In today’s episode, Kip dives into another action-packed Wednesday in the markets—after a humorous false start where he realized he hadn’t recorded his first attempt. Today’s show explores why Kip believes the week's lows are behind us, with the market showing classic signs of resilience and bullish rotation. From surging smart money activity and corporate earnings growth, to dramatic swings in Bitcoin, gold, and momentum tech stocks, Kip breaks down the data investors need to know. Tune into today's podcast to learn more.

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. Um, interesting day for me. I just recorded, uh, this podcast and then realized that I must have never hit record in the first place. So let’s go through, let’s go through this again. Maybe my first run-through will make me better on this one.

Um, I thought it was a pretty good one, by the way. We’ll go through fairly quickly today. Again, this is an important day, again today, as, as was yesterday, uh, and Monday, because our playbook has been that this market is a buy, that Monday’s lows will be the lows. That is what’s happened. Remember, when bullish buy stocks are by Monday, Monday’s opening lows have been the lows of this week on a closing basis. So it’s not, it’s not kind of gotcha, but That is the fact. Monday’s lows have not been beaten, have not been worsened, if you will, by the closing lows of Tuesday or Wednesday. So that, that has held up.

[00:01:07]:
More importantly, I think the market believes that the, that the lows are in. That’s the way the market’s acting. Again, Monday, Tuesday, now again today, what do we have? We had, we had, we had good smart money hours. That’s a tell. It’s one of the things we look for, right? Uh, it’s just— it’s what’s called the Smart Money Hour. And all 3 days have seen buyers coming in. Um, we’ll cover, uh, the biggest fear now is recession. That’s, that’s what’s out there.

Um, Ed Yardeni, economist that been around a long time, uh, you probably know his name. Maybe you know him. Uh, he’s pretty good. We, we— I, I take his letter, we read his work. You know, he does some very good, like, sector analysis and deep dives on the economy. But on his market forecast, you know, he’s got these percentages, like 20% chance this happens, 30% chance this happens, you know. And so he goes from calling it a melt-up bull market and a roaring 2020s to here comes a recession. And that’s what he said in last night’s letter.

So that’s not happening, and I’ll explain to you why that’s not happening in just a moment. But all it would take— trust me, if you follow Ed Jardini, you know how he flip-flops— all it will take is a strong end of this week in the markets, and he’ll be right back to saying no recession. Like I said, my 50% odds, you know, I don’t take credit. Unfortunately, that’s what he does. That’s one thing Tyler and I try not to do here, and we try, we really try to do this religiously, is to to not hedge, right? We may be wrong, but we’re going to tell you what we think is going to happen because I hate it, right? Like, as I said about Ed Jardini, that really annoys me when people hedge. They can say they’re right regardless. Like, that doesn’t do me any good. I don’t expect anybody to be perfect, but I expect you to tell me what you think is going to happen.

[00:03:05]:
And so that’s what we’ve been saying. That Monday’s lows would be the lows, that we expect a melt-up bull market to kick in again, and we still believe that. Again, I, I think Thursday and Friday are going to be very good. Friday’s always weird because the weekend coming up, but again, we think the rest of this March, rest of March, this quarter, and April— again, two very bullish months— are going to be very strong. A lot of data for you that I’ll share with you in just a moment that backs that up. A lot of fear out there. There’s a lot of fear out there. And we’ve got some good data again that points to that not being the case.

Again, on the recession thing, what we know is that corporate earnings are pretty much going parabolic. As we started the year, analysts believed that we’d see 13% to 15% growth for the full year. That’s now up to 15%. When we started the year, we told you we expected 18 to 20% corporate earnings growth for the year, and we’re not changing that. I think it’ll be higher. Corporate margins are also truly going parabolic. Companies are making a lot of money, right? Companies doing quite well. And so manufacturing— if you follow the trucking, uh, we talk about this from time to time— transportation stocks, transportation index, transportation index is 1.8% away from an all-time high.

