In today's episode, Tyler breaks down a dramatic start to the week following the long Easter weekend. Our major indexes reversed early losses to finish at their highs of the day, another clear signal of a strong, resilient market. Tyler also unpacks the latest headlines driving market moves, including the late-day development that sparked the sixth consecutive Smart Money Hour. Tune in to find out what it means for investors now.

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Tyler Herriage here with you for today’s VRA Investing podcast. Hope you all had a fantastic long Easter weekend out there. What an amazing weekend to be so grateful for. So hope you all had a fantastic one out there. So spend it with friends, spend it with family. However you did it, I hope that it was great.

And certainly not to make light of that in any way, but after a long weekend, after any long weekend, three day weekend, that is because they don’t close the market for more than three days, it’s always good to come back to gains, especially like we saw yesterday. But today might have been even more impressive after we spent most of the session in the the red for our major indexes on the day. Today we finished at the highs of the day, exactly what you want to see from markets. So we’ll cover all of that and much more here today. Let me give you a little quick recap of what we’ll cover here today. Again to our markets great Smart Money Hour. Today we’ll discuss why that happened, what caused it, because there was an event. There’s not always an event in the market that you can say that’s definitively what happened there.

[00:01:30]:
But I think we have a case of that today so we’ll get into it. But it makes now the sixth straight Smart Money Hour rally that we’ve seen. Exactly what you want to see from the market. It’s a great, great technical reading that we’re seeing buyers into the close each day. So again we want to see that continue. And, and it, it kind of is a bit of a tell. We’ll discuss a few tells that we’ve seen from this market in the last couple of weeks today. So you can watch out for them in the future as well and in the coming weeks.

There’s still a lot going on right now. Of course that big news today is a lot going on. The Iran conflict hasn’t ended officially yet, but there was some help today. The breaking news just about 30 minutes or so before the close where if you look at a chart of today’s action, it see a big pop on the screen when this news broke that Pakistan is seeking a two week Iran deadline extension as well as an extension on opening the Straight of Hormuz. So we’ll touch on that a little bit here today. But more importantly, our expertise, the reaction to that news today, as Kip said yesterday, and I’ll recap a few things Kip talked about too. But as he said yesterday, and we say it here often, it’s not the news that matters, is the market’s reaction to that news. When you’re getting good news and the market goes down, it’s not what you want to see.

[00:03:01]:
When you’re getting bad news and the market goes up, that is, you know, a great sign of the strength of that market. And so today, good news is good news. What you really don’t want to see, again, is good news become bad news. So again, we’ll get to that here, more in a minute. Got so many fantastic things to cover today. As always, very grateful to be here with you today. It’ll be my only podcast this week. Got a due diligence trip for the second half of this week coming up here.

So looking forward to getting some great work done for y’ all here for all of our VRA members, we’ll see what, what comes over. This is early stages for this one, so I won’t talk too much about it here today because of how early it is. But yeah, looking forward to it and looking forward to being back here with you already for next week because this is the time to stay locked into this market. So if you have any questions, don’t hold back your emails just because I might be out of the office for a day or two, I’ll have, I’ll have my full system with me there. And being we can’t look away from this market right now, now is the time to be plugged in. So as always, thank you for being here with us today. We’ll cover a lot as I covered at the beginning of this podcast, and we’ll cover our major indexes on the day today. Again, good day here.

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Our internals, the the really the bright spots in the internals that might surprise some people or sectors where we’re seeing both the moves you would expect to the upside and the names you would expect not to be doing so well heading the direction you want them to here. So a lot of moving parts here today, so let’s go ahead and jump right in. I do have one other one. If we have time here today, I’ll jump in to a headline that I saw today. If I get to it, I’ll talk about who it is. But but written by a big name. Many of you might have already seen it, but essentially talking about the world being on the cusp of World War 3. If you haven’t seen it yet, you know, and you’re pretty plugged in to the financial sphere ecosystem, if you will, you’ll you’ll see this piece soon because you’ll see a lot of pieces and big calls from this person too, that don’t tend to pan out quite as he might have expected.

So we’ll get to that here in a minute. But let’s go ahead and jump in to the headlines of the day because for the last few weeks we’ve been saying this is a headline driven sell off in this market, that the fundamental story remains unchanged. We want to see improvement in the employment data. We got some of that on Friday, but we’ve seen federal workers. I gotta go share that chart again. Kip talked about this yesterday. I had it ready just in case I wanted to talk about it. You know, for employment.

