"Kip's VRA financial newsletter is a MUST read for every saavy investor in this country. Disregard it at your own peril. His mantra is my mantra: Buy Gold and China. Sell short on pretty much everything else. Kip Herriage's newsletter is my financial Bible."

--Wayne Allyn Root
2008 Libertarian Vice Presidential candidate
Author, "The Conscience of a Libertarian"

Twitter: @kherriage

Karl Bessey

Mary Dee

Mike Budny 
Twitter: @kherriage

Monday
Apr252016

VRA Update: This Breakout is Real

Before we get to the most bullish sector in the market, here's a link to my recent radio interview. I explain the 3 biggest risks in the markets today, and why central bank insanity is driving money into precious metals.

Here's the link: bit.ly/1StGg2A

While the overall market moves from "most hated group" to "the second most hated group", etc.,...seemingly dancing on the head of a pin while earnings continue to deteriorate badly, the one chart that continues to get the attention of traders everywhere is GDX (mining ETF).

IF I AM CORRECT, WE ARE AT THE MOST IMPORTANT LEVELS IN 6 YEARS

Assuming we break through the 6 year downtrend line...and we are exactly at these levels now...GDX may experience a parabolic move higher...a compressed move that could send GDX up an additional 70% from todays levels, by year end. 

On Wednesday, GDX hit a new 52 week high, then had an "inside day". Traders used that reversal to take GDX back below the previous days levels. Importantly, should GDX break back through Wednesday's high price of $23.82, an avalanche of buying should ensue. 

This may sound like a short term target/strategy, but combined with a challenge of this 6 year downtrend line, this signals a major move higher...just after we break through $23.82.

Finally, check out the huge volumes of the last few months...it's clearly signaling huge money flows into the sector. Continue to buy gold, silver and most certainly VRA Buy Rec miners. This move is just getting started...and it will last for years.

Until next time, thanks again for reading...

Kip

 

 

Wednesday
Mar302016

VRA Update: Yellen Loves Stocks & Global Economies. Should We?

Mar 30, 2016

Don't Fight the Tape...Don't Fight the FED. Anyone that's been with the VRA for a while knows that this is an investing rule that I live by. Following FED Chair Janet Yellen's high profile speech yesterday to the New York Economic Club, it's time to take a fresh look at one of my cardinal rules of investing. 

Don't Fight the Tape

The tape....code for "the current trend in the stock market"...can be determined by reviewing the action, or "ticker tape" (for our old school investors), of the major equity indexes. Today, we see a HIGHLY mixed bag in the tape. First, the positives:

Both the S&P 500 and Dow Jones have broken above their 200 day moving averages...a key level for trend watchers...with both having stayed above the 200 dma for 9 days. Granted, both averages are hovering just 1-2% above their 200 dma, and the move higher has come on very light volume, but nonetheless, the move above the 200 dma has taken place.

Take a look at this chart on the S&P 500. I've inserted two blue horizontal lines. The lower line shows where the index lies today. The upper line marks the resistance, or selling pressure, that has (since last year) consistently turned stock prices lower. This "death zone" as Twitter follower @stocksurfer10 pointed out yesterday, remains the biggest obstacle to long term stock market bulls. 

~In Gmail select: Always display images from kip@vraletter.com~

Most importantly, it's this exact level of resistance that has resulted in two massive sell-offs...both since August. First we had the "flash crash" in August which resulted in a one day, 1000 point sell-off in the Dow. Of course, the most recent bear market decline took 15% off of the Dow and S&P 500, from the November highs to the February lows. 

Folks, no one can dispute the following statement...and I believe it is a most important market reality. The pattern in stock markets is one of "lower highs and lower lows"...going back to May 2015...and it remains as one of the most heavily bearish technical formations around.

Final note on this chart: as the market topped in November, notice what happened around the 200 dma (the red line moving average). As gravity took over, the major indices crashed through these lines once again...causing massive losses for the average stock market investor. The VRA nailed this move lower. We had more than 150% in realized profits, plus another 200% in paper gains...paper gains that have not only vanished with this move higher, but that have now turned into losses from our market short positions.

