In today's episode, Kip breaks down a rocky week in the markets, spotlighting the surprising fact that in spite of heightened volatility and the backdrop of war the S&P 500 closed down just 2%. Kip digs into the main forces driving investor sentiment: the impact of surging oil prices, geopolitical tensions centered on Iran, and what he calls the “4D chess” of Trump’s strategies on energy and the Middle East. You’ll get his take on why negativity dominated the headlines, the role of the Strait of Hormuz in global energy markets, and how all eyes are on oil as the primary driver of this market pullback. Kip also examines the unusual behavior of interest rates in times of conflict, analyzes the technicals and market internals, and shares his high-confidence outlook for what could spark the next major move higher. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Friday afternoon, everyone. Kip Herriage here with the Daily VRA Investing Podcast. Hope you had a good day. Hope your week was okay. It was a rocky week this week. Uh, just to start this though, let me just say, if you didn’t already know this, would this surprise you? From Friday’s close to today’s close, so this week of war, right, uh, the last 5 days, right, of trading. Would it surprise you to find out that the S&P 500, the world’s largest and most important equity index, was down just 2%? And that’s 2% exactly.

It’s not 2.9. It’s not— it’s exactly 2%. Again, I ran the numbers. Frankly, it surprised me. Uh, it feels like this week was worse. It just— I guess it’s because we’re overwhelmed by negativity, you know. And, uh, how could we not be, right? Um, I’m going to cover a few important things today. The jobs report we got this morning, uh, talk about oil.

[00:01:03]:
This war is about two things, in my opinion, right? It’s about two things. It’s about oil and Trump. Iran’s third, and I’ll walk you through why I believe that. I’m gonna go and make this point now, just get it out of the way. Whenever I talk about Israel, you know, um, the famous quote that we hear all the time, America is Israel’s bitch, right? Who hasn’t heard that? All right, I tell you that, uh, Israel has lost— Israel has lost the younger generations. There’s just no question about it. All the data shows it. Anyone you talk to, they, they will tell you that of a certain age It’s us.

It’s a 50-year-old plus, right, that still has Israel’s back. But I don’t know how you change that. And what’s happening right now with Iran probably won’t help that. I do support this war. I do think that Iran has been a blight on the world stage. And I really want to talk about that. Here’s what I want to talk about. If America and if Trump are really Israel’s bitch, then surely there must be something in this for the president.

What might that be? How about he’d be assured, if that’s the conspiracy theory that you believe, he would go into this saying, I’ll do that, you know, quid pro quo, I’ll do that if you can guarantee me that the Save America Act will pass, meaning Republicans will win the midterms. Because if you paid attention to this, and I know all of you have, I don’t think there’s an election in the last decade that Republicans have lost legitimately. Now we all know 2020 was rigged. That just, that there is just no doubt about that. And again, for those that are new, welcome. Great having you here. I am not a hardcore Republican. I’m a lifelong independent.

[00:03:08]:
Right? I’m a conservative and I haven’t voted for a Democrat in a very long time. Why would you? It’s the party of insanity. They’re just off the rails. They need more John Fettermans, you know, and maybe that change is coming. I think that’d be great for this country. We need a healthy two-party system. But if you buy into the conspiracy theory, back to that, There has to be something in it for Trump. Maybe the question then becomes, if that’s true, right, would it be worth it? Well, I think if we can clean up the, the Mideast mess— I believe that it’s safe to say Israel is now everyone’s enemy, most everyone’s enemy in that region.

So if we can have peace in the Middle East And, you know, a brand new looking Iran, Venezuela has been taken care of. Cuba apparently is going to be next. I don’t think that’s going to be, you know, the challenge. I think it’ll be more like, it’ll be easier than Venezuela was, in my opinion. Well, I think that we could look back on this, you know, assuming things don’t get worse with Iran. I think we look back on this and say, you know what? Trump just pulled— that is 4D chess, what he just did. Hard to see that in this moment because, you know, again, oil— excuse me, wars are never something you want to have to go through. I mean, turn your TV on, it’s just, you know, destruction, right? I mean, Iran’s looking a little bit like Gaza, and I don’t know many people They like the way that came out.