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We’re seeing gains in the right places in the private sector where people are, are fetching higher salaries, better opportunities. Not like we saw in the Biden administration, where was all government growth, services and hospitality. And that was really about it. You know, there’s some tech growth in that time, but outside of that, it was government growth and retail services. Not exactly, you know, your high end paying jobs that you want to get, you know, 20, 25 years into your career. These are entry level jobs. And now this is just such a beautiful chart. You know, the fewest federal employees since 1966.

I think some of those, in some terms the lightest federal workforce in living memory, over 100 years here, I believe. So that needs to continue. That’s fantastic. We need less government. I was just talking to somebody on our team earlier today. It’s funny, I didn’t think of this before, but the, the classic Ronald Reagan quote applies to so much today. When you see the waste, fraud and abuse, okay, the. I think it’s the seven scariest words in the English language.

I’m from the government and I’m here to help. So we think that’s absolutely true. And this is a great sign here to get them out of our way. We’ve been saying it for years. So much of what we’ve seen in our economy, we should be light years ahead of where we are. We see it in Europe. We’ve got the perfect case study in Europe. Who has regulated themselves out of being competitive on the global stage? It is what it is.

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That’s the facts of the matter. You don’t want to see it that way. I’d love to have Europe being, you know, the EU as a whole, being serious countries and being able to be our ally in this kind of bipolar world that we’ve seen now where we have the US And China, there’s the only two players. It’s, it’s a sad state, but that is the reality. It’s authoritarian or at least, yeah, some version of authoritarian with China and some version of capitalism, some version of free markets under the US and that’s what we would want to see here. We can improve it as we go, but we need the initial framework to be set. So again, didn’t mean to get too far off topic there, but we’ve said from the beginning this is a headline driven sell off and that we’re one big news story away from another V shaped recovery like we saw in tariff mania, like we saw in 2020 for, from COVID that was stretched a little bit longer. But again, another V shaped recovery example there.

But news came out, another kind of proof, an example if you will, of, of our thesis there. We got a tweet, let’s see here. Roughly 40 minutes before the close. And again if you look at the daily chart, it’s exactly when, just minutes after this tweet came out, we were off to the races, off to the highs of the day and into the close for market. It was from Pakistan’s Prime Minister here again seeking the two week deadline. If you want to check it out, you can check it out on kip’s X account. You know, you can read it quickly here. But essentially urging all parties for a ceasefire.

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Let’s get talks going. There has been again, this is just 40 minutes before the close since I started this podcast. More has probably come out and now, oh my gosh. Okay, you know what, let me wrap here because again, the fundamentals are so strong and it is a headline driven market. But I looked over here to my screens and they’re interviewing exactly the article writer that I was talking about. So again, this though is the proof of the, in the pudding of big news, headline comes out that this is going to cease and we see our markets off to the races, right? Oil prices plummeting from their highs of the day. They hit the, their highest levels since March 9th. Since the beginning of this conflict today they stayed below those highs.

And I’ll get to that here. More in our Commodity Watch. But that’s a scary day, right? So it’s a big day for our market to finish higher. And again, more proof that this has been headline driven, not fundamental driven. So to that point, this is a well known name here. I did go ahead and pull it up earlier. There we go. Okay.

From Ray Dalio. You know, just, you can’t miss when you hear a Big call like this from a big name. I mean, how many followers this guy have? 2 million followers. Right. It’s not exactly a small account here. Okay? The big thing, we’re in a world war that isn’t going to end anytime soon. Now, again, just on the headline, purely alone, Fear, Fear, fear. Be afraid of a world war.

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Be afraid of a world war. You know, he does a decent job of breaking it down that we’ve seen proxy wars turn into hot conflicts. We don’t want to see these combined. We’re starting to see, see alliances form, all of these things. He breaks down the bigger picture of it here and kind of stays away from some of the market calls. But again, it’s the fears. The fear is the fear that you see in the headlines over and over again. That’s why you see the fear and greed index still at extreme fear, despite the fact we’re well off of those lows in some cases that I’ll get to here in a minute.

