In today's episode, Tyler dives into the market action, highlighting what's happening under the hood and the continued broadening effect on stocks. Despite continued all-time highs, sentiment remains surprisingly fearful, and as contrarians here at the VRA, we see that as a major opportunity. Tune in to hear Tyler Herriage break down the latest market internals, highlight shifting sector leadership, and discuss what might be coming next for the software space.

Don’t look back because the market is closed. Good Thursday afternoon everyone, Tyler Herriage here with you for today’s VRA Investing Podcast. Hope you all had a fantastic day out there today. Hope your week is going well. Here, uh, it was a bit of a mixed day. For our markets today. But if you’ve been tuning in here with us the last few weeks, you know a recurring theme that we’ve had here is when you take a look under the hood of this market, we continue to see— to continue to like what we’re seeing. A whole lot of bullish factors in this market, which I’ll cover here on today’s podcast and much more.

A quick recap of what we will go through here today, uh, in addition to the fantastic stuff we’re seeing under the hood. I’m even a little bit distracted by it. But we’ve only got one trading day left for the month of February. I know that might seem hard to believe. Where has this month gone? Where is— you know, it’s hard to believe we’re in the third month almost here of 2026 already. You know, only one month left here in Q1, and then we get a whole nother round of earnings as well. Speaking of which, I’ll, you know, recap a little bit of Nvidia’s earnings and really the aftermath here because Kip did such a great job of covering that yesterday, uh, after their report yesterday. Um, but as again, as we head into the end of February here, what does the seasonality mean for our markets? Well, it’s— we are just getting to the end of the worst month within the best 6-month period of the year.

[00:01:50]:
We’re now coming into two of the most bullish months of the year in the most bullish period of the year. So we’ll talk a little bit about that, um, and the surprises that we continue to get from sentiment. I don’t think I probably need to give you a hint on exactly what I mean by that, but as you know, we are contrarians here at the VRA, and what we continue to see from sentiment, we like. So we’ll get into that, and then of course we’ll dive into our major indexes, market action, our internals, which might also surprise you here today. As I mentioned, diving under the hood of this market, um, as well as our sectors and of course our VRA commodity watch. And throughout this, we’ll cover some all-time highs, uh, that might interest you here on today’s podcast. So stay tuned, got a lot to cover here today, uh, looking forward to diving into it here with you. Uh, I do want to begin here with sentiment on the day today.

Uh, after when I saw what I’ll get to here in a second after the close today, um, yeah, I couldn’t help but, but just laugh a little bit, uh, to myself. Uh, oh man, I get it, you know, scary times out there, um, where we’ve seen, you know, the destruction of software names that we’ll talk about here today. And Kip, uh, referenced this yesterday, a tweet that was going around yesterday. It was an image of the top 3 newsletters on Substack Substack. It might have been very specifically in the financial sector of the Substack. Um, I don’t have it here in front of me, so I’m not sure exactly what it was, but all three of them you would recognize. And you’d also recognize they’re almost always, always bearish, especially with the Citrini, uh, piece that came out yesterday, you know, that everybody’s job’s going to be destroyed by 2028 or something. Um, You know, we see this time and time again, and I talked about this on Tuesday’s podcast as well.

[00:03:54]:
You know, I get it, uh, you know, the bearish side of this sells a lot, right? So if you’re a researcher and your, your really primary goal is to increase your bottom line only, you take the moral hazards out of it, then you go towards the fear because fear sells. And what the tweet kind of said based off of that as well that Kip discussed was, you know, if you go in to the financial space— probably I might have said, you know, specifically financial research, but it probably applies to the financial space as a whole. Okay, uh, you kind of have only one or two options. You can get really good at your job and see that stocks mostly go up, right, over time. Historically, as far as the U.S. stock market history goes, there’s never been a pullback that didn’t end in an all-time high, you know, over 100 years plus of specifically U.S. stock market history. Um, Or you can go the other route.