So I don’t think that’s going to happen. I continue to believe, and I pay attention to this stuff. I think that’s why you’re here. I’ve developed pretty good instincts over my time of doing this 40 years, day in, day out. How could you not? I get big calls right, and I have since 9/11. 9/11 taught me how to think differently. It made me more cynical because that’s how you have to be with these neocon military-industrial complex heathens. And you know, you have to question everything.

[00:05:33]:
And I can go through a litany of things that, calls I’ve gotten right because I do now have that thought process. Again, I know a lot of you do as well. So something good did come out of 9/11, right? That’s what it is. It taught us how to think differently. That’s why we didn’t get fooled by the pandemic. You know, for those that are new here, Todd and I, beginning in about late March of 2000, very publicly started questioning everything we were hearing. You know, when I first read the Rockefeller Foundation’s document from 2010, lockstep. It read just like the playbook we were living through.

It raised a lot of questions, started paying close attention again, like you did. But back to Iran, I do continue to believe this is short-lived. This is going to be short-lived. I don’t know how you can take on the power of Israel and the United States, not necessarily in that order, but Israel is closer to the action. I don’t know how you can take on these two military superpowers and win. I think the only question is how long does it go on? And I continue to believe we’re looking at something that’s going to be mostly over, meaning the Strait of Hormuz is open, a lot of this bombing stops, peace talks, negotiations, what have you. Could be wrong. Iran certainly doesn’t show any signs of wanting to give up.

However, if you’ve seen the data, you know, their missile launches are down 90% from the first day of the war, 350 to, I think there were 20 yesterday, apparently fewer today. They’re doing the damage with drones. And I think that’s going to be handled. But those have caused a lot of havoc and a lot of danger. But again, we have technology to deal with that. Apparently, they’re down like 87% and missile strikes are down 90%. And that’s again, because we’re taking out their launchers. But as I said at the beginning, this is about two things.

[00:07:49]:
It’s about oil and Trump. Here’s what I mean by that. I have confidence in Trump’s ability when it comes to the military. I think he’s earned that. I believe it. I think it’s unquestionable that he’s earned that. You don’t have to like it, but we haven’t gotten into new wars. I don’t believe this is going to be one.

He’s adamantly opposed to this. I believe nothing’s changed there, but they want to clean— they want to— he wants to deal with Iran and get it off his table, get it off completely off the table. And so the last 3 years of his presidency, can focus almost entirely on the U.S. economy and helping the average American. And I believe that’s true. Again, I think he’s earned that. The reason the market’s going down— and hear me on this, this is a very high confidence call— the reason the market’s going down is because of oil. Oil hit a high at $92.53 today, up at 1 point over 8%.

Excuse me, over 12%. Last trade, 91.39. So just right there. And that’s what this is about. It is about the Strait of Hormuz. But you probably know, like I do— I’ll just go through some of the data— 20% of the world’s oil flows through the Strait of Hormuz. Now, it’s not militarily closed, it’s not officially closed, but for all intents and purposes, it is because These companies don’t want to get shot at and bombed and firebombed. It’s a functional shutdown.

[00:09:24]:
It’s not a complete physical blocked closure. This has happened before. And this probably isn’t as bad as some of those. There are some ships going through. A ship went through today, an 80-meter ship full of petroleum. Went through today. We got announced today, as you may have heard, a $20 billion maritime reinsurance fund sponsored by the United States, meaning taxpayers, was announced today. How long it takes to put that in place and get companies— not everyone will qualify for it, you know, only our A-list, right, approved ships that go through will be approved for that.

And action continues to move towards having Navy, you know, the Navy go through and protect these vessels going through. Again, these, these, all these things take time. But the second, Larry Kudlow was on Fox today, and I like Kudlow. He’s an optimist. I think when it comes to the economy and investments, he’s generally speaking, spot on. And I agree with what he said today because it’s my view as well. Oil prices are going to plummet when chips start going through the Strait of Hormuz. They’ll be back in the $70s quickly.