The S&P 500, it started this morning, is only 2%, 2.8% away from all-time high. I think a lot of people hear that and be surprised, you know, thinking that the destruction— and it has been, hasn’t it? The disruption’s been pretty bad in software, in momentum, in Bitcoin, in cryptocurrencies. A lot of money in there now. Starting last September, October, we’ve been spending a lot of time with you on this. I’ll go ahead and cover this now. We saw the software stock, the ETF IGV, drop 34% in 4 months. Bitcoin fell 53% in that same time frame. They started going down at the same time.

[00:05:12]:
Momentum stocks hit, right? That’s what these are, momentum stocks. But somehow, what did the market do? Just kept hitting all-time highs. That’s the rotational strength we’ve been talking about. I mean, everyone’s, everyone’s seeing this. That’s why these equal-weight equity indexes keep hitting all-time highs. How amazing in this bull market that the Mag 7— software stocks, momentum stocks, Bitcoin— how amazing is it? Think about this. That these groups have been hit hard in the last 4 months, but somehow the market’s at all-time highs. If you don’t recognize that rotational strength as textbook bull market action, I have to say I don’t think you know what you’re doing.

I’m not trying to be mean-spirited, but if you’re in the business and don’t recognize that— talking to people like Michael Burry— if you don’t recognize What’s that telling you beneath the surface? I’m sorry, but you’re looking at the wrong things. You just are. So now we’re getting the rotation back into those. Again, software stocks— check this out— from the lows of last week, from the exact same day, by the way, software stocks are up 13%. That’s IGV up 13%. Bitcoin— again, these are our two big tails, right? The two first-in-first-out indicators, Bitcoin and software stocks. Bitcoin, from the same lows of last week, is now up 23%. Market hadn’t exactly gone up during that time frame.

That’s a tell. That’s classic first-in-first-out methodology. And it tells you that now we have a rotation coming back into momentum, MACD 7. Software. And yes, Bitcoin and other cryptocurrencies, like our other favorite one which rhymes with— it rhymes with tau. I just, I’m just, I’ll just leave it at that, which we’d like a, a great deal. Bitcoin, uh, tagged, uh, $74,000 today. It’s fallen off a little bit, $73,100 right now, but had— it has had it, you know, it’s had a good run up, uh, over 7% today, and again, up 23% from last week’s lows.

[00:07:27]:
We think that’s an important tell. Iran. Look, we’ve been— we spend time on it because this is one of the times geopolitics really matters. And if you’re not paying attention, if you don’t have your finger on the pulse of this, then I think you’re probably drifting in the wind. Right? I’ve done this entire— what a day, Herridge. Was it Monday? I just realized my microphone wasn’t in front of me. Oh my gosh, what a day. All right, it is now.

Apologies if you had to, you know, put your ear right to your phone or whatever. Goodness gracious. But again, I think if you’re not paying attention to what’s happening with Iran and Israel and the US, then I think you’re probably a little lost here, probably a little concerned. So we pay attention to what matters. And again, Recessionary fears yesterday, we saw it. Uh, gold, silver, uh, equities hit hard at the open, and then the big rally as the VIX was up 32% in one day. Tyler covered this yesterday. In the past, going back 25 years, when the VIX is up 25% or more, uh, over the next— the next day, S&P 500 is up 9/10 of a percent.

Well, we almost there today. S&P 500 today was up 8/10 of a percent. Over the next week, the S&P 500 was up— has been up 2.8%. Again, we saw that yesterday with the VIX up 32% at one point. By the way, it only closed up 5%. Today the VIX got smashed, all right, down, down 10%, all right. So that, that’s, that’s a, that’s a good signal of what’s taking place here. It’s pretty good data., we have to go off of.

[00:09:16]:
But as far as Iran, again, no recession. As far as Iran, the market’s acting like this is over. You hate to say that in times of war because anything can and will happen, but I think the market is starting to see this as being over. That’s our call. Our call for Monday has been that the lows are in, and that is our call. But with Iran, it really is, it’s really all about Trump, is it not? It is. First of all, when you go to war against the US and Israel, you should just be prepared to lose. And Iran is losing.