Now, the Negatives:

You know these well...I've been reminding you of the negatives daily...but Mr. Market seems to care less what I think, at least for the short term. 

Instead of posting a chart, consider the following: not only are the Nasdaq, Russell 2k and major sectors like banks and energy, trading beneath their 200 dma, but internationally it's pretty much impossible to find ANY stock markets that are trading above their 200 dma. Whether we're talking about China, Japan or Europe, each market continues to languish beneath the levels that would signify a reversal is on the way. 

Globally, the "tape" continues to flash a major SELL signal. The question is, will US markets....plus the FED's money spigot...be enough to bring these global markets back into bull market status? Will the move above the 200 dma, in roughly of our indexes, be enough to sustain a continued move higher?

Here's the deal. Unless corporate earnings can reverse themselves, and the 4 consecutive quarters of negative earnings growth, this move higher is on borrowed time. 

The FED

Don't fight the tape...we've covered that one. Now, what about fighting the FED?? This is where it gets a bit confusing. First, the FED raised rates in December. Following that meeting we know what happened....stocks dropped 15-50%...depending on the global market you're looking at.  

"Don't fight the FED" made itself known very, very quickly.

Since the December rate hike, the FED has backed away aggressively from their "higher rate" stance....culminating in yesterdays speech from Yellen, where she essentially said "we will not raise rates again this year"...at least thats what the markets heard. It's an election year, after all...and this most highly politicized FED seems hell bent on both sending Obama's stock market on a high note, as well as doing their best to get Hillary elected. "See how the stock market did under BHO?? Well, a Clinton presidency will ensure at least 4 more years of higher stock prices!" Make no mistake...this is absolutely a part of the action in the markets today. It's certainly on the lips of every top strategist that I know.

Bottom line; the FED wants higher stock prices....of this there can be no doubt. Yellen's speech made this crystal clear, with numerous stock market references. At the same time, she referenced global markets over and again as well. And this is what infuriates long time central bank watchers....nowhere in their mandates will you find anything about the FED's role in the US stock market....nor will you find anything resembling a mandate to prop up global stock prices. Yet...this is EXACTLY what Yellen's FED has taken on. An abomination that will boomerang right back to them...the only question is "when".

Until then, central banks globally have cut rates more 600 times since 2008...this is "don't fight the FED" for sure. The question is, how long can this monetary insanity continue before currency inflation evolves into hyperinflation?? BTW, this is why we own PM's and the miners...and why you should continue to buy them on every pullback of size.  

VRA Positioning

In short, these past 7 weeks have sucked. Yours truly is a very sore loser. Over the years I have taken a great deal of pride in "bashing Mr. Markets head in"...something that the VRA has been able to achieve year in and year out...going back to our inception in 2003. My job is to make you money...I have failed miserably at this of late. 

I also know that past gains don't help you now...and they do not change the fact that I've been on the wrong side of this move. 

Here's the deal; tomorrow marks the end of the first quarter....and with it, the window dressing that we are seeing right now. Should the markets tell us that they are ready to break through the "death zone", as referenced above, we will take our losses and reposition. I continue to be HIGHLY skeptical that this will be the case. Instead, look for a major corrective move lower...likely in the next few days...it's this correction that will tell us the markets next move.

I will be updating more frequently going forward...our biggest gains come from the markets surprise moves...I expect that we are about to see the current "capitulation" reverse...with a move lower of more than 1000 points in the Dow. 

Until next time, thanks again for reading...stay frosty.

Kip

Sunday
Feb212016

VRA Update: Your Questions; Sharp Reversal Lower - Specific Targets to Watch


Good Sunday everyone. I received two great questions this week...perfect for this VRA Update. Plus, I'm including specific index price targets for a sharp reversal lower (and yes, it's fast approaching).

Question One (Bill in TX): I enjoyed reading your "Professional Short Sellers" update for technical levels to watch for a reversal. Based on the close, haven't the transports reached both the 50% retrace levels along with being 90% overbought?

