Welcome to the VRA Investing Podcast, hosted by Kip Herriage. In today’s episode, Kip Herriage takes us through the dramatic events that unfolded over the weekend, from Trump’s bold ultimatum to Iran about the Strait of Hormuz to the ripple effects felt across global markets. He explores how geopolitical tensions led to nerve-wracking moments, steep market drops, and then a surprising rally—in true “chaos strategy” style.

Kip Herriage [00:00:06]:
Don’t look back till the market is closed. Good Monday afternoon, everyone. Kip Herriage here with the Daily VRA Investing Podcast. Hope you had a good day. Let me ask you a question, uh, everybody sleep well this weekend? Oh man, what a nerve-wracking weekend. Uh, look, we found out after the market closed on Friday, I guess, I guess it was late Friday night, that Trump had given 48-hour early Saturday, I forget exactly when, Trump had given the Iranians, of course, a 48-hour notice to either fully open the Strait of Hormuz or he was gonna bomb all of their power plants, starting with the biggest one first. So clearly it’s a very direct message that if you’re Iranian, you knew what he was talking about. And I mean, I don’t know that I know anyone that looked at that and said, okay, oh, that’s good news.

That sounds like something good is gonna come out of that. That sounded like This is, okay, this is how World War III starts. That’s what it sounded like. And Tyler and I were just talking about this. I covered it some on my podcast on Friday, but just imagine being an Iranian living in Iran or anyone living in Iran right now. And with what happened over this weekend, the threats about the way the bombing’s done nothing but increase, you know, the military strategy’s ramping and ramping, ramping, all leading to to, to, to more and more scary moments, right? Just imagine being an Iranian living in that. This was their Cuban Missile Crisis moment. That’s what this was.

And, um, I know a lot of Americans that kind of feel the same way because, again, this could— this, this is the kind of, kind of thing that could escalate very quickly. Not that Iran could nuke anyone, but there was talk of Israel doing it. Very quickly you could see Russia and North Korea side with Iran. And again, next thing you know, that’s, that’s how, that’s, that’s, that’s why this is, as we all know, so frightening. Because all it takes is one, one moment, one event, and it’s game on for everybody. So thankfully, before the market opened this morning, futures, when I woke up, futures were down about 400 points. I actually thought they’d be down a little more than that. But again, smart money knew something was coming, something was coming, and it did.

Futures are down 400. I woke up this morning, slept very little last night, and then boom, on a dime, uh, Dow Jones up 1,200 points. Now we lost half of those gains today. We finished up 631 on the Dow, uh, but again, this was a solid day. I’ll cover— we’ll cover all this in a moment. Solid day, great internals, all 11 sectors high on the day. And, um, a lot of good things to talk about. But, you know, this is, um, this is a world, this world of chaos strategy that Trump understands in his DNA.

You know, if you’ve read The Art of the Deal, you know, in the first chapter, I think this is very instructive. Trump talks about— obviously he’s already a very super intelligent, hyper intelligent guy. Had a military school, um, father made him go. There was something there that he wanted to work out of him. But Trump talks about this first year, his first year working with his dad, and that he was obviously a socialite, you know, that’s also in his DNA, and loves being around people, especially people in a position of power. And he said I would go out because I don’t drink, I didn’t drink, and I would go out and see people drinking and then just talking about everything, just blathering, disclosing things they shouldn’t talk about. Because I learned so much from that environment. I learned, number one, how not to carry myself, and number two, how to cultivate friendships and learn things.

So this is who this guy is, right? When people say 4D chess, It’s worth talking about, right? You may not like everything he does, you know, you may not like some of the things he says. I think we could all put our hand in the air for that one. But when it comes to strategy and understanding 3, 4, 5 steps ahead, he does. I’m convinced of it. I think most of you listening are here as well. And so that’s what that threat was designed to do, to speak on the same level that all of his political leaders and the military leaders in Iran— that’s a message, that’s a language that they understand. Peace through strength. And so hopefully we got good news coming here.

