"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. Kip Herriage's newsletter is my financial Bible."

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

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Journal Archive
Twitter: @kherriage

Thursday
Jul182019

Multi-year Breakout in Precious Metals and Miners.

The Train has left the Station for Precious Metals and Miners.

Gold, silver…and most especially the miners…had major moves higher. VRA holdings in this group up a combined 140%+ in the last 3 days, but folks, this move looks to be only just beginning.

GDX (Miner ETF and underlying structure for NUGT) traded a nice 84 million shares, which provides additional confirmation on the breakout for us. If you’ve been following our work for long you know that we want to see back to back days of 80 million + shares traded in GDX for rock solid confirmation that the next major move higher is “on”.

Of the bullish signals for PM’s and miners, none is more bullish than when the miners are leading the commodity price higher. Check out the relative strength chart below of GDX to Gold. Beginning last September, GDX began to significantly outperform gold. Because the leverage is in the underlying equities, this is just what a PM bull wants to see. As can be seen, the outperformance is actually picking up speed.

Our next target is $30+ for GDX. Roughly 13% higher from here. And it’s nice to see others begin to confirm our work on relative strength analysis. When the miners lead, our most powerful moves occur.

ST trading note: yes, the miners are approaching extreme overbought readings. But check out gold. Nowhere near overbought. Not even close. Gold looks ready for a sharp move higher…which of course will propel the miners as well. Just how its supposed to work, in major breakouts in this space. And look at the volume build. Chart perfection.



A final note on this group; in the recent past, following big moves higher, the manipulators have commonly taken down gold/silver overnight. That didnt happen last night. Tells me the move higher will continue. All VRA miners remain a buy.

Investor Sentiment

Lastly for today, here’s the latest AAII Sentiment Survey. Bulls have finally surpassed both bearish and neutral readings. When this survey starts approaching 60% bulls we’ll begin aggressively taking profits in our US broad market lev ETF positions.

Until next time, thanks again for reading…

Kip

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

Join us for two free weeks at VRAInsider.com

Sign up to join us for our daily VRA Investing System podcast

Also, Find us on Twitter and Facebook

Thursday
Jul112019

Energy is Building, We Must Be Long and Strong. My Thoughts on J Powell Testimony.

We are in the early innings of an economic boom. If you’ve been positive on the Trump economy these past 2.5 years you’ve no doubt been called every name in the book. My favorite is when permabear trolls call me a racist bigot Russian puppet…all because I am bullish on the US economy and our markets. My best advice is to ignore the glass is half empty crowd. They’ve been wrong…they’ll stay wrong. We are headed into the best economic boom of my lifetime.

The VRA Investing System remains at 10/12 screens bullish. This is the closest we’ve been to 11/12 screens bullish in “forever”. The chart I posted in our VRA Update earlier this week resulted in quite a bit of feedback. Yes…over the last 18 months, the DJ is up just 150 points. 1/2 percent higher over the last 18 months. No, this is not bearish. This is a highly bullish set up.

Think of it this way; even as the US economy has continued to expand…even as earnings have continued to grow and p/e multiples have continued to contract…the markets have gone nowhere for 540 days. The end result? Energy has been building. Significant energy, in our view, that will propel the markets sharply higher from here. We see this energy in consistent, broadening market internals. This is when big moves higher take place. DJ 30,000 by year end.

Yes, we remain at overbought levels in the broad market. This is when we use pullbacks to add to positions.

My Thoughts on J Powell‘s House appearance yesterday

1) lower US rates do NOT imply a recession is nearing. Lower rates are an acknowledgment that the global rate environment is in the process of changing…radically.

It means that rates will stay low for a very long while…financial engineering designed to propel economic growth. I am perfectly fine with this.

2) Powell's word of the day was “uncertainty”, meaning that the FED will 1000% cut rates at their meeting later this month.

He also said, as the Fed has said repeatedly, that the Fed wants “more inflation”. Because I am an analog man living in a digital world, this mindset is mind-blowing to me.