My answer: Great points Bill! Not sure how I missed mentioning this yesterday, but you are exactly correct. As of now, the transports have rallied a full 50% off of their high-low, and based on my proprietary VRA System reading, is now 93% overbought. Along with the Dow Jones, which has also retraced 50%, we are close to the point where top technical analysts look for a massive reversal...likely followed by fresh lows.

Key Index to Watch: Watch the transportation index ($DJT) folks. The transports led the way down, to begin this huge sell-off...and everything I've learned tells me that one of two things will happen: the transports will reverse lower "soon", or this may be more than just a dead cat bounce. You know my thoughts...we are going MUCH lower.

Question two (Sue in CA): Should we expect the federal reserve to continue further with QE and possibly even negative rates? From what you have said, they are all in, and I agree. Why should the insanity stop now?

My reply: You must be reading my mind Sue. In order to make money in these markets, we MUST have a high degree of respect for the unlimited power of the FED's printing press. I am always on alert for signs of the worlds central banks next move...and no, I do not believe the insanity has ended.

But here's the issue that I see, and that those I most respect, see as well. We are witnessing clear signs that the power of central bank moves has not only lessened, but likely, reversed into being clear negatives. As the world is moving to negative rates, the worlds equity markets have replied with fierce sell-offs. This is a point that cannot be forgotten. It might also mean that the next crash will come directly from central bank mistakes.

As I tweeted, the Bank of Japan now purchases up to 90% of all government bond sales. That's right...the country issues them, then the country buys them (through the BOJ). Just a decade ago this would be considered unimaginable...now its just "normal". In addition, and this is truly amazing as well, the BOJ now owns 54% of ALL Japanese equity ETF's. An no, I didn't stutter...they own and control 54% of all equities held in Japanese ETF's.

Does anyone see anyway this ends well? Central bankers...highly educated morons, leading us right into global financial systemic collapse. This is exactly what I expect historians to report.

VRA Market Update: 

Here's the bottom line on this bear market rally. As we approach these most important technical levels, soon we will all know what the next move will be; either a sharp move lower, or a continuation of the rally we have seen since last Thursdays lows.

Consider the following indexes...I spend a fair amount of time referring to these...now we will identify the specific points where short sellers will begin to get heavily aggressive, once again. As you'll see, we are quickly approaching many of these levels. 

Note: to keep this focused, I will not get into the "hows" of the technical analysis involved in selecting these levels...just know that they represent the 'median" price/trading points from the early December highs to the lows of last week. The levels I am pointing out are where the shorts will become HIGHLY aggressive on the short side...should we even reach these levels.

ONE: Russell 2000 ($RUT): I have targeted RUT because it first led stocks lower, and because of the size of the move lower I expected. For example, from just those early December market highs, the Russell 2k fell a huge 19%, versus the Dow Jones, which dropped by 11%.

Short Sellers are targeting a possible move to 1051 on RUT, versus the 1014 level today...meaning that RUT has potential upside of roughly 3.5%. Should the Russell 2k manage to achieve this kind of move higher, the level of short selling will be ferocious. 

TWO: Volatility ETF ($VIX): Short sellers are very close to aggressively targeting volatility again now. For example, their price target on this pullback is 20, and today's level of 20.50 means we are getting very close. I fully expect to see new cycle highs on the VIX, and we will use this to add to the 1000% + profits we've booked from using the VIX, alone, in just the last 3-4 years.

THREE: Energy co's, through XLE (energy stock ETF). From the most recent December highs, XLE plummeted 26%. Shorts are now targeting a potential move to $59 on XLE, before once again getting highly aggressive on the short side (last trade, $57). The next reversal will take oil to fresh cycle lows (just before the big turn that sends oil surging once again, as defaltion evolves into hyperinflation).

VRA Subscribers should save this update. As we test key levels, we will look to aggressively add new market short positions by keying off of these indicators (plus the other 50 indicators the VRA System employs). Remember, prior to the January sell-off, VRA Subscribers had a combined 1300% net short position (we love using leverge to our advantage...something that select VRA recommended leveraged ETF's help us to do). We timed the sell-off with near exact precision and we did so with huge, market short positions.