We have a lot of signs that, yeah, we do. We have a lot of signs that this is over. Okay, and we’ll talk about those. Um, I think this will cover this as well. This is, this is a great reset opportunity. You know, this is the third one of these we’ve had with Trump as president. Tyler reminded me it’s actually the fourth. Uh, the first was the, the fourth quarter meltdown 2018 when Jay Powell hiked rates 7 straight times, including in the month of December when no one was around to buy the market.

[00:05:36]:
Crash, just absolutely crashed. The worst fourth quarter that we’d ever had in the stock market, including worse than the Great Depression in 1929. That, that was a bad fourth quarter. 2018 was worse. Thank you, Jay Powell. Again, that was a little elongated. Again, that lasted the whole quarter. It hit really hard in December, but that was a painful fourth quarter.

But the, the last 3, including the Iran deal, uh, the pandemic, 3 weeks, 3, 3, 3, 3 and a half weeks, right? Um, the tariff mania, 3 weeks, and now Iran, 3 weeks. Interesting. No, also shared this in this morning’s letter, um, going back. I think this went, you know, I’ve got it, I got the chart here. This goes back way back. This is back to, um, you know what, I don’t have the actual beginning on this, but I know it was, uh, I’m sorry, I do have it. Since 1939, since 1939, major geopolitical events, the markets have fallen for on average about 15 days. That’s where we are now, 15 days.

And then that was the bottom. Now, a lot of these cases, matter of fact, in most of these cases, the news kept getting worse, right? And that’s what keeps so many people out of the market. But the bottoms were in. I think that there’s a really important lesson in there for us. You know, again, the markets are always forward-looking. And, um, so again, I think this is a big opportunity for, for investors. Especially for new investors that maybe, you know, have a lot of money they want to commit, haven’t done so, maybe they’re afraid to do so. Don’t we see that in the data? It’s— we still see that in the data.

Tyler and I have been talking about this for 3 years, and it’s still in the data. Again, $35— I think the latest number, $35 trillion in home equity. Um, once rates start falling— and again, we’ve got to get Jay Powell out of there. Uh, Trump’s gonna— am I— look, I, I’m doing the best I can, folks. I’m, I, I’m telling Wayne about this every day. Wayne, have you got to tell your buddy, you got to tell him to drop this lawsuit against Powell and the Fed. It’s going to accomplish nothing, and Jay Powell is going to stay in that job potentially into 2028. Again, his, his, his, uh, term as Fed chair ends in 2 months.

But as he said, as long as the suit’s going on, and he’s got Republican backing on this, Tom Tillis runs the Senate Banking Committee, has said he’s simply not going to allow Kevin Walsh, the new, you know, nominated Fed chair, he’s not going to allow him to come up for a vote or even a hearing. Of course, Tom Tillis is a traitor, and, you know, he’s not even trying to run again. He’d get smoked. He’s a big-time Trump hater, and so of course this is what Tom Tillis would do, right? But I’m talking to Wayne about this, and I’m trying to talk about it every day because I think we need to get a movement going, and I’m hearing no one else talk about this, but Jay Powell has to go. I think any reasonable person can look at Jay Powell and his hatred of Trump and be honest about it and say, you know what? He clearly has it out. This is the only war, this is the only time in more than 75 years that interest rates have gone up in a time of war or military conflict. The only time. Explain that.

We know what, we know it. And some people go, well, Kip, oil prices are spiking. No, we’ve had many times where, when oil prices spike at the beginning of a war. Matter of fact, it happens pretty much every time. But rates still went down. That’s because the Federal Reserve, led by the chairman of the Federal Reserve, want to help their country, want to help their president. This guy clearly has no interest in helping Trump. Midterms are coming up.

[00:09:48]:
We talked about this a lot with you, haven’t we? The banking cartel is the most powerful— 7 cartels rule the world. Again, Jerry Griffin, thank you for teaching me this many, many years ago. Banking cartel is the most powerful cartel. And who runs the banking cartel? Central banks. Federal Reserve. Midterms coming up. Look, this is— I think, again, I think any, any unbiased, honest observer is going to say, yeah, that sure looks like that’s the playbook with rates going up the way they have. But that’s why you got to get rid— get rid of the lawsuit, get Kevin Walsh in there in May.