Well off of the recent lows from peak fear. Right. But we see it time and time again and it’s tough not to call out these people sometimes because I just, I went and just checked back over my notes of previous Ray Dalio calls, you know, just in the last 10 years or so because he’s had some very similar calls to what he made today. So the core thesis of the piece today again is that this conflict will escalate into something else. Right. And that we’re in the Pre World War II or pre World War I era for stocks, which if you remember World War II just coming out on the other side of the Great Depression. A lot of people say it was World War II that got us out of the Great Depression. A lot of people argue it was the New Deal policies.

Most well reasoned economists, and we wrote about this in the Big Bribe as well, would talk about, you know, a return to common sense. After the war, production had boosted gdp, Right? Not naturally, but because of a time of crisis. But what got us out of the Great Depression really didn’t take place until after World War II. If you study when they brought down taxes, they brought back more free market into the system. That’s when the US really had a roaring period. So again, in 2015, before Trump was, you know, put into office, elected and inaugurated, he said that the US was resembling a 1937 again, or even compared it to 2008 levels. Okay. He doubled down on that call when Trump was in office between 2016 and 2018, saying that we’re at the End of a multi decade debt cycle.

Right. No such collapse occurred though, like he was projecting there. Okay. And once again made the same comparisons today. So he needs to get a little bit of new material. Right. And not every situation is a comparison to that much like a lot of people look for weakness in the economy now in the housing market, which is very much a, a, a great place to look for it. But we have a recency bias to 2008 because that was the, the outside of COVID the biggest financial crisis seen in, in the last couple of decades.

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You know, we go back to the dot com blow up as well. So a lot of people look for in housing because we have that recency bias. You think it’s going to be in the same place again. Right. But we always have to look for new comparisons throughout history. So to kind of wrap this up here, I did agree. And Kip as well, we agreed with his calls in 2020 that cash is trash. Great timing on that one.

He said that In January of 2020, just months before, we added 40% to M2 money supply because of COVID Turn the money printers on. Jerome Powell cranked him up to high speed, added by the end of it, at the end of about a year, added 40% to our money supply. Basically a year and a half from when Ray Dalio said that good call. We echoed it in the Big Bribe. We still echo it today. You need to own assets. Even if inflation isn’t coming back, your dollar is going to be worth less because the money printer is still on. But it was during some of the most recent ones is why I really wanted to talk about this today.

Because during 2022, the inflation scare, right, the Biden Bear market that we went, the brutal Biden bear market that we went through, that’s when Kip and I started writing and researching the Big Bribe. We published it, I believe, in August or early September of that year. Right around the same time Ray Dalio said that we were headed for a perfect storm. Again, inflation had peaked in about July. So we’re in October now when Dalio said this, that we’re headed for a perfect storm, that inflation was going to come back and even worse, the economy is going to tank and even worse. And the very specific warning that he gave it was October 11th. So specifically at Greenwich Economic Forum in Connecticut, again, months after inflation had topped in just two days before the October 13th bear market lows that we called to the day. One more chart here.

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I, I, well, I’ll get to that in just a second. Again, we published the Big Bribe just two months before Ray Dalio made those comments, just two months before the bottom took place. Really, it was too bad Ray Dalio didn’t read our book because maybe he would have avoided that call and seen some different angles that we approached it from. And we approached it from many different angles in writing that book. But for anyone listening today, I think the key take home point is to not be scared out of this market by headlines. That’s first and foremost. But if you’re feeling like you’ve missed out on this, move higher. It’s been a good move higher.

You know, the Nasdaq is up 120% from the bear market lows that Ray Dalio missed there. Okay, so it has been an incredible run. We’ve compared this to the dot com era. Okay, I got one more chart here for you where the Nasdaq rallied over a five year period, 580% with multiple pullbacks of 10% or more along the way. All of them incredible buying opportunities. Okay, so when you think about this today, if that was 2022 to 2026, you could say we’re four years into this. You could kind of say maybe that’s the biggest, you know, blow off top that we’re looking for to be a part of. We don’t want to miss that.

We don’t think we’re there. We think we’re probably closer to this this range. Early innings of the.com era again, 580% rally to today’s 120. We have a long way to go. So if you’re not in yet, you know, I would heed you to take caution who you listen to. If it’s people like Ray Dalio who scare you out of the market, come and join us here at the vra. We want to get you in this market. We beat the market year in and year out.