They’re down to like 20% stocks because whenever they shoot off a missile, that missile launcher is coming under, it’s gonna be gone within minutes. Our radar picks it up. Again, best, best, best guess, of course, obviously best in the world. Our radar picks it up. This is— Iran right now is going through Custer’s Last Stand because once our radar and infrared satellites pick this up, they’re fired within minutes or seconds, all right, based on the thermal plume and trajectory that they came from. And all of a sudden, that launcher is gone. Well, they’ve lost a lot of them. They’ve lost a lot of them.

And again, down to 20% stock. So that’s a big one. You know, you’ve now got the militants, right? The most radical of the IRGC. They’re the last men standing. And this pressure is being brought to bear. New York Times report overnight. When it’s New York Times, you always have a little side-eye look at them because again, it’s New York Times. But they reported a secret offer with the US to negotiate a deal to end the war is taking place with Iran.

[00:11:10]:
So let’s hope that’s true, right? But this, again, this is about Trump. You can question Trump all you want to, but what I know about Trump is, in my lifetime, Trump reads the room better than any politician I’ve ever seen, and he pivots when he has to. And he never apologizes; he just pivots. And I think if we get to a point where this is not going well for us, and look, Republicans may be in support of this, but look, that’s by a slim majority, I believe, and the rest of the country certainly is not. And we didn’t elect Trump to start wars; we elected him to end them. He mentioned “forever wars” yesterday, right? And so, you know, you don’t want to see that kind of language from him. And I don’t think we’re going to, because of all the things I trust Trump on, yeah, I trust him on the economy, but it may be with the military, ’cause he’s earned that trust. And I don’t think this is gonna be a long war.

I think this is days, not weeks, essentially, for the majority we’re talking about before we get into peace talks or whatever. Because I think Trump knows that if this goes on, we’re losing the midterm, he’s losing the midterms. And yeah, we probably are gonna have a recession. If this goes on a long time, Straits of Hormuz gets closed, I don’t know how that, Rand would do that now, but we’d have a recession. You see this news, this is remarkable. For the first time since World War II, a United States submarine has sunk an enemy ship. This was the, It’s called the IRIS-Dena, one of Iran’s prized ships in their navy, which is now essentially nonexistent. But our submarine sunk it again, first time since 1945 that a submarine’s done that.

You imagine the young men on that submarine? And that’s, I mean, if you’re in the business they’re in, that’s a big reason to celebrate. It’s war. It’s military-industrial complex. If you know me, you know I’m against that big time. But I also recognize there are times that we need our military. There’s a time we need to do things like this. If this can end strife in the Middle East, then I think looking back, that will be seen as a good thing. Again, want to end sooner than later.

[00:13:34]:
Don’t want to kill a lot of innocent civilians. You know, it’s hard when you’re attacking a country and killing civilians. It’s kind of hard to then get them to think that you’re a good guy. So, you know, we don’t want this to be Gaza. We want this to end as quickly and humanely as possible. I trust Trump on that. Again, I think he’s earned it. So I think the markets know it.

I think the lows are in. And we’ve got so many fear signals now. You know, we talked to you about the I can’t remember if I said this on this podcast or the last one, but I think I just mentioned it. But it’s, it’s the rotation taking place. Of course I did. Again, that’s, that’s significant. And the other signals we’re seeing— again, I talked about the VIX a minute ago. Also yesterday, uh, investors hedged using puts at a record pace, right? At a record pace, uh, again, using puts on the S&P 500.

It’s called a put delta, and that positioning was the most negative since the Great Financial Crisis of 2008. That means that yesterday’s action— investors bought more puts on the S&P 500 than they did for the 2020 pandemic crash, the 2022 bear market, and the 2025 tariff mania sell-off that ended April 7th. Wall Street’s fearful That’s when we want to be greedy. Also, the median S&P 500 short interest is up to 2.7%. That’s the highest in 10 years. So again, we’re getting signs that real fear is out there. Now, are we ever going to get— are we going to get to extreme fear in these sentiment surveys? And a lot of people are like, well, we haven’t got there yet. Even the Fear and Greed Index is still above 10.