We want “more” inflation”? Alrighty then….we’re gonna get it. What loves inflation more than anything? Read point 3.

3) This is the best looking fundamental and technical set up in gold/miners since 2002/2003. I remember this time frame well.

Like then, the 200 dma has turned sharply higher…nearing parabolic. This is when momentum based moves higher take place.

With rates plummeting around the world, the set-up for easy money govt policies is sending MAJOR long term inflationary signals. Gold loves this signal. The miners like this signal even more.

4) the broad market is set for a melt-up move higher. That 18 month consolidation period is in our rear view mirror.

If you have not signed up for our daily VRA Investing Podcast, take a few seconds to sign up now @ vrainsider.com/podcast

And please, tell a friend. Our goal is to become a top 10 Spotify/iTunes financial podcast. Help us pay it forward!

Until tomorrow morning, thanks again for reading….

Kip

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

Join us for two free weeks at VRAInsider.com

Sign up to Join us daily for our VRA Investing System podcast

Also, Find us on Twitter and Facebook

Friday
Jul052019

June Jobs Report, Big Beat. VRA Portfolio Update, +31%. VRA, Highly Recommended Reads.

Good Friday morning all. The June jobs report is in and the number is a big beat. 224,000 jobs created with only minor revisions lower over the last 2 months. The bears will tell us that this should send stocks lower, as it removes the odds of a rate cut later this month. Ignore the bears…keep buying our VRA Portfolio buy recs. Rates have already been slashed…free markets figured this out long ago.

Bit of a different update today, once a quarter we feature some of our most important research to help ensure we are on the same page.

First up, if you aren’t joining us for our daily VRA Investing Podcasts, why not? It takes 30 seconds to sign up at vrainsider.com/podcast to receive our daily reminders once the podcast is published. After talking me into doing it, we’ve just completed our first year with several hundred listeners each day.

In 5–10 minutes we walk you through what happened in the markets, and more importantly, we tell you what the VRA Investing System is forecasting, going forward. Here’s an email we received this week:

Thank you for your podcasts. Just signed up with VRA after listening for the last 6 months or so. You’ve been more right than anyone. The VRA has a crystal ball. Joe C.”

Thank you Joe and great having you with us!

VRA PORTFOLIO UPDATE

Here are our results for 2019 (through Wednesday). +31.36% vs 19.7% for S&P 500. Each position remains a buy…working on VRA growth stock 10 bagger updates this weekend. Check out our 14-day free trial to see our exact positions.

STUNNING ANALYTICS

With thanks to Troy Bombardia, check out this piece of analytics. We’ll get into more going forward, no doubt, but when the Nasdaq does what it just did, the avg move higher is 34.99% over the next year, with 100% bullish outcomes. Holy bull market batman.

INVESTOR SENTIMENT UPDATE: AAII SURVEY

For our newer VRA Members…but a good refresher for everyone…below are VRA Updates from 3/29/19 and 2/12/19. These contain our fundamental macro views for being bullish, which have only been cemented further since first publishing. Save and file these away…revisit often…crush Mr. Market.

VRA Update: We Are Not Uncertain. Strap in. DJ 50,000 Here We Come.

Mar 29, 2019

Good Friday morning all. If you’ve been here for any length of time at all you know we have been, and continue to be bullish…on the US economy, global economy, and most certainly US stocks.

I know no other way to say this but to say it as loudly as possible:

EVERY FIBER OF MY DNA IS TELLING ME THAT A MONSTER MOVE HIGHER IS DIRECTLY AHEAD.

Apologies for the screaming…but as Tyler and I discussed at length yesterday, our job is to make you money. We believe you need to know exactly how strongly we feel about this.

I helped pay my way through college betting on sports. Sports betting just always made sense to me. If you’re like me, when you get that “DNA level lock” you know that you go heavy. Stone cold locks don’t come around often…when they do, over time you learn to trust your instincts and go big. It was a surprise to no one that I found my way to Wall Street.