Think about this. At the Fed presser last Wednesday, when Jay Powell said, you know, air quotes here, “I’m not going anywhere,” right? You know, “Until this suit’s over, I’m staying here as pro tem Fed chair,” or whatever he calls it. That moment was when gold started getting really spanked. Silver as well. Silver’s industrial metal, so usually we talk about geopolitical events, we talk about gold. You know, although of course they have been moving in tandem, but gold is really the safe haven play. So here we have a war, gold’s going down, not just a little bit, it’s getting demolished. Bear market already, 22% decline through this morning’s lows.

So this is get Trump. I’d love for someone to talk to, to, to tell me why I’m wrong. Anybody let me know why I’m wrong. You can’t, because in my opinion, again, we think about this stuff a lot. I’ve been talking about this a lot. I’ve been one of Jay Powell’s biggest critics. On, on Charles Payne’s show 3 years ago, for the first time, I said Jay Powell should resign. It’s the worst Fed chair in history.

And I walked through the history of all the bad calls he’s made, which just coincidentally happened to all be during a Trump presidency. Under Biden, keep rates at zero, right? Don’t hike rates. Trump, let’s go, let’s start hiking. But again, the minute Jay Powell said he wouldn’t go anywhere, that’s when rates really started kicking up, and that’s when gold got demolished. So we got to get rid of Powell. I’ll move on, but, but, you know, have this conversation with people, spread the word. It’s got to get back to Trump because it— one, as soon as Powell’s gone, I’m telling you The moment that Trump drops this lawsuit against the Fed and Jay Powell, we’re going parabolic. If you hear the news, just go buy calls.

It doesn’t really— buy QQQ calls or SPY calls. QQQ is probably the better play. Just go buy calls because that’s melt-upville. It’s the inverse of what we’ve just seen. And again, I think that’s coming. It just makes too much sense. Certainly Trump doesn’t want Jay Powell to be in the job when the— by the— into the midterms, right? I think I’ve heard by, by June, by July, most voters have already made up their minds who they’re going to vote for. Now, maybe a little different for the midterms, presidential election, but you know, if people really hate Trump in July, I don’t know that they’re going to love him come November.

You know, so Powell’s got to go. All right, um, CTAs— going to talk about this in a moment as well— massively short commodity trading advisors, which are systems. We’re going to talk about it now. Systematic trading, we’re talking about algorithmic trading. These, these are computerized trades in most cases based on They do trend following, momentum investing, and it’s all computerized. It’s like boom, boom, boom, real quick, right? And that’s what they’ve done. They shifted to being short. You— we’ve seen it these last 4 weeks have been brutal, have they not? And that’s a big reason why.

Well, the data as of today is that CTAs, again, commodity trading advisors, are short by the— to the tune of $35 to $38 billion in shorts in the S&P 500 alone. The highest was $48 billion, about $10 billion more in the tariff meltdown. And we know what followed after it. And that’s what we talked about this last week with you, that when this pivot happens from Trump, and again, we said this on Friday, did we not? We said this on Friday that this was coming. It fit the tide, the parameter. Uh, if it, if it, if it all the narrative for it’s time to get this behind us. And a big part of this from the market’s point of view is going to be the CTAs, because now this is— I, I do believe this is more than a one-day phenomenon, and I think we’re going to get more and more good news. We got some reports this afternoon that, look, Iran denied it, but that’s the IRGC denying it.

You know, one of the things that’s happened in Iran, and we don’t have a lot of reporting on this because, I mean, it’s kind of a blackout, right? But one of the things that started coming out this afternoon is that there are multiple factions. This chaos that’s taking place because unbelievable bombing there has created all these factions in, in Iran. It would make sense that they do. IRGC, the most radical of the radical, These are the religious extremists. They want to die. They want to be martyred. They want those 72 virgins. Again, someone correct me if I’m wrong.

That’s the way it is. More reasonable people in Iran don’t feel that way necessarily, and they want to get back again to a normal Iran like it used to be, right, before the Shah of Iran was kicked out. They want to get back to a normal— by the CIA, they want to get back to a normal Iran, where women can, you know, not have to wear mailboxes. And again, that apparently is who Trump is talking to, what he believes is gonna be the new power base. So if that’s true, then this is certainly over, and this 3-week nightmare can be behind us. But again, in the tariff meltdown, In the pandemic meltdown, it was 3 weeks of— 3 to 3 and a half weeks of brutality, and then the lows were in, followed by parabolic moves higher. That, that’s what’s coming here. Because as we said, for throughout all of this, the reason we didn’t sell anything, the reason we’ve been adding to positions, putting new positions on— by the way, love housing.

