that note, I’ll go ahead and share this one now because I’m a little bit all over the place. Check this out on the Center Ultimate. Just one week ago we were in greed mode. In the last couple of sessions we went from I believe we were to start off the week at like a 58 all the way down to a 33.

Almost getting to extreme fear kinds of levels now in the AII Investor Sentiment survey. Not quite seeing the same, a little bit unchanged. We saw less bulls this week, but only a slight increase of bears. Most of that went up to neutral already. I can’t wait to see the the next week. What happens here for our final major indexes here, another few areas where we’ve seen structural strength. The Dow Jones down 1.2%. I mean we’re not far away from all time highs despite the fact it did finish down nearly 600 points on the day.

But I mean we’re 2% away from an all time high in the Dow. The Nasdaq has fallen the Most down Route 6% or so. From its all time highs. But for the Dow, we just saw the transports hitting an all time high yesterday. We’re seeing a number of the consumer staple names continuing to hit all time highs. That is a more defensive move. But it’s again proof that money is not fleeing this market right now. It’s just rotating into some unloved areas.

[00:19:40]:
The tech rally has been phenomenal. I mean there’s no better, better trade last year than the tech trade. You know those, those major themes change over time. Energy has had a fantastic start to the year even with the big pullback that we’ve seen in the miners, gold and silver, I mean if you look at where they were a year ago, it’s been a phenomenal run. So again I, we look at it as encouraging here. How many stocks under the surface are performing where well in this market. And not only that, here’s one more as we head to look at our internals now we’re seeing all time highs in the NYSE advanced decline line again, another example of a broadening bull market. We’re looking at breadth expansion here.

Again it’s tough on a day like today to sit there and watch big moves lower happen like this, but so often it’s when you’re getting the most fearful, when you should be buying. Again, we’re looking at a structural bull market of size and scope for all of the main reasons that we cover here so much on the VRA Investing podcast. And that’s why we cover these themes so much because the days like today are when they’re most important to be remembered here. All right, so on on the internal notes on today, as you saw, we just hit all time highs in the NYC advanced decline line. Now that was before today’s action. We did finish slightly better than 2 to 1 negative there, but over 2 to 1 negative on the NASDAQ today. But for the move lower that we’ve seen, these aren’t just incredible, incredibly outlandish numbers. Next up here, 52 week highs lows actually came in positive on the NYSE, negative on the NASDAQ.

[00:21:42]:
Finally here volume for the day today. I want to get quick one quick calculation here. Because these were some big beats here. We did finish between 2 to 2 to 1 and 3 to 1 negative for both the NYSE and the NASDAQ on the day with over 70%, over 75% downside volume for the NASDAQ. Of course we don’t want to see that continue but that’s, that’s been the hardest hit group about what you Expect to see when you’ve seen a week like we’ve had so far. Oh, also on the sentiment side, put call ratio has been elevated the last couple of days. Got above a 1 yesterday but spent all day in the 0.9. This is when you start to look for a flush out from this reading.

If you start to see really high numbers there, you will start more confidently getting into positions. All right, looking at our sectors on the day to day, we finished with two out of our 11s and P500 sectors higher on the day, more than you might have expected. Here we had consumer staples leading the way as might not shock you but that was just shy I believe of an all time high. Sorry, it did hit an all time high finish off of those levels and is now extreme overbought on steroids. So while we’re starting to see oversold conditions appearing in our former leadership right until the last few weeks or so, now we’re getting the opposite from the defensive sectors telling us, you know, at the very least here we are due for a little bit of a bounce, a little reprieve from this move lower that we’ve seen. But for the consumer staples you’re seeing, you know, American companies hitting all time highs, not a bad thing. Walmart, all time high. Coca Cola, which we never talk about here on the podcast, all time high for our laggards on the day.

[00:23:46]:
See my screen just refresh here. Materials which has been on a phenomenal run. Right. Consumer discretionary tech and the financials. All right, finally here for today, one more refresh of my screens here for our VRA commodity watch. Gold is slightly lower on the day today, down 3/10 of 1% now at 4780. Excuse me, my system is Jackson up a little bit here. Of course the gold miners did move lower on the day today.