Again, last trade now, $91.39. There’s a lot of fearmongers out there, a lot of people— by the way, these are the same people that are almost always wrong, okay? Right, but, but this is when they shine, right? This is when that siphon of negativity is its most powerful, and you can’t, you can’t miss it because it’s everywhere. And all of a sudden everyone sounds like an oil expert. It’s saying oil’s going to $150. You know, you’re talking about the zero-hedges of the world. Uh, today Goldman Sachs said they believe, they believe that oil is going to $100 next week, and they may be right, I don’t know. But 20% of the world’s oil goes through the Strait of Hormuz. The US relies on almost none of that, right? We’re talking, these are supplies that are meant for Asia, meaning China.

[00:11:42]:
So again, is this another 4D chess move from Trump shutting off both Venezuela and Chinese and Iranian oil for China? Again, that may very well be the case. But once oil prices are down, and if you have the same confidence that I do— that’s what this is about. It really is about your level of confidence in Donald J. Trump. I don’t believe I’ve seen anyone that hates Trump that’s in favor of what’s happening now. And these are the same people, by the way, that are putting the most negative stories out there about the end results of this war, where oil’s going. Again, it’s everywhere. So if you— you’re bombarded with it.

These are the kind of things you see near a bottom. I’m going to talk about that more in just a moment. Got some good data for you from Tom McClellan put out today. But the last time oil was here— and I put this chart this morning— this morning when I put it out in our letter, oil was— what was it— $86, $87. Again, down $90, almost $91.— or just over $91. You don’t have to go all that far back to find the last time oil was $91 a barrel. It was in Joe Biden’s last, last year of his, of his, of his term, right? At very end of 2023 is the last time oil was here. So that in and of itself, that’s not the problem, not the price.

It’s the velocity of the move. I think we all recognize that, that it’s the velocity of the move. You have to know that Trump and Israel, they know this is one of the most important things, is to get the Strait of Hormuz opened up again and to get ships going through it. Because I’m just telling you again, when ships start going through there, some might even be attacked, right? But when they start going through, and again, one did today, The markets are going to reverse on a dime. That remains our call. Uh, we’ve not sold any positions. We’ve added two positions this week because that’s the out— that’s the, that’s the, uh, the end game that we see taking place here. So I think if you have— if you believe Trump is reliable and he knows what he’s doing with respect to war, and you think oil prices are going to go— there’s no way you’d be short this market.

[00:14:10]:
There’s no way you’d be selling positions if you think that. Those are the two things that I, I think are going to happen. Again, it’s a high confidence call. My wish, and this is actually kind of what I think is going to happen, I think this weekend, I think something’s going to happen this weekend because again, Trump’s point of view, midterms, he doesn’t want this to be a long long drawn-out deal. This is why their attacks have been so vicious. They want to end this ASAP. We know that they’ve had talks, you know, somehow they’re speaking. There was apparently an offer made.

Israel— I mean, Iran said, hey, we’ll negotiate with you on these points. There’s got to be some backchanneling going on, right? I don’t think it would take much good news over the weekend, say like Sunday night. This is what Trump likes to do, by the way. Trump has a habit— it’s been a little while since you’ve done it— but in times of stress in the markets, because he pays, as we all know, remarkably close attention to the market— he loves to brag about it, does he not? Back in the pandemic days, he’d love to put out news on a Sunday night to have the markets just rocket higher on Monday. And then again, this is what he would— he comes out at the close and takes credit for it, right? I mean, that, that’s who the man is. And I think at that point, all these people buying puts— and it’s a big number. Today was the first day that we’ve seen, um, not only over the last week but in the last couple of months, that the put-call ratio stayed above a 0.90 for the entire day. Every trade was above 0.90.

That’s elevated. You know, above 1 is hyper elevated, right? Sometimes we see 1.1, 1.2. That’s a big buy signal. We’re not quite there yet, but we do have a record number of people buying puts on the S&P 500. That, that’s a, that’s a total dollar amount, so you have to take that a little bit with a grain of salt. The markets have grown so much. But this is the first day we’ve seen in quite some time that the put-call ratio has been above a 0.90 for the entire day, close to the 0.97, by the way. At the highs of the day.