If you’re with us here at the VRA, you know exactly what I’m talking about. Housing, uh, the, the one that, that we own here, the, the leveraged housing ETF, today was up, um, excuse me, um, 11% today. And again, it’s been battered, right? So, you know, we, we’re still underwater. We just added this like a week and a half ago, two weeks ago. But, you know, if you’ve been with us in housing You know, we’ve had a lot of success in this group. And this group moves, it moves. It’s kinda like small caps. It gets going, it gets red hot, it stays red hot.

And these trends tend to last for housing even longer than small caps. But again, they tend to be pretty much parabolic moves higher. What do we need for that to happen? We need rates to go down. The 10-year this morning, pre-market for the latest from Trump on Iran, was over 4.4%. Well, it’s now 4.33%. So big, big, big move higher in bonds, big move lower in rates. And that’s what housing needs. That’s what the whole economy needs.

$8 trillion in money market, $35 trillion in home equity. It’s a structural bull market, the most powerful kind. And now we’ve got this behind us, hopefully, knock on wood. It’s going to be again seasonality. Remember, we’re still in March, April, and even, even into May. This is the most— one of the most bullish times of the year. So everybody was short, we got to extreme oversold on stairways. We told you that last Thursday and Friday.

This market is ready to turn. So it’s all lining up there, it’s all lining up. I’ll go ahead and give you a freebie here. I shared this with our Parabolic Options folks today. We talked about it in our viewer letter on Friday. Teeing up the next trade. If you want to— if you want to look at an example of a perfect setup on the Vera Investing System, pull up a chart of GDX. This is perfection.

Primary trend: bull market. All right, that’s number one. Got extreme rebond on steroids, and now we’ve seen what happened. That’s all gone and more. Now we pulled all the way back to exactly, exactly the 200-day moving average. It’s an important support line. This is also a line where there’s strong support previously from, from back, you know, several months ago where it traded, uh, in and around the 200-day for a couple of months. So good support at this level.

And each of our VRA momentum oscillators are all hitting extreme oversold on steroids, meaning, well, that’s what we call it when it, that’s as oversold as you can get. That’s it. Doesn’t mean it can’t go down a little more, but we’ve hit our bogey. That means the rubber band is stretched really, really far and it’s ready to pop. And again, we’ve been all over the miners from the birth of this bull market, gold and silver, obviously back to 2003. This has been painful. I’ve just explained a little bit of what’s happened in gold and silver with Jay Powell and rates and of course oil. Oil’s another enemy of the miners because their biggest cost is, of course, energy costs, you know, uh, whatever diesel, whatever they use.

So that’s why this whole group, including the miners, just got shellacked. But again, let me stress this point. I said it on Friday, I’ll say it again here. One of the reasons that we beat the market 19 to 22 years is that we take advantage of these opportunities. This is, this is where you get outsized gains in a small window of time, and this is an opportunity. We certainly didn’t beat the market in 1922 by selling when the market’s at extreme oversold on steroids. That’s, that’s where we are. A little bit different on different indexes.

That’s where we are. Certainly for the gold miners, that’s where we are. And, and now I think we have a decent handle on the playbook of Trump. We certainly see it from a timing point of view. Again, 15 days, 3 weeks, 15 trading days, 3 weeks. So it looks like a great setup. Just got to get this behind us, right? From the beginning we said it’s about 2 things. It’s really about oil and strait of Hormuz.

[00:21:18]:
Got to get both those resolved because if not, it is going to be a little scary. We’ve all seen what’s happening in fertilizer. Uh, the costs have already begun to skyrocket. You know, this could be a real problem for the entire world unless it’s solved in the next— I think I’ve seen basically there’s enough fertilizer in storage, uh, enough still coming to market. That this all needs to get resolved in a couple of months. Well, you know, we’re ahead of schedule there too. So the market’s going to be discounting all of this, looking through again, forward-looking. And, uh, yeah, we’re pounding the table.