And on that first route though, you kind of get a limited audience, but you make them money. They really like you. On the flip side of that, you can go the fear route, which sells. You get your name in the headlines, a lot of requests for interviews. You sound really intelligent. You know, people love you at cocktail parties because fear sells. Again, You know, they want the drama. Uh, it’s always interesting, you know, when I talk about being bullish about something and I see eyes glaze over.

[00:05:24]:
But as soon as you get into something they’re afraid of, they’re locked into it. Um, and so if you go that route, you know, again, huge audience, but you’re going to be constantly losing them money. Well, it’s no question here, uh, for Kip, Sam, Josh, and I, Danielle, everybody here at the VRA, which route we want to take. We want to make you money. Here at the end of the day. That is always our goal day in and day out, is to serve, you know, our clients, listeners, subscribers who are all over the world, you know, truly our Smart Money audience here with us. Thank you for being here with us every day as well. I know a lot of you are members, so thank you for being here with us, you know, so much here at the VRA.

But we love what we do, and every day we wake up with that goal right there, to serve, uh, you know the individual investor out there. I know we’ve got a lot of people who work with funds and that kind of thing, and that’s fantastic as well, uh, but I think you get my point. It’s to serve people who are, you know, to be in control of your own financial destiny and to understand it. You know, there’s never been a better time to be a retail investor than right now. You know, man, just 20, 30 years ago, the game was Whoever has the best data, right, whoever has the most data really specifically, can usually be the winner. And retail investors didn’t have access to that data. They did not have a seat at the table. We did not have a seat at that table, right? But now fast forward to 2026 and everyone has access to this data where the real important part comes in is now, you know, who has the best tools to parse through that data.

[00:07:10]:
Uh, so it’s really leveled the playing field. There’s never been, like I said, never been a better time to be a retail investor. There’s never been more tools at the disposal of a retail investor. And so we want to help, you know, individuals, uh, from every end of the spectrum, you know, to, to empower them, you know, for their financial future and show them a way of, you know, at least managing some of it yourself. And hey, maybe you’ll have some fun along the way too. Um, I don’t know, maybe I’m a little biased, but ever since I was growing up, I’ve always loved diving into businesses, learning what they do, how they really operate. So again, maybe I am a little bit, uh, biased there on that one. Um, so again, you know, fear sells at the end of the day, especially in the market, and it’s easy to fall victim of too because, uh Again, they do sound so smart, and there are a lot of intelligent reasons to be fearful, right? And if you go looking for them, you’re definitely going to find them.

Um, but there’s already— there’s all— not already, um, there just are simply are so many fundamental factors that, that have us bullish day in and day out for these companies. Again, I’ll dive into some of them here today, but first, let’s, let’s finish up here on sentiment. Um, because we got a few different, uh, looks of indicators today. We got the AAII Investor Sentiment Survey here overnight. Can you see the very end of that? There we go. Uh, a little bit different of a view of it here, just the last few weeks instead of, uh, going back, um, to the previous results from the last few months. Really what I want to show here, you know, we had— we saw a few weeks in a row of bulls, you know, well outweighing the bears, but now I mean, despite the fact we’ve hit all-time high after all-time high in the semis, uh, in a number of our sectors, and under the hood, you know, the NYSE advance decline line, you know, more stocks advancing now than ever before, um, broadening action in this market, a global bull market. We’ve seen so many major indexes and ETFs from countries around the globe hitting all-time highs, and still I mean, almost unfathomable that we’ve got more bears than we had before.

[00:09:29]:
Uh, you know, not— definitely not shocking. And once again here, as contrarians, I mean, hey, we love to see this. Another major factor here, look at this record put buying. And this isn’t just, you know, for the names that you would traditionally think of as AI victims. In here you’ve got, you know, senior loans, Consumer discretion, consumer staples are even over here, right? Healthcare, the financial sector, that one does make more sense to me. You know, healthcare, I mean, I guess admin costs have gone up so much that of course AI will fix that problem. You know, that was a government-made problem though. It should have never existed in the first place.