My goal is always simple, always clear; book massive profits for my valued Subscribers.  

Timing Mr. Market

We know the next phase lower is near because the market is telling us...

Sounds simpleton I know, but let me repeat; the market talks to us each day...all we have to do is listen.

Here's what it's telling me now: the bear market rally to date has been almost purely technical in nature...driven by short covering, low volumes and a continued addiction to the price action of oil. 

My work shows that neither oil or stock markets have bottomed...and that within short order, the dead cat bounce will be over. We will be very, very ready.

We may soon be adding to our market short positions...stay frosty!

Kip

VRALETTER.COM

Wednesday
Feb102016

VRA Update: Fresh VRA System Analysis: 1000% Profits for 2016

Good Wednesday all. It was an honor being Wayne's first guest on his new radio show last night. VRA Subscriber (Phil T) even jumped out with the first question for Wayne....plus a very nice plug for the VRA. Thanks Wayne and thanks Phil!

 I'll be joining Wayne frequently going forward and like last night, no target is off limits. The truth resonates...always has, always will.

I had asked for your testimonies and your replies were awesome. We'll record some new VRA spots soon and it's my goal to include your voice and details of your own investment success. But here's a testimony we received that everyone should be able to relate to:

"I joined the VRA in the late summer of 2015. I had minimal money to spend but decided to go ahead and join. I started trading with small amounts on VRA recommendations, just a few hundred dollars. After several months of LARGE profits I began to increase my amount in each investment. And recently I started investing between $2000 and $8000 in each recommendation. My accounts have literally doubled in six months and that is with very small investments to start with. What a blessing! As I write this, just today I am up an unbelievable amount. OVER $5300, just today. Need I say more…Les W."

Congrats Les! Let's keep it rolling...

VRA System Analysis Targets 1000% Profits for 2016  

They say the purpose of setting goals is akin to using a road map when planning a trip. How will you know you've arrived, unless you first know where you are going...

It's with this in mind that I ran the following VRA Analysis. As you'll see, the projections are for a (near) record year with the VRA. which would result in profits of more than 1000% for Subscribers by the end of 2016. After putting up 1300% in net gains in 2014, 730% last year, 1000% in 2016 is directly in my sights. 

Over the last 2-3 days I've charted each primary index (S&P, Dow, Nasdaq, Russell 2k, plus Intl), along with specific holdings of the VRA, and where they should eventually trade...all based on specific price targets that the VRA forecasts will come to pass.  

For example, because we know that the S&P 500 and Dow Jones lose (on average) 36% during the average recession, we can extrapolate from this that a further drop of 23% (minimum) would take place by the end of 2016 (S&P 500 has lost 13% to date). 

In this scenario, if we only used SPXU (3 x bearish ETF, S&P 500), we would make additional profits of 69% (23% profits, with 3 x leverage of SPXU). But it gets much better. Because I use the VRA System to "time" our investments in each market cycle, it's highly likely that we will trade SPXU several times this year...which has the potential to turn that 69% return into 200-300% + in gains for 2016.

I've repeated the same exercise with each of the investments we intend to use (leveraged ETF's for trading vehicles). The results would appear ridiculous for most...just not for the VRA.

2016: Turning $10,000 into $100,000 (or $100k into $1 million, etc)

If you've been here for any length of time at all, you know that the VRA Trading & Investing System has no equal. It's time to make sure you take full advantage of it. 

My goal this year is to once again produce profits in excess of 1000%. The VRA surpassed this level of profits in 2014 (1300%) and then topped 730% last year. Frankly, with precious metals breaking out, we may just blow this return completely out of the water.

The VRA Trading & Investing System...1000% return in 2016...this is my target. Care to join me??

Make it a good day everyone. Yellen's testimony will likely provide a lift to the markets today (as forecast yesterday). The only question is, how long might this bear market rally last?