Know this; Today, I not uncertain. Fortunes are about to be made for the smart money investor. It’s time to be locked and loaded. The VRA is about to get much more active…much more aggressive.

This market feels very much like 1998 to me. I remember it well. The DJ had just dropped 17% to 7500. We then had a yield curve inversion, just like today. Recession fears were high.

But the economists got it wrong…again. Economic growth came roaring back. Growth kicked in. And the IPO market began to get red hot. Investors (the public) came flooding back into stocks.

Over the next two years, the DJ spiked 54%. As dotcom mania kicked in, the Nasdaq would soar 3 x that amount.

In the event that trusting my instincts is not good enough for you (your mistake), let me add the following macro points:

1) When I first became a broker (1985), Reagans tax cuts were just kicking in fully. The DJ would more than double in less than 3 years. Sound familiar? Trumps tax reform, deregualtion and pro business optimism is about to have an even more positive impact.

2) Populism/nationalism is replacing globalism. It’s taking place all over the world. Few seem to understand how wildly bullish this is going to be for the global economy. But I do. 3 decades of the failure that is globalism, dying a slow death. Good riddance.

3) Trump has called China out on their economic criminality for at least 15 years. Google it…there's ample video evidence of Trump saying exactly what he's been saying, a position that played a major role in winning the election. Today, Trump is closing in on “actual” free trade with China and the world. Gone will be bogus trade tariffs. Tariffs that favored the rest of the world over the US. Wildly bullish for the US economy.

4) Investor sentiment. As we cover here often, the public has a great disdain for the stock market. Who could blame them. First the dotbom, then the great financial crisis, then this past December, the worst since the Great Depression.

But folks, bull markets do not end when the public hates stocks. Bull markets end in a euphoric bubble. Bull markets end when everyone and their mother believes that stocks cannot go lower.

We’re nowhere near this level today…but we’ll get there. Its the very psychology of human nature and the markets.

Make sure and take a few minutes to listen to Tyler’s podcast from yesterday. At 27, he has a great feel for the markets. You’ll hear evidence of our bullishness.

https://soundcloud.com/user-640389393/vra-podcast-tyler-herriage-daily-investing-podcast-mar-28-2019

— -

Make sure and log in to your VRA Members Site regularly to ensure you are positioned correctly. we only recommend 10–12 stocks at a time. We want a highly focused portfolio, especially for the melt-up that we see directly ahead.

Make sure you are locked and loaded. We’ll guide you every step of the way. Dow Jones 50,000 + here we come. We are not uncertain. Stay Frosty.

VRA Update: The Death of Globalism. The Birth of the Global Super Bull Market. Game On.

February 12, 2019

Good Tuesday morning all. Following the 2016 election of the man, the myth, the legend…one Donald J Trump…the world has watched in envy as the US economy and US stock markets have soared higher in response. Autocrats and bureaucrats the world over…socialists all…are being jolted from their deep slumber. The wake up call must be deafening, Ms Merkel and Mr. Macron.

Globalism is dying. The European Union is dying. Nationalism/populism is slowly taking over, everywhere we look. The end result will be the birth of a global, super bull market. A worldwide melt-up of wealth creation, birthed in the powers of free market capitalism. Birthed in the power of the individual, rather than the collective. Mises vs Keynes. The epic economic battle to the death.

Of course, we’re already awash in socialism. It’s everywhere we look, even here in the US. From the early days of Woodrow Wilson to FDR, with $22 trillion in govt debt, our ship may already be sunk.

But we never stop the good fight. Here’s what that fight looks like, globally. Folks, positive events are occurring!

1) As nationalism/populism continues to win out, smaller governments will become the norm. Adios EU. Adios state sponsored socialism. Adios nanny state.

2) The days of manufactured and manipulated economic growth will come to an end. With the US leading the way, true/pure global competition will reign supreme. HUGELY bullish.