[00:16:24]:
Again, Fridays are weird, right? This is why my mentor Ted Parsons taught me— seriously, I think it was 38 years ago, uh, people were asking me, when did he first tell you that? It was about 38 years ago, if memory serves, that my first mentor Ted Parsons taught me to don’t buy on a Friday and never, ever, ever, ever sell on a Monday. Well, that actually— that selling on Monday might have worked pretty well this week, although we’re just off— we’re just off Monday’s lows., and the S&P 500 and NASDAQ. So we may have violated— I have to run those numbers again— we may have violated the lows a little bit, but not by much. Again, S&P 500’s up 2, down 2% this week. You know, Monday had the good— we actually had a good reversal every day this week except for today. Monday, Tuesday, Wednesday, Thursday, all saw strong smart money hours. This is what we look for because that, you know, the, the amateurs trade the open and the professionals trade the close. That’s, that’s always kind of been an adage, uh, of why this final hour of trading is so important.

We didn’t see that today, and again, it’s because it’s Friday. What could happen over the weekend, right? I do think we’re set up for, for a hell of a move higher, and, uh, I think at that point the lows— I still think effectively the lows are in, right? Our first in, first out trades of IGV, the software ETF, it was up again today. IGV was up again today. Final close here, a trade up. It was down part of the day, but IGV closed up 0.3% today. Now Bitcoin was down. That’s the other— that’s our other half of our first-in-first-out trade. Bitcoin was down today, um, but Bitcoin’s still up 15% from last week’s lows.

IGV is up now 14— they’re 14-15, uh, gains. And again, they were the first to go down last October, November. And as of last week, they were the first to start going higher. That’s a— I think it’s a really important point. That’s why we’ve been spending time on it. I didn’t like the fact today that the semis closed down 3.7%. I mean, they’ve led higher from the April 7th tariff mini lows. They’ve led higher consistently.

[00:18:40]:
I don’t like seeing this. Uh, we don’t want to see that continue, but they’ve been holding up pretty well. I think this is a little bit of a, hey, I’ve got gains in this, I can sell it, right? And I think that was happening here. But if, if they, if they continue to go down next Monday, then that’s the market telling us we have a problem. Monday, Tuesday. So we’ll be watching that closely. I do not expect that to happen. Kudlow also said, but he said the oil prices are going to plummet, and he made the point that the world is awash in oil.

And that really is the case, right? That, that really is the case. This is about short-term velocity of the move, and all it’s going to take again is the Strait of Hormuz. That’s all. I said it may sound like a big ask, that’s all it’s going to take. But, um, that is it. I have to believe that Trump and Netanyahu are focused on this. And again, I would, I would expect something over the weekend. Uh, we didn’t really see it today in the final hour of trading, but you know, this would be something they keep very close to the vest, uh, because that, you know, we’re looking at, you know, we’re looking at a 1,000-point gain at the open on Monday if this happens over the weekend.

We get good news, you know, talks are moving forward, hostilities have, have, have slowed down, there’s positive signs the Strait of Hormuz is going to open. We’re looking at a 1,000-point gain on Monday. Now, the, the converse of that is we have more bad news over the weekend without any kind of resolution to, uh, getting chips going again. You know, Monday, Monday could be a lower open. I think we— I don’t think— I know we’d be buying that open. Here’s why. Tom McClellan, his father, uh, invented something called the McClellan Oscillator. I know a lot of you, a lot of you track this.

[00:20:27]:
Tom put out a chart this afternoon— excuse me, this morning. Um, the NYSE McClellan Advanced Decline Oscillator is now officially way the heck down here. That’s, that’s Tom’s way of speaking. And he shared the chart, and it’s a reliable signal, right? It’s a reliable signal. Not necessarily a bottom signal, but a reliable signal that we are way too oversold. This is when big bounces take place. And so, um, you know, again, that— I think that that goes pretty well with what we’ve seen elsewhere, a lot of the sentiment data. And, um, again, people that are buying puts and short selling, that kind of thing.

And again, I think it’s the— I honestly, I think it’s the Trump hatred. I do. And that’s New York. That’s most of New York, right? That’s most of the— if you watch any Bloomberg, by the way, as you know, if you’ve been here a while, I haven’t watched CNBC since the pandemic, since about April of 2020. I’ve not one time— I’ve been traveling and the hotel I’m staying in doesn’t have Bloomberg. I refuse to turn it on. I refuse to turn on the TV. I literally tell you, I have not watched a single second of CNBC.