We just did 37% returns, beat all the major indexes. Last year we beaten the market in 19 out of 22 years. And you can do it all for no risk to you at all for 14 days@vletter.com we hope you’ll come and join us. Also sign up for our podcast as well. Every day at the market Close delivered right to your inbox there@vletter.com. all right, I’ll keep it. I’m going start to wrap up here a little bit. I might come back to that rate.

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I was a little worked up for that Ray Dalio story earlier today. I wasn’t sure if I Was going to talk about it, but again, not to beat a dead horse here and. And no more Ray Dalio talk. But that’s the key. Take home point. We’re looking for this move to be bigger and last longer than the dot com era. So you’ve still got time to act. And we look at this right now is a fantastic opportunity.

Very likely the lows from last Monday will remain the lows in our view, especially if we do get a resolution to this conflict coming up here and days like today that only confirm the that for us. Because if nothing, this is pure market resilience that we saw today. Kip talked about this yesterday on the podcast that despite the headlines, despite the negativity, our markets managed to climb and climb and finish higher in a good smart money hour. That means that people are buying with conviction into the close. The same is true for today. We were in the red all day today, but our markets hung in there. Right? Today could have been ugly again. Oil hitting that high just below its recent 52 week high at $119 a barrel.

I’ll get to that more in a second. But to stay around and to not fall off a cliff and then to rally back and finish at the highs, resilience is the name of the game for today for sure. All right, so for our major indexes here, we almost finish higher across the board. Not quite. The Dow Jones to did finish negative. So we’ll start with the bad news first and we’ll get to the good news because it’s coming up quick at midday today the Dow Jones was leading the way lower. Okay, but looking for those market tells just quickly around the market, check the transports. Dow theory, right.

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The transports are leading. The Dow is going to follow vice versa. Also true. Well today the transports, not only were they not negative with the dowels, all of our indexes in the red, the Dow at the lows of the day, the Transports were up 8/10 of 1% still and finished the day up 1 1/4%. I mean I didn’t have to drop this chart here just to show you, you know, obviously the pullback hurts, but that’s what most of our major indexes look like right there. Most of our major indexes aren’t close to this level of all time highs roughly. I mean a little over three and a half, three and a half or so percent away from an all time high there in transports. Again, textbook kind of bull market action that you want to see on the recovery side here.

These are the tells you’re looking for that the economy is strong, that the fundamentals are strong and again that this has been a headline driven sell off that tells you trucking’s doing well. Shipping so many different areas, manufacturing so many different areas bodes well for the US Economy. And again, exactly what you want to see on the on a day where the Dow was our only major index to finish lower. All right, next up here, where to go. We had the S&P 500 up just, just barely positive on the day to day up less than 1/10 of 1%. The Nasdaq up exactly 1/10 of 1% but was down 7/10 of 1% earlier in the day. But similar to the transports, the semis were holding up well about even at the lows of the day, down about 1/10 of 1%. So it was negative.

It wasn’t green all day like the transports, but semis LED tech, exactly what you want to see here, up one full percent on the day to day. Great to see from the semis and actually let me get a quick zoom in here for myself. Finished today above all of its major moving averages. That’s, that’s very good to see. The semis didn’t even really get close, as close as our major indexes to dipping below their 200 day moving average, which they did. The semis are still above that level and never really got that close. Exactly. Again, what you want to see from this market finally here small caps led the way today technically up just under 210 of 1%.

[00:22:22]:
Also another good factor to see on a day like today were yields were higher as well. Russell 2000 is the most sensitive group to yield. So another kind of tell from the market that this move is overdone. And we’ll look for as we’ve said from the beginning, this is a counter trend move. The defensive names have rallied, our markets have sold off. Counter trend move. Now we resume trend which is a bull market. All right, I believe that’s it for our major indexes on the day today for our internals on the day.

Of course you always want to see great numbers but for a day like today again we were in the red for so much of the session. We’ll take this as a win. We were slightly negative. Advanced decline for both the NYSE and the nasdaq but close enough on a day like today I’ll call it even. I’ll say that today kind of like a gimme putt in golf as a gimme 52 week highs lows came in even on the NYSE slightly negative on the Nasdaq about what you would expect though then volume did come in negative on the nyse. But big, big upside volume here in the NASDAQ over 2 to 1 positive on the day. Again, conviction here today. Looking at our sectors here.