3) Countries will be forced to slash personal and corporate tax rates, in order to compete with lower tax global regimes (aka the US and China).

4) Barriers to entry will be slashed. Tariffs and trade restrictions will be forced to near zero in the years to come. Trumps “trade war” with China is a direct shot across the bow at global governments everywhere.

5) Deregulation will sweep the global landscape. Nanny states across the planet are being put on notice. If you wish to provide cradle to the grave services, your debt loads will become unmanageable. Your interest rates will soar. Your economies will crumble in a fiery death spiral.

This is the Trump doctrine. This is how Trump forces his will on the global economy.

While global economies now border on recession, with 2018 stock market losses of 25–50% +, our own economy continues to lift off spectacularly, regardless of the wrong-way forecasts from low IQ economists like Paul Krugman (Mr. fax machine himself).

Here at the VRA we’re big fans of tracking relative strength between asset classes and markets/sectors. To get a direct glimpse of the death of globalism, check out the most dominant economy in Europe (Germany) compared to the US (S&P 500) over the last 2 years.

What we see below is spectacular outperformance of the US to Germany. In fact, 38% outperformance. Think the German people like seeing their investment accounts collapse for 2 straight years??

US economic growth is even more remarkable when you consider the fact that our central bank has hiked rates 9 times since December 2016, while Europe and Asia remain in the 0% to negative interest rates.

This is why foreign capital continues to flood into the US. We not only have the power to normalize rates, but we can grow our GDP by 3% + at the same time. Rock and roll. Just getting started. 35,000 DJ by end of 2020. 50,000 DJ by end of Trump's second term.

We’ll continue to revisit this theme often. The developed world has a choice to make. Kill globalism off for good or watch your economies continue to get their ass kicked by the good ole US of A. The world has 6 more years of Trump to deal with. And this man enjoys kicking ass a great deal.

Self-preservation usually wins out. It’s their call…their decision to make. We’re watching closely. Your people are watching even more closely.

— — 

TO WRAP IT ALL UP

Since publishing these pieces our bullish views have only become stronger. Will this be the bull market of our lifetimes, as we continue to suspect? Only time will tell, but here’s what I believe I can tell you with certainty…until fund managers and the public become wildly bullish on the markets, this market will continue sharply higher. Yes…negative investor sentiment of today is the fuel for this powerful bull to continue.

Until next time, thanks again for reading…have a great weekend

Kip

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

Join us for two free weeks at VRAInsider.com

Sign up to Join us daily for our VRA Investing System podcast

Also, Find us on Twitter and Facebook


 

Friday
Jun282019

Coordinated Momentum, Liquidity Breakouts Continue. VRA Market and System Update.

All eyes are on the G20 and Presidents Trump/Xi meeting on Saturday. Earlier this week, Treasury Secretary Steve Mnuchin stated that “we’re 90% of the way there”. I wished he had said nothing of the sort.

Our view is unchanged. We’ll be surprised if a trade deal is completed…but we will also be surprised if the meetings are a complete disappointment. Both sides will be heavy with the spin.

Here’s what really matters; the markets likely already have this figured out. We’re going higher…much. New all-time highs will beget more new all-time highs. And, we WILL break higher from this triple top in both the S&P 500 and DJIA.

If you’ve been with us for a while, you know that we’ve expected a full on momentum/liquidity fueled breakout in not only the equity markets (domestic & global) but also in assets like precious/base metals, oil/gas and Bitcoin. We are witnessing coordinated momentum breakouts, fueled by a staggering level of global liquidity. VRA Investing System readings (10/12 Screens bullish), along with rock solid market internals, continue to confirm our beliefs.

To crush Mr. Market, we must: a) be on the right side of major moves in the broad market, b) be in the right markets/sectors/stocks and c) be positioned for maximum leverage and exposure.