And until they apologize and fire Jim Cramer, you know, I won’t. How’s this guy still on here? You know, he is the wrong way. I don’t like the fact that yesterday Cramer said he thought this was going to be short-term. I saw that on Twitter, X. So I didn’t like seeing that. I mean, he is right sometimes, you know. But Bloomberg has become unwatchable. It is get Trump.

[00:22:14]:
It is just get Trump. Well, on that topic, let’s talk about get Trump with the interest rate situation. Okay, look, I’ve been talking about— I hear nobody else talking about this. And again, maybe they do. I don’t watch a lot of media, but I haven’t seen it anywhere on X, and I do a lot of research there. What is going on with interest rates? I mean, seriously, how are rates going up? Now, the 10-year yield today did close down to 4.133, right? The, uh, the high today was 4.19, so it was down a bit today. But I spent some time on this last night because my memory was that in times of war, rates always went down. I could not think of a single time that they had not gone down, certainly not up.

They’ve been going— the low was actually below 3.9% on Friday, you know, and we talked about that then. And now they’re going up fairly sharply in a time of war. So I did the research last night, all these AI programs, and, you know, checked online. I want to make sure I got this right. And not a single time did I find— I did it post-World War II just because I want to say, you know, modern era. But as someone reminded me, rates didn’t go up in World War II either, right? They didn’t, you know, control and manipulate them like that, like they do now. But the Federal Reserve, we know the power they have. History tells us that in every case, the 10-year yield— and everything follows the 10-year— the 10-year yield goes down in times of war.

Why is it going up now? Now, I got some pushback online. People are like, you know what, stop talking about wanting the Federal Reserve to control things. Don’t you know the damage they’ve done? This is not that conversation. I’m not, I’m not saying I want quantitative easing to start. This is extremely short-term, uh, uh, the flooding of the banking system with liquidity. That’s what this is. The Fed uses open market operations. It happens all the time.

[00:24:36]:
Again, not talking about QE, not talking about the Fed taking on another trillion dollars in debt, just short-term. This sends a strong signal in the past, hey, you know what, we may be at war, But rates are going down. There’s something good, and it means the bond market is functioning as it’s supposed to. But it’s not now. You know, I noticed this on Monday. That’s the only thing about Monday’s rally off the lows that did not make sense. We covered it then, and now we’re seeing— we saw it this entire week except for today. We got the jobs data, of course, was not great.

Uh, estimated gains of 55,000, we got a loss of 92,000. We don’t pay much attention at all to month-to-month reports because I don’t trust the BLS. I don’t trust it on either side. You know, I trust what we’re seeing in the economy. Manufacturing is coming back. We know the economy is strong. We have the whole thing with natives versus foreign-born. You know, that’s messy.

This report, by the way, is also messy because it happened during the bad blizzards and snow and weather. We had, right? I’ll be very surprised if next month’s jobs data is poor. I would expect a very good one. But with all that, rates should be going lower. Again, this has to be get Trump. Midterms coming up. I mean, we know Jay Powell hates Trump. Again, it’s never happened before, at least in modern times.

[00:26:10]:
And people should be talking about this, and they’re not. And that’s something, if you’re Trump invested, you have to be livid. I’m surprised that they haven’t made it public as public as Trump has been with his dislike or hatred of Jay Powell. I’m really surprised that hasn’t become public. Maybe they’re doing this behind closed doors. But Bessett should be all over this. I expect that he’s going to be. You know, Bessett also last night in a piece from Reuters, it named anonymous sources, but it quoted Bessett as saying that he was going to short the energy market, meaning force oil prices down.

He didn’t do it today, clearly. I say bravo. This sounds like something, exactly like something Bessett would do from his history of working with George Soros. You know, he knows the methodology on how to do this. And again, maybe it’s sending a signal to Powell and team that, you know, what are you doing? If you can’t handle this, we will. And again, getting oil prices down, again, that is the key. All right, what else today? All right, I think that’s, uh, most everything I wanted to cover today. Let’s take a look under the hood.