[00:15:22]:
You know, I’ve heard that a couple times. This shouldn’t happen now. We’re at this phase of a bull market. We talked with you a lot about this over the last couple, 3 years. We’re at the phase of the bull market now where the market should get hit, but these sentiment surveys should not react as much. This is just the natural evolution of a bull market. People are getting more bullish. That’s normal.

We’ll get to the point I think at this point it’ll be years from now, frankly, but we’ll get to the point where we get extreme greed in the sentiment surveys, then have a correction, 5% or so, but these surveys won’t be impacted. Investors will remain at extreme greed rating, highly confident in the bull market. Again, we’re a long way from that, but I see what’s happening as normal. I’d be shocked if we get to extreme fear in the sentiment surveys. If you’re waiting for it, I think you’re just not, you’re not, it’s not going to happen. We’re not going to see it. So again, I think this is a very normal-acting bull market, certainly with the reaction we’ve seen to this war from Monday and Tuesday. And again, from our first-in-first-out indicators— software, momentum, Bitcoin— again, these are, these are, these are traditional classic buy signals, and I think it’s extraordinarily bullish.

Okay, let’s take a look under the hood today. Custer’s Last Stand. That’s really what this is, right? That’s where I think Iran is. If you remember, uh, George Armstrong Custer from 1876, that’s kind of what this is. Uh, it ended within 2 hours. It was pretty brutal. Little Bighorn, right? Uh, ended quickly. And I think that’s where we are with Iran.

[00:17:05]:
That’s our read. Uh, I, I hope I’m not wrong because that would mean bad things have happened. Uh, but I, I don’t, I don’t, I don’t think I’ll be wrong in this. I think that’s the right call. Okay, under the hood today, good internals. Uh, NASDAQ 2.3 to 1 positive against decline, NYSE 2 to 1 positive. NASDAQ up volume very strong, 73.1%, NYSE 65.7%. And our, um, oh, and we had about 100 more stocks at 52-week high than 52-week low.

Again, very good readings today. Uh, put-call ratio closed at a 0.86. That’s what you want to see. Our Sector Watch is very good. 8 sectors higher, 3 lower. Energy was down 0.7%, but again, that group has been hot, uh, so that’s kind of understandable. I’m actually surprised it didn’t drop more. I think it probably will.

We like energy stocks versus oil, to be clear. Oil is overbought. Uh, 77 has been the top, uh, both Monday and Tuesday, uh, and today. So I think that— I think oil should go lower. If our, if our theory about the war is correct. Consumer discretionary, uh, today led up 2.2%. That’s people buying things they don’t necessarily need, right? Luxury goods. And that led today.

[00:18:17]:
That’s a bullish sign both for the market and the economy. Technology up 1.3% today. Again, good, good, good internals and good sector watch. Commodity watch— I’ve had people say, are you surprised gold didn’t go up more today, uh, after the slacking it took yesterday? No. I’ll tell you why. Gold has been the leading— gold and silver and the miners have led everything now, right, for a couple of years. Actually going back further, but significantly so for a couple of years. The shakeout yesterday was recession fears.

Also people getting margin calls going, hey, I can sell some gold because I got such a big gain. I can sell some miners, I got such a big gain, right? A GDX miner ETF down 10%. So I’m not surprised it’s not bouncing back more quickly because I think people that sold and raise cash are putting that money to work in these deeply oversold sectors. Again, consumer stocks— consumers, excuse me, software stocks, momentum, Bitcoin, which clearly has bottomed. And I think that’s what’s happening here. But it doesn’t mean the rally in gold is done. I think we’ll just have some backing and filling, right? I would expect the miners to bounce back much more quickly. They lead higher, which is what we want to see.

They normally do. That’s what’s going to happen here. Again, gold today was up just slightly, so last trade today here, uh, $55.50— $51.58, sorry. Silver also up slightly today, $83.78 an ounce. Copper today, $5.90 a pound, essentially flat on the day. Crude oil again up 2% today, last trade now $75.94. And again, Bitcoin, $73.1 as the last trade. All right folks, hope you had a great day, an even better night.

[00:19:52]:
We’ll see you back here tomorrow after the close.