Bearish Sentiment Continues to Shock

The fact that this breakout is occurring at the same time that investors (both individual and institutional) are across the board bearish, only helps to cement our bullish, contrarian case. When everyone is going left, we want to go right.

AAII sentiment continues to be bearish. Stunning! 29.6% bulls to 32.1% bears. 7 weeks in a row that bears have outnumbered bulls. Again, highly bullish for our markets. A contrarians delight.

 

 

What’s happening now…and we see this as just the early innings…is the beginning of a multi-year move higher that will take the Dow Jones to 50,000+, gold to $3000+ and Bitcoin to ? (who knows…but much higher) by the end of Trumps second term. If Trump were to lose in 2020, the markets will crash lower…and we will quickly flip from bullish to bearish. Not hyperbole…not a political statement…just a reality of the significance of having a president that knows what it takes to grow an economy. The Trump Economic Miracle is playing out right before our eyes.

The free market capitalism/populism/nationalism movement actually started before Trump. First up, Poland and Hungary acted in defiance of the EU (saying no to forced migrant placement)…then they elected strong, country loving, populist presidents. Then Brexit…then Trump…followed by populist leaders that were elected in Italy, Czechoslovakia, Brazil…even Australia is kicking globalism to the curb.

The economic significance of the VRA’s bullish macro case continues to be underestimated. In a world driven by free market capitalism…lower taxes, less regulation and smaller government…the entrepreneurs animal spirits are unleashed. Entrepreneurs create high paying jobs. They replace the power base previously controlled by big government, globalist elites. We see this as a long term, hugely bullish global macroeconomic & geopolitical development that could result in the strongest global economy of our lifetimes.

GOLD & MINERS UPDATE

We continue to be long and strong gold and miners. As seen in both gold and GDX below, they sit at extreme overbought levels, but the breakout is very, very real. Keep buying pullbacks. We’ll add NUGT soon. Over the last month, gold is +13% and GDX is +29%. The leverage is in the miners…and the miners are leading the way higher. Again, exactly what we want to see. Over the same time frame, our top gold pick is +48%. A monster move higher is directly ahead.

 

Lastly, I’ve received the following story from many of you this week. Merrill Lynch caught criminally manipulating precious metals. Once the manipulation of precious metals comes to an end, parabolic moves higher await.

https://www.zerohedge.com/news/2019-06-25/merrill-lynch-caught-criminally-manipulating-precious-metals-market-thousands-times

Until next time, thanks again for reading…have a great weekend.

Kip

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

Join us for two free weeks at VRAInsider.com

Sign up to Join us daily for our VRA Investing System podcast

Also, Find us on Twitter and Facebook

Thursday
Jun202019

The Parabolic Melt-up Move Higher is Here. All Time Highs in US Equities. 5 Year Highs in Gold. Just Getting Started.

Following Wednesday’s Fed meeting, where J Powell finally admitted that the Fed got 2018 completely and terribly wrong, US equity markets are celebrating the Fed’s apology this morning. DJ +230 with precious metals and the miners breaking out across the board. All time highs this morning in US equities and 5 year highs in gold.

The parabolic melt-up move higher that we’ve been expecting is here. This is why we own our 3 x leveraged ETF’s (learn what they are with our 2 week free trial at vrainsider.com). We want to be on the right side of the market with maximum leverage and exposure to the highest returns possible, using dollar cost averaging to build our positions. I have no interest in keeping up with the market. I want to crush Mr. Market, absolutely and completely. It’s the VRA approach to funding our financial goals.

Let's jump back to the Fed for a minute. Ok, Powell didn’t actually apologize. Not literally. But come on…we all know how grade schoolishly wrong the supposed best and brightest economists at the Fed have been. With their track record, should we really be surprised?? No…we should not.

Once again, like it or not, Trump had this exactly right. US interest rates should have ALWAYS been lower. As in, much lower, as we’ve made the case here at the VRA for some time.