The internals today were not good, uh, not horrible, not good. NYSE, uh, 3.5 to 1, uh, advanced decline negative. Um, 2.4 to 1 negative for NASDAQ. Um, NASDAQ down volume was only 62.4%. I mean, that’s That’s a, that’s a very modest reading. NYC was a bit elevated at 71.3%, and we had 120 more stocks hitting a 52-week low than a 52-week high. Again, these are not, these are not worrying signals by any, by any stretch. Sector watch was not good.

[00:28:16]:
Uh, 11 sectors— let me get this right, excuse me— 9 sectors lower 2 sectors higher. Consumer discretionary down, as you would expect, 2%. Materials down 1.9%, oil prices, uh, technology down 1.8%. To the upside, energy, again, big gain in oil. While we’re— energy stocks only up 0.1%, right? Consumer staples up 0.3%. I think the other story today is what’s happening in precious metals and miners. Gold was up $102 an ounce, $5,183. That’s 2%.

Silver up 3%, that’s up, uh, $2.50 an ounce at $84.69. One of the rules of thumb about a market that you should be troubled about and worried about is the liquidity trades. And, and gold silver lesser because, you know, again, it’s industrial metal. But gold, if gold is going down sharply, I’m always concerned about that. That’s a liquidity trade. That means people are selling it because they think things are going to get really bad. They’ve got gains in gold, let’s go ahead and take those, because they think liquidity is going to be drained from the system. That, that’s what that trade means.

And I never like seeing gold down big. Well, we’re not seeing that. You know, again, it’s been— we’ve had a bad day this week, but gold bottomed quickly. Looks great on the charts, by the way, as does silver. The miners today, again, they’re an equity, so it’s tough to get a good read on— it’s not a liquidity trade read on the miners. GDX was down 0.4%. GDXJ, the junior miners, down 0.5%. Again, these aren’t big losses, but that’s why they weren’t up.

[00:30:04]:
Right? Because again, they are stocks, they are equities, and they’re caught up in the downdraft. But I think it’s a very, for me, a comforting sign to see gold going up at a time like this, especially with oil where it is. There’s a lot of, a lot of talk out there about credit crisis. I don’t see it. I see the news, I see the same people that want us to think it’s a big deal, but the funds that are having trouble are like they have $5, $10, $20 billion in assets in these funds. These are very specialized, targeted funds that attract primarily institutional money. In other words, these guys just screwed up, right? They ran it probably on, I don’t really know, I have a pretty good idea, they ran it on leverage. When you run something on leverage to a high degree, we’re talking about a lot of leverage here, bad things happen when things go against you.

So I just don’t see that as being good. We don’t wanna see it build, You know, but is this the beginning of 2007, 2008? I’m not seeing any signs of that. We have, again, an ocean of liquidity. These funds start getting in trouble, someone, right, that has all this cash is going to come, and that’s, that’s all of corporate America is going to come to the rescue. And I’m sure they are now. They just, you know, they want to get, uh, bottom, uh, bottom, bottom of the barrel purchase price. So again, that’s not something we’re concerned with. It’s all about oil.

It’s about Trump being right about this, and of course, uh, dealing with Iran and getting this thing over, or mostly over, as soon as possible, which again, I think it’s going to happen. Um, again, oil, oil today, last trade $91.27, up 10% of the day. And finally, Bitcoin, um, last trade here $68,900. Again, that’s down on the day. The low was, uh, $68,200, so just off the lows. But as I’ll repeat, Bitcoin is up from last week’s lows of 15%. And again, it’s Friday, you know, Fridays are always weird. That’s why we don’t buy on them.

[00:32:12]:
And, uh, all it would take, all it would take is a bit of good news and we have a rocket ship higher Monday morning, right? That, that’s, that’s all it’s going to take. And that’s my call, by the way. I think that’s going to happen. I think we’re going to get some good news, likely Sunday night from the president, um, because Monday’s— today’s close may not have been a great Smart Money Hour, but it also wasn’t sell everything. Today was not a fear day, right? You may have seen the, um, Dow Jones at one point was down— was it 820 points? I think I saw 820. Well, half of those losses were taken back. It closed down 453. All right, NASDAQ was also off the lows, uh, you know, close week.

Yet S&P 500 down 1.3% from the start of the war, only down 2%. So let’s hope for some good news over the weekend. All right, folks, that’s it for the day. Hope you had a great day, an even better weekend. We’ll see you back here again Monday after the close.