You know, that’s an area ripe for disruption. And I don’t mean, you know, the vaccine makers. I’m talking about really hospital systems as a whole. Um, but obviously, you know, tech software, one of the biggest losers there. But this is record-level put buying. Uh, and again, you know, I get it, uh, with the software destruction that I’ll touch on here with our markets in just a minute. Um, but it’s— I mean, again, these are not signs of a market top. When you’re hitting all-time highs and you see stuff like this record put buying, fearful sentiment.

[00:10:47]:
No, the market likes to fool as many people as possible. And at the end of the day, if everyone’s bearish, you know, at some point there’s, there’s going to be no one left to sell. Um, and, uh, again, when we do get to the point we think we’re seeing a market that’s putting in a top, we’ll see You know, AII remaining with more bulls than bears in every pullback. Yes, we had a massive pullback in software, but our major indexes, you know what, most of them less than 5% away from their all-time highs. And economic growth continuing, you know, so many different areas. Yes, GDP came in lower than expected, uh, but you know, that’s been our long-term call and remains our long-term call that we’re looking at 5% GDP growth likely this quarter going on right now. Our original call is the first half of 2026, uh, and then 8% by the end of Trump’s term. You know, I’ve been trying to get Kip to raise that to double digits here.

I really think it’s going to be that good. That’s how much excitement there is ahead of us. Um, I do have one more chart I want to, uh, share for you before I, before I wrap up. I don’t want to dive too much into the software area just yet, but again, when you’re seeing a 5% pullback like this, 7-8% pullback, and we have AII remaining more bulls than bears, you’re seeing record call buying, not record put buying. And this one, this is the one that really made me laugh here, the Fear and Greed Index. Okay, after a whopping, a staggering one day in neutral yesterday, and again, all-time highs, they, they took one little peek around the corner, you know, see if the coast was clear, and decided certainly not. Right back into fear mode here. Um, again, this is exactly why we have the VRA Investing System too, to remove our emotions from investing, to not buy into those fearful narratives out there.

[00:12:59]:
And again, as contrarians, exactly the kind of sentiment that we want to see. You know, again, not— this is simply not how market tops are formed. All right, let’s go ahead and start diving into our market action because I do want to talk a little bit in depth today, not too much in depth, uh, about the software story right now and the potential of where we’re headed next. But I’ll start with our leaders on the day today were small caps, up over half a percent on the day today. Um, this is a more interest rate sensitive group. You know, we’ve, we’ve been bullish on small caps for some time. When you’re seeing the small caps acting well, it also bodes well for the U.S. economy as a whole because these companies are primarily, you know, this, the, uh, Russell 2000 is primarily made up of U.S. companies.

So that being said, it makes them more interest rate sensitive. And we had the 10-year yield hitting another lowest level of 2026 today. Uh, not as low as you might think here, it was down, uh, almost 8/10 of 1%, uh, but still above a 4%, 4.01. So right there, um, You know, it doesn’t seem like that long ago that we were below 4%, but we’ve not seen a read below 4% yet in 2026. We’re right there now though. But again, you know, we’ve been calling for lower rates for some time. Uh, you know, that can’t come soon enough.

[00:14:34]:
We’ve got a couple of Fed meetings left with Jay Powell, and then in May, uh, hopefully we’ll have a new chairman of the Fed and we’ll see what we can get. Um, but again, you know, good to see yields moving lower. Um, next up here, the Dow Jones was also positive on the day, just barely though, you know, really pretty much flat here. But what you want to see from this group is you want to see semis leading tech along the way, right? That’s a long, uh, a long time saying of ours for any new listeners. You want to see tech leading the market and the semis leading tech. There’s a lot of industries and markets, sectors that you can apply this to. And one of them, you know, uh, even goes back longer than the tech and semis saying is from the Dow Theory. Actually, it’s from the Dow Jones and the Dow Jones Transports, uh, that one usually follows the other.