Gold traded as high as $1395/oz overnight. 5 years highs. Just getting started. Last trade here $1385, +$35. GDX (Miner ETF) has broken out as well. Last trade here $24.80, +3.4%.

This 8 year chart of GDX tells all. GDX has broken a primary downtrend line, which now serves as support. There’s a triple top at $25 that has to be dealt with and we’ve reached extreme overbought levels on stochastics, meaning a further ST move higher could be constrained. And volume…its building…but its nowhere near the volume we saw in the 2016 breakout (which we called *exactly*). Bottom line, gold/silver and the miners have now officially broken out.

Remember, in bull markets of scope and size…like the one that is beginning in PM’s… we want to own the highest leverage plays possible.

Long and strong folks…long and strong. This will be the PM/miner bull market of our times.

VRA Investing System Upgraded to 10/12 Screens Bullish.

It became clear this week that an upgrade to 10/12 bullish screens was in order (from 9/12 bullish screens, which had been the reading since late January).

Below are the 12 VRA System Screens, 70% fundamental and 30% technical. All 8 of our fundamental screens are now bullish. A more accommodative FED plus all-time highs in market internals (breadth), combined with a booming US economy place all fundamental screens in the bullish camp.

Our technical screens had been a bit of a mixed bag of late. Then, earlier this week, the Russell 2000 broke through its 200 dma on solid volume, as the broad markets confirmed the move with 1%+ moves higher across the board, led by technology and industrial stocks, with stellar internals of 3:1. Just what you want to see, assuming you are bullish. We could hardly be more bullish.

While our short term momentum oscillators (stochastics) are hitting overbought readings, we have yet to see euphoria spill over into RSI and MFI. We would like to see the transports trade better…this important group remains beneath its 200 dma, albeit by just 1.5%.

The VRA Investing System tracks fundamentals, technicals, internals and investor sentiment. Investor sentiment continues to give us our most bullish readings of all…what follows is shocking to me. In my 34 years, I’ve never encountered anything quite like the sentiment readings we continue to see today. Contrarians the world over are salivating at these readings.

STUNNING REPORT: MONEY MANAGERS HAVEN’T BEEN THIS BEARISH SINCE 2008

The biggest story that few have seemed to pay attention to is investor sentiment, and just how bearish it continues to read. We see it weekly in our sentiment surveys, with AAII sentiment readings of just 29% bulls that have made us say “Are you serious?? Back up the truck and buy, buy, buy.”

Then Tuesday…and everyone IS talking about this…we learned that the BAML survey of money managers reached its most bearish reading since the 2008 financial crisis. Just a stunning report, with markets just 1% away from ATH.

Here’s the breakdown of what we continue to view as BIZARRE readings. But then again, we also know that 90% of all money managers get beat by the markets each year. Maybe we shouldn’t be so surprised.

Equity allocations saw the second-biggest drop on record, while cash holdings jumped by the most since the 2011 debt-ceiling crisis, the June poll showed. Concerns about the trade war, a recession and “monetary policy impotence” all contributed to the bearish sentiment, Bank of America said.

https://www.bloomberg.com/news/articles/2019-06-18/investors-with-528-billion-haven-t-been-this-bearish-since-2008

And I’ll just leave this here. Still more bears than bulls. Stunning. HIGHLY bullish.

VRA BOTTOM LINE: with 10/12 screens bullish, this makes investing on pullbacks that much more important. Pullbacks should be short and sweet, going forward, as the markets surge to new all time highs and the Dow Jones targets 30,0000 by year end (12% higher from current prices).

We remain aggressively long this market. It’s crush Mr. Market time.

Finally for this morning, if you heard Tyler’s podcast yesterday you know that we just wrapped up year #1 with podcast #251. We hope you’re enjoying them and we always appreciate your feedback. 

VRAinsider.com/podcast

Until next time, thanks again for reading…

Kip

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

Sign up to Join us daily for our VRA Investing System podcast

Learn more at VRAInsider.com

Also, Find us on Twitter and Facebook