Let me pull up one more screen. Well, quickly, one more here on sentiment. We opened the day with a put call ratio at 1.14. I’m gonna go ahead and share this one real quick because this is one of the higher ones. It didn’t stay there all day, but that is one of the higher readings that we’ve seen recently. So I do want to have some evidence of talking about it here. So we’ll look at the total just quickly here on the day. Again, a 0.7.

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Anything above a 0.7 is seen as bearish. Above a 1 seen as excessive bearishness, a 1.14. You’ll finish the day at a 0.94. But that’s interesting there something that I will definitely take note of. All right, to our sectors on the day. Today we finished with 6 out of our 11s P500 sectors higher on the day to day led by communication services. Again, kind of a proxy for tech. We do talk about that here pretty often.

So good to see. Followed by energy then tech and utilities are laggards on the day were purely defensive, really. Consumer staples, materials and industrials on the not quite as defensive side. Consumer discretionary was lower on the day as well. One more counter trend move that we’re seeing here on a day where we’re seeing potential increase in conflict, where Trump just raised the defense budget 200 billion, what, a couple weeks ago, last week or so to one and a half trillion dollars a year. You’d expect defense names to be heading higher, right. And leading the way. They were that stopped though, that they peaked.

It looks like they’ve peaked here and have not rallied the same level that our markets have from the lows again, finishing down on the day. When you’re seeing a sell off like this on the bad days you want to see what holds up the best and then on the good days you want to see what’s leading. And that hasn’t been the case here for the defensive sector as a whole. Again, we think another tell for us here. Any more charts on the day? I think that about covers it, but if I come back to any, I’ll let you know. Well, one more here quickly. The semi chart again, textbook right off the lows here. Fantastic to see.

[00:26:00]:
We share this one all the time. So I won’t spend too much time on it here today. Finally, though, because I’m sure you want to hear about oil, our VRA commodity watch. We’ll start with gold. Having a good day day last trade, $4,755 an ounce. A whole lot of gold miners are liking that right now especially. I mean, it’s evident in the market action. Gold miners did lead the way today.

Silver now last trade, $73.79 an ounce. Copper $5.63 a pound. And oil did hit a high today of $117 a barrel. I will go ahead and share one last chart here for you. For oil again, there’s the peak roughly March 9, 119.48 today at the highs, 117.63. So very good to see it finish lower first and foremost. But second of all for our markets to be able to finish higher. Remember where our markets were at about this time, Right.

Just a few weeks ago, it was bad and getting worse. So this is the kind of double top you’d like to see in this group. We want to see it continue moving lower from here. We do expect that to be the case. And what’s so interesting here, I’m going to pull this up one more time. What’s so interesting here is that just a week ago, right, with oil below $100 a barrel, okay, maybe two weeks ago. It was two weeks ago, $100 a barrel futures contracts for the year. We’ve been talking about this a lot still.

We’re at $70 a barrel by December. Okay. By last week that had moved up to November and then October. Today, despite oil hitting its highest level since the worst of this, futures contracts are now at $70 a barrel all the way by September. It’s almost unreal. The level of backwardation here is absolutely. There’s no other word to call it than insane that this is crazy. This is similar levels of financial engineering that we saw during COVID when oil went negative.

[00:28:10]:
Right. So we’re seeing it to the reverse side now. This is not really, I don’t think, what you’re seeing in the real world where it’s really changing hands at the, at some of these levels today, just like it didn’t exchange hands at a negative price during COVID Well, that will remain to be seen. But again, even with oil prices today at these levels closed based off of Today’s closing at 110 a barrel again, the December contract just two weeks ago below $100 a barrel was at roughly 78 $79 a barrel was right on the cusp of 80. Now December’s down to like 7350 in September or so. I think I said December is down to like 7350. September is the one now down to about $79 a barrel. So again, that’s the market telling us that it expects oil prices to come down and quickly once this is behind us.

Finally here for today, cryptocurrencies, bitcoin also rallying here. Another one kind of our FIFO names here. Back above $70,000 of Bitcoin at $70,362 a Bitcoin. We want to see that move continue as well, folks. That’s all that we have time for here today. Please be sure to subscribe to receive our podcasts 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. Have a great week, everyone. I’ll see you back here next week, most likely next Tuesday for the Close. Have a great one, everyone.