And today we had the transports up over 2% on the session today. So very good to see. All right, so now we’ll get into the red on the screen today as we did have the S&P 500 down half a percent on the day today. But again, uh, to the broadening effect of this market— and I’ll get to it more in the internals— the Equal Weight S&P 500 ETF up half a percent on the day today. So while we’ve seen the Mag 7 lag a little bit, and Nvidia after great earnings yesterday did ultimately finish lower on the day today— actually got above $200 a share, uh, in after hours yesterday— again, finished lower on the day today. Um, but we haven’t seen the Mag 7 for the most part participating, um, in this most recent move higher. You know, it’s been the smaller names, uh, some of the more unloved names, um, and certainly again not the Mag 7. Kip and I have talked about this a lot, the broadening effect of this market.

[00:16:31]:
You know, for anyone who wants to continue to say it’s only 7 stocks holding this market up, you know, the other 493 are pretty much leading, you know, the Magnificent Seven almost across the board on the year this year. So, and we see it here in the equal weight ETF almost at an all-time high here. Um, so again, we love to see that kind of broadening action. A rising tide lifts all boats. Um, and along the way, we’ll see these, these rotations back into the Mag Seven, and they’ll be the ones holding the market up while everything else takes a break. We could see it with software soon, right? We saw the semis, we’ve seen them hit all-time high after all-time high even without Nvidia for the most part. Uh, if they take a little breather here, you know, a little bit of sideways action, uh, and software could take the reins, we might, we might see something like that. Not saying that’s exactly what we’re gonna see, um, because despite the Nasdaq finishing down almost 1.2% on the day today, our final major index there.

And the semis finishing down over 3% on the day today. We did see the software sector finishing higher on the session day, even, you know, early in the session today was up 2.25%, took a little midday lull in there, you know, finished up over 2% on the day today. And a lot of names in there rallying from their lows, Salesforce being one of them. They also reported earnings yesterday after the close, and after earnings, the stock was down. The reverse happened that we saw from Nvidia, which was up in after-hours, down today. Salesforce up over 4% on the day-to-day. I’ll get into a little bit of the other names here in a minute, but, you know, CrowdStrike is another recognizable one there. Up 4.9%.

[00:18:30]:
Um, and again, one of the most beaten up names out there. Um, I’ll get to some more of the other names here, uh, in a minute because some of these have just been absolutely destroyed. And we did get actually some breaking news. I’ll get into this real quick. Some breaking news after the close today, uh, from Block Inc. Most of you might not know, but they made Square. It’s Jack Dorsey’s current company where he’s the CEO. After the close today, they announced, uh, they were laying off basically half of their workforce.

Not a huge company, you know, a little over 10,000 people. So I think they said they’re going to finish, uh, maybe a little bit under 6,000 employees when they’re done with this. The stock was up 5% on the day today, now in after-hours trading up over 20 2%. You know, so not, you know, one of the largest ones out there like a CrowdStrike or Salesforce, um, or some of the other largest holdings in the software sector ETFs. Um, this is interesting because he basically said this is not a financial decision in a tweet right after the close. He said, you know, they had a choice here. You know, choice number one was slow rolling this over the course of months and years laying people off, or to just basically rip the Band-Aid off. And, uh, Jack Dorsey chose the latter here in sort of a way to force them into more AI adoption.

[00:19:59]:
I think it’s an aggressive play on AI here, is kind of what the signal that at least that he’s sending with this. Um, so it’s good to see, you know, the AI disruption. This might be the first time, and this might be a big news headline story from this point of view, because it’s not the news that matters, is the market’s reaction to that news. Every time you hear about AI disruption, it sends stocks lower. You know, this might be a microcosm of what we see from the other sectors going forward, of companies not being destroyed because of AI disruption but actually rallying because of it. Now up 23% in after-hours trading. And I think there’s a big message here because while people can say, you know, oh, You can just go create your own version on Claude or any other of the AI agents that are really good with code, uh, create anything you want. It’s going to destroy the App Store.