But again what an incredible move it’s been so far. And with gold at these prices, most of these mining companies, I mean just a year, two years ago, we’re looking at break even rates after inflation of $1500, 1750 an ounce. Some even better than that. Much better than that. Right. So when you have gold still at these levels, the massive move higher we’ve seen in the last year and a half or so, you know, at 4700 they are making more money than they thought possible at those low break even rates. So this is a long term story here from the miners for both silver and gold. Silver, you know, we’ve talked about how incredible of a run it was to 100.

[00:25:09]:
We would have liked to see it staying closer to 100 right now, but it is down again on the day today at $67.83 an ounce. You know, in one, I’ll get to this here. Second for bitcoin, first up, copper now at $5.72 a pound and oil at $63 a barrel for bitcoin here. You know, a lot of what we’re seeing, you have to wonder if so many people in the bitcoin community weren’t kind of asking for this in a way because Everybody wanted the ETFs and other ways to get access and to legitimize bitcoin and cryptocurrencies as a whole, to get some type of regulatory framework out there for them to operate within. Now with those also comes some downside, which are derivatives and paper trading. And you have to wonder how much of this move in bitcoin is a similar suppression tool that we saw for so many years from gold and silver. It almost looks like a very similar playbook as the, the big banks used here for gold and silver. So how long that can go on for, you know, in some ways that’s anybody’s guess.

But if you’re looking at it through the vra, the lens of the VRA investing system, we are at extreme oversold levels here. And the real fear here, you know, we’re down at the lows today as much as 50% from the all time highs that we saw in bitcoin. So of course that doesn’t feel good. And the fear then begins for people of, well, how, how much is the rest of the market exposed to bitcoin? How much are these companies in other sectors even exposed to bitcoin? Of course you see the big sell offs and companies that we know are directly exposed to bitcoin, like Microstrategy. And you start to wonder with everyone talking about force forced liquidations in Michael Berry, talking about a contagion style of event that dominoes. Yeah, the dominoes out of control. Bitcoin being kind of the first domino in that step. Right.

[00:27:24]:
So people who are very long, bitcoin getting calls, having to sell other assets in order to pay for their losses, they’re seeing in bitcoin, you could see how that would quickly get out of hand. We see those fears as overblown, kind of another narrative driven, talking heads driven kind of event like we’re seeing in this anthropic moment. I’m sure anthropic has great technology, but is it really going to destroy every single Software as a service out there, I would say unlikely. Right, and we’ll see how that plays out. Again, that feels like a deep seek moment. Bitcoin feels like the manipulation that we’ve seen for years from gold and silver, but we’ve seen pullbacks like this for bitcoin. You know, if you’re been in bitcoin for a long time, then this doesn’t really concern you that much, you know, over the years, even with this pullback on our, on our latest position in bitcoin, we have fantastic gains from bitcoin over the years. You know, Kip and I first bought it, I believe, just right after I got out of college, 2014 or so at like, you know, four to six hundred dollars a Bitcoin.

You know, first added it to the vra portfolio in 2017 at $2,000 of Bitcoin. And we’ve sold and bought it back over the years and had fantastic gains in it. But from having traded bitcoin for that long, you start to come to expect some major pullbacks like this. In 2017-2018, we had what they refer to as the crypto winner winter where it fell, you know, 84%, peaked at trough after Covid, it fell 77%. During COVID it fell 50%. Right. So when China banned Bitcoin, it fell another 55%. So you see these patterns.

But one thing that does look like it’s happening is as it’s matured, you’re not getting the 84% massive decline, then it’s 77, then it’s 55, then it’s 50. Right. So hopefully we’re getting very close to that bottom of the level here. That’s what we’re looking for here in bitcoin. Unless the narrative changes, of course. There’s always the, the out there fear of, you know, can Quantum come in and, and be able to hack everybody’s, get everybody’s keys for their bitcoin. What’s the regulatory, what’s the clarity act really going to look like? If we can get some, some more clarity on that, then it’ll be off to the races for bitcoin and cryptos as a whole. So stay tuned here.

[00:30:03]:
We’ll continue talking about it every day at the market close. Bitcoin, you know, now slightly off the lows of the day. And that’s one of the things, broadly speaking, for our market. We finished off the lows today. All right, 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@vra letter.com click the podcast link at the top and we’d love to have you with us.

Thanks again for tuning in.Until next time. We’ll see you back here tomorrow for the close.