By the way, one of the things that held up throughout all of this was our FIFO trade, first in, first out. Todd and I were just talking about this before the podcast. Um, how, how, how well did Bitcoin hold up? Right? $71,000 right now. Remember, on the outbreak of war, Bitcoin, uh, in, uh, like 4 AM trading was at $59,700. That was the low. Well, now it’s $71,000, and it just hasn’t gotten hit again. It’s just held and continued to add. Now, the high post-war has been like $74,000, but I think we’ll surpass that really soon.

It’s— I’m very impressed with Bitcoin and the way it’s held up. Again, first in, first out. First got hit last October along with software stocks, momentum stocks. IGV is one we’ve talked about. It was up almost 2% today. Again, it’s held up. First in, first out. That, that’s another good encouraging kind of a macro sign.

The semis— I’ll share this chart again tomorrow. I shared about once a week in our letter of the semis, S&P 500, because it’s that important. And again, the semis have held that, that, that supporting bullish trend line like clockwork. Like somebody’s watching it, you go, oh, hit the trend line, go crazy, start buying the semis. Because that’s exactly what’s happened since the April 4th low, April 7th lows, uh, tariff mania lows of last year. Semis today up 1.7%. So a good day today all around. All right, what else? All right, covered all the territory I wanted to cover.

Let’s get to it. Good. Again, good internals today. Uh, advanced decline, NYSE 4 to 1. This is essentially, uh, a mirror image, just a reverse of what we saw on the worst day last week. Today was that good, right? Not quite as good, but ballpark for sure. 4 to 1. Advanced decline, NYSE.

NASDAQ better than 3 to 1 positive. Up volume 78.7% NYSE and up volume NASDAQ 74.4%. These are good numbers. We did have about 150 more stocks hit a low than high, but again, that’s a lagging indicator. We’ll see better numbers throughout the week. Again, I think barring some really big negative surprise, which is always possible in time of war, Um, the lows should be in. That’s— we’re investing as if they are. And you’ll— if you’re with us here, you’ll get a— you see more evidence of that tomorrow, right? You always like to get one day under your belt to make sure it holds.

And now we’ve had that today with good internals. Again, sector watch today: all 11 sectors finished high on the day. Very good here. Uh, consumer discretionary up 2.4%, materials up 1.5%, tech up 1.5%. Industrials up 1.2%. Again, not a single sector lower. That’s very good. Commodities— I woke up this morning, gold was down 6%.

[00:25:02]:
Wow, really? We’re gonna do this again? Are you kidding me? But again, that’s forced selling, that’s lack of liquidity. And, uh, you know, that’s— that’s— this is what gold has done for the last 30, 40 years during geopolitical events. When the market gets weak, Gold gets hit, people got to sell something. They’d rather sell something that they own, have profits in. And of course, you know, these Middle Eastern countries have been buying gold hand over fist. Well, now that their oil revenue production income is likely going to be cut off, or at least a time, they got to fill— they got to fill those holes, and they’ve been selling gold. But again, I think that’s short— I think it’s a short-term in nature. A gold said he did rally back Instead of 6%, down 2.5%, $44.92.

Silver at one point this morning was down 8%, finished down 3.4— excuse me, 4.7% at $67.81. Uh, copper, uh, down 3%. No, I’m sorry, that’s a bad— Phil, I know that I saw copper on the day. Apologies. Copper finished up 2% today. And then crude oil, a last trade here at $98.09. Um, low today of 92.48. Uh, so, you know, we got to get— we gotta— we need to get good news to keep coming and for oil to get back in the 80s.

And I— and we traded down in the 80s, did actually— that’s, that’s right, we traded down as low as 87. I know because I saw it. Uh, but, uh, I think we’re going the right direction, and that’s, that’s, that’s, that’s what the markets are going to continue to focus on. Looking through this, this short-term insanity. Finally, again, Bitcoin, $71,912 last trade. All right, folks, that’s it for the day. Hope you had a great day and even better night. We’ll see you back here again tomorrow after the close.