It’s going to destroy every major app you’ve ever heard of. It’s going to destroy some of them, no doubt about it, the simpler ones. But when you look at something like a DoorDash, right, where it’s not just an app, it’s not just a software. You have to have demand. You have to have people ordering from restaurants that agree to be in your system. You have to have drivers that have at least somewhat been vetted, right, and in your system. Uh, that didn’t happen overnight. That kind of adoption doesn’t just take place in the matter of a week or months or even one year.

[00:21:33]:
Uh, so I think a lot of people are underestimating The first mover advantage, right, which is one of the immutable laws of marketing, which is a book I have somewhere on my shelf over there from, from a previous life working in marketing. But my mentor at the time loved it. You know, I think it’s the 11 Immutable Laws of Marketing, and this is number 1, the first mover advantage. You know, it’s a lot better to be first than it is to be best in a lot of cases.. And, you know, a DoorDash area might be one of those. Of course, Uber Eats has a big market share there, but I find it hard to believe you’re gonna have 50 competitors to them all of a sudden that all take some portion of this market share and are able to make money. Um, there’s, you know, the list goes on and on for softwares like that. You look at something like Zoom, which was the first for video, and there might be, uh, there are plenty of video services out there.

That are better than Zoom, but it’s a platform that people recognize, so people will continue to go back to it. And it’s not like these companies are just, you know, giving up on AI and saying, oh, we’re just going to do the old thing and hope that it works. You know, you think Visa and MasterCard, which have been hit hard by the AI disruption as well, you think they’re just, you know, not working on AI at all? These are some of the largest, you know, financial tech companies in the world. Uh, again, they have staying power from that regard. They can adopt the strategies of the smaller companies. So yes, It absolutely will be disruptive, but a lot of these names will still be around, and right now you’re getting them at a discount. You know, IGV, the, the software sector ETF, uh, again finishing up nicely on the day today, but from its highs in last September, okay, is— was down at the lows 35%. I mean, that’s a bear market and then some for sure.

[00:23:27]:
Uh, And the whole time, you know, we’ve seen hardware names, specifically the semis, hitting all-time high after all-time high. Our markets hitting all-time highs as well. Individual names hitting all-time highs. Industrials, materials, energy, right? But software just getting demolished. But in the last 3 sessions, from the lows, you know, it’s hard to believe it was just a few days ago even, we’re up 8.3%. So let’s take a quick look at this chart here. We shared this with members earlier this week. There we go.

All right, so looking here, this is a 2-year chart of IGV, the software sector ETF. Okay, again, 8% move off of these lows here. Fantastic to see. And I zoomed out here for a reason though. Yes, this waterfall decline looks terrible. But it wasn’t even 52 weeks ago that we were here. The lows from tariff mania were last April. And of course, you know, uh, you don’t love to see something like that in the tech space, but you don’t mind seeing it when you have the group as a whole continuing to hit all-time highs, which if you’re a VRA member, you know that’s where we’ve really been positioned more so rather than the software side.

But this level Well, we would look at that here in technical analysis terms is a support level. That is a quadruple bottom at this level. That’s some serious support there, you know. And on top of that, we’re hitting, you know, that’s the most oversold indicator for RSI of any of the other times, right? Almost across the board here, just about, except for money flow. Okay, that is extreme oversold on steroids maybe, and then some. Okay, uh, we don’t quite go that far. That is our most extreme designation for oversold readings, and we just got it there. Uh, so the question is, is this a reprieve from the punishment or the beginning of the next rally? We look for this trend line to hold.