I'll have the answer to this question a bit later. 

Kip

VRALETTER.COM

Friday
Feb052016

VRA Update: Today, the Bear Market Became Real...for the Investing Publics Lemmings

Good Friday morning all. The employment report just released was a big miss from expectations. We're told that 151,000 new jobs added, while the estimate was in the 190,000 range. As I said yesterday, this report will not change anything...even though the public will see the new shiny official unemployment rate of just 4.9%, and that might just be enough to keep them in their underwater stocks and maintain a fully invested position in their 401k's. Psyops at work...

No one that I know/respect actually believes most of these government reports...not these days. If you remember, last months big addition of 292,000 jobs was supposed to be proof that "all is fine"...and then we found out that 280,000 of those new jobs were based on "modeling", rather than actual job creation statistics from each state. Not kidding folks...that's what happened. To prove its dissatisfaction with this (and more), the market has since plummeted more than 7%. 

Here's the big picture point about the economy...a point that is FAR more important at this phase than employment data; debt deflation is taking over. The coming contagion in debt, both globally and here in the states, will continue to act as gravity for most asset classes....precious metals being one of the few exceptions. 

More Proof That FANG is Over

Did you see the earnings report from LinkedIn? This was another big time high flyer...until the bubble popped yesterday. Just this morning, LNKD is trading down a massive $67/share, for a shocking 35% loss. WOW...this one even surprised me. It's now trading at $125...a full 50% lower than its price in December.

I dont have enough time to list all of these diary dust companies that are getting taken to the woodshed, but it's just another sign of the times. AVOID ALL TECH "GROWTH STOCKS"...their declines are just getting started.

MARKET UPDATE - Today, the Bear Market Became Real...for the Investing Publics Lemmings

Take a look at my most recent Tweets from this morning....for those that are not already following me (why not?? Simply use my handle: @kherriage).

As you can see, it's a tumultuous day in the markets, but it's especially tough for the FANG related stocks that I keep harping on. When CNBC spends a significant amount of time on the bloodbath taking place, you know its bad. 

Here'e the deal with today, and why we'll soon see these 30-50% collapses as a "most significant development" in a bear market that will be brutal (for most).

When widely held, beloved stocks like LinkedIn, Netflix, Tesla, Google, SalesForce and Amazon get demolished...all at the same time, just as they are now, it's a clear sign that the big money on Wall Street is throwing in the towel. 90% of the time (my estimate, but I believe its close), these kinds of "across the board shellacking"s are just the beginning of the real pain to come. 

I believe this is the case now....that's why TODAY is the day that this bear market becomes a reality...for most investors at least. Of course, we've been out of all the stocks getting slammed for roughly 2 months, not to mention the very nice profits we've made on the way down to date, through our market short positions.

Now, things begin to pick up speed... 

Folks, today is the day that "many" thousands of investors globally say "to hell with this...just get me out". That means Monday could be most interesting, as sell orders from over the weekend are placed for long term investors, including their IRA's and 401k's . If you've been here for any time at all, you know that I've been looking for a classic Monday selling climax. I'm talking about the kind of sell-off that takes the Dow down more than 1000 points, with fear and panic selling across the board....which will send VRA Core Portfolio market short positions, soaring higher still.

Stay Frosty....today will be remembered as MOST important.

Kip

PS; I just saw news come across the wire that Brazil's health org. is announcing their findings that Zika CAN be transmitted via saliva, as well as semen and urine. We're also getting global reports of numerous deaths from the virus...something that I continue to hear very little about in financial circles. Somehow, I think we're on the right side of the history that's about to be made with this virus. 

  1. One picture that says it all. And it's just getting started.

    Embedded image permalink
  2. Anyone else getting hit with this spam? "amazing, 80% off" discount offers from cruise lines? Started last week...picking up speed.

  3. Just 2-3 months ago I had daily battles with FANG Bulls. Now that they're collapsing, where'd you guys go?? Best short idea today?

  4. Precious Metals and miners showing intense strength. Everyone's waiting on a pullback to buy more...may not get one.