[00:25:33]:
We think that, you know, as far as tech goes, uh, we remain incredibly bullish, and we might be witnessing kind of a FIFO action here, first in first out. You know, they peaked last September, our markets peaked recently, semis just hit an all-time high yesterday, uh, so we could be looking at a first in first out kind of situation. And to my point earlier of, you know, the Mag 7 really starting to earn their stripes as the generals for this market, you know, if the semis need to take a little breather and move sideways, you know, probably wouldn’t last very long. But software can help carry that load, and the Mag 7 can absolutely help carry that load on top of it. So overall, for our market today, kind of the inverse of what we’ve seen lately. Software names up big, semis took it on the chin a little bit here, even with NVIDIA’s incredible earnings. I mean, looking at— for the largest company in the world to see, you know, 70% year-over-year revenue growth, I mean, it’s, it’s outstanding. Right? Um, but again, you know, software name or hardware names took a little bit of a beating today.

But again, it’s not just, you know, obviously the semi ETF hitting all-time highs, but it’s some of the other largest names out there— TSMC, ASML, Lam Research, and others. You know, fantastic days here recently. So as we say often, you know, all-time highs are certainly not a bearish occurrence first and foremost, but also New highs beget new highs. All right, I’ll quickly try to wrap it up here for you on the day today, but I do want to pause on the internals here because it was a fantastic day. For a day where the Nasdaq was down 1.2% and spent the whole session in the red, I would say these are fantastic internals. Uh, if you just saw the internals and you didn’t know how the major indexes finished on the day today, you would expect it to be at least a pretty good day. For our markets today. You know, it might even be pretty rare for the NASDAQ to be down over 1% but finish across the board positive for the internals.

[00:27:37]:
Uh, advanced decline positive, 52-week highs low positive, volume positive. No huge beats or anything, but again, on a day like today, that tells you that this is a market that is broadening underneath the surface. Of this market. And, uh, certainly means that there are people out there, investors out there, buying the dip over and over again here. Once again today, uh, NYSE similar, no huge beats or anything, uh, pretty big beat on volume, but again, positive across the board here. Uh, you know, so again, one more factor this tells us, broadening action, okay? But as I said earlier, we’re headed into the most bullish period of the year seasonally speaking. This is what we see it as front-running of those best 2 months, uh, and especially as we get into the end of Q1, which means you see coming up on the back end of that, uh, fresh fund flows into a new quarter, um, well, which we’ll talk about more. I won’t get ahead of myself here for the month of March.

As for our sectors on the day-to-day You know, another sector that’s been, uh, hit hard, kind of the inverse of what we’ve seen lately. Financials leading the way today, followed thereby industrials, real estate, and energy. Our laggards on the day: tech, communication services, and consumer discretionary. Finally here for today, our VRA commodity watch. Gold was up, uh, during market hours. Let’s see, we were down slightly just before I started this podcast today, uh, but there is one more chart I’ve got here for you. Um, gold now at $5,200 an ounce, but GDX, I mean, another all-time high here today, up almost 2.5%. And, uh, you know, like we want to see semis leading tech, it applies to gold miners.

[00:29:35]:
Look at this leadership from the lows, you know, the tariff mania lows of last year. Just perfect textbook bull market action here of relative strength. Versus the underlying commodity. You want to see it as well in energy stocks, which we have seen energy stocks performing well compared to the commodity. Uh, semis outperforming tech, and of course GDX outperforming gold. We do remain long and strong this group as well. Good to see an all-time high today. After that, we do have silver down slightly in after hours at $88, uh, bucks an ounce. Copper above $6 a pound, almost exactly $6 a pound. Uh, and oil now at $65.22 a barrel. Finally here for today, Bitcoin now at $67,474 a Bitcoin. Folks, that is all that we have time for here today.

Please be sure to subscribe to receive our VRA Investing Podcast every day at the market close. You can sign up at vraletter.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.