VRA Weekly Update: J Powell with the Rare Win. Fed Meeting Bluster & Takeaway; $2.2 Trillion in Additional QE. Buy Buy Buy.

Good Thursday morning all. As we have covered in previous updates, as bad as J Powells track record is (once his pressers begin the markets immediately start to tank), JP actually scored a win yesterday. When he began speaking the Dow was -309 and Nasdaq -104, but by the close the Dow was -265 and Nasdaq down just -33. Not much of a W, granted, but a W nonetheless.

Markets are mixed this AM but off the lows. Gold got smoked below $1800/oz (last $1780), now trading below its 200 dma of $1843/oz. 
GDX (miner ETF) just broke its 200 dma at $36.54 (last $35.40). The golden cross in GDX has yet to produce the sharp move higher that I expected. I continue to look for that to take place.

Post Fed-meeting shake-outs are infamous, in both equities and metals, but they have a high probability of being just that…a shake-out only…with the primary trend quickly reasserting itself. 

We are buyers of every VRA Portfolio Buy Rec (Check it out with our 14 day free trial at VRAinsider.com). 

There’s been quite a bit of bluster from this Fed meeting but only 2 things really caught my eye; 

1) the Fed raised their inflation estimates this year to 3.4% from 2.4% (even as actual human beings know that inflation is running “at least” 10%)

2) there may be 2 rate hikes in 2023 instead of only 1

Did you catch that sports fans? We’re still talking about NO RATE HIKES for 2.5 years, and more importantly, there won’t be any tapering of the $120 billion of QE a month until “substantial further progress” has been made toward the Fed’s maximum employment and price stability goals. What does “substantial further progress” mean? Well, we don’t really know. 

But what does $120 billion x 18 months mean? We absolutely know that answer. It means $2.2 trillion in additional QE.

And where will it go? It will go into equities, housing, cryptos and commodities.

A couple of final points on the Fed and the eventuality of higher rates (sometime in 2023); history tells us that when the Fed starts raising rates, the stock market actually continues to move (sharply) higher through at least the 3rd rate hike. My mentor Ted Parsons (RIP Ted) called it “3 steps and a stumble”. Were Ted with us today, I think I know what he’d be doing; Ted would be backing up the truck to buy his favorite growth stocks.

And this is important…as we’ve been covering here, this melt-up bull market will continue to be led by tech, growth and momentum stocks. It’s not that we don’t love value stocks too (we’re 60% growth, 40% value in VRA Portfolio), it’s just that we know the personality of a melt-up bull market (like the 1995–2000 melt-up that took the Nasdaq 575% higher over just 5 years), and major moves higher like the one we’ve had and will continue to have will be led by tech/growth/momentum.

The Truth About Inflation and “The Actual Big Lie”

The entire debate about inflation being “transitory” is such incredible bullshit. A heaping pile of gas-lighting and lies. This debate is nothing more than a massive red herring, as the CPI has NEVER reported inflation accurately. As actual human beings, we of course know this, as we’ve been forced to pay rapidly rising costs for healthcare, housing/rent, education/college, elder care, rising and hidden taxes….ETC ETC ETC ETC…for year after year after year after year. 

So, give us a break when you wanna talk about inflation being “transitory”. This is the “Big Lie”. And why does everything cost more? Why do they lie to us about the truths of inflation? Because they’ll never admit the truth. Inflation has been destroying our way of life since the Fed was created in 1913. Since then, the US dollar has lost 97% of its value. It’s properly called “currency inflation”. THIS is why both couples in a marriage have to work, to bring home the same take-home money that just one salary would provide just 2–3 decades ago. Lets hear JP get into this subject matter in his next press conference!

If you’re looking for a great summer read, pick up a copy of THE book on the Fed and our fiat money; The Creature From Jekkyl Island, written by my friend of 20+ years, G Edward Griffin. Statues should exist for Ed.

Until next time, thanks again for reading…

Kip

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VRA Weekly Update: ATH's Beget New ATH's. Semis Are KEY. VRA Investing System Flashing BUY

Good Friday morning all. 

Yesterday's trading brought fresh ATH in the S&P 500 with the Dow and Russell 2000 less than 1% from ATH and Nasdaq starting this AM at 1.3% from ATH. And while yesterday's internals were nothing to write home about (meme wars), we continue to like what we see as the semis and Nasdaq/tech/growth/momentum stocks are leading the way higher. SMH (Semi ETF) +1.31%, Nasdaq +.78%. Textbook, really. 

As Tyler’s been known to say on our podcasts, “new ATH’s beget new ATH’s”…and he’s exactly right, as analytics prove that there is rarely a better time to invest than when markets are hitting ATH (no resistance!)> 

As we’ve covered in these pages, rather religiously, the 5/12 capitulation lows in semis/tech/growth have served as the springboard for this short covering move to new ATH’s. Since 5/12 (twenty trading days), SMH is up 13.4%. Semis lead Nasdaq, Nasdaq leads the broad market. 

What Happens Next in Semis is KEY

In the chart of SMH below we see a trend line that has served as hard resistance from those mid-Feb highs. Since then, on each rally attempt, SMH has lost the battle to the line, resulting in a series of lower highs.
This pattern must change, IMO, for Nasdaq/growth to continue moving higher and to hit new ATH’s as well. Here at the VRA we’re roughly 70% fundamental and 30% technical but this is one of those times that I’d say “price action truly matters most”. A move through $252 (preferably on strong volume) should help get the breakout in SMH cooking with gas. This morning SMH is trading at $251.30 (+.30%).

A breakout in semis would be a key technical event for bearish investors. A “throw in the towel” kind of moment. A melt-up like event in tech/growth/momentum could then kick in (I continue to expect that will be the case).

On the heels of ATH’s in SPX, our markets are looking higher this AM. Dow futures + 80, higher but quiet elsewhere. 

And here’s an interesting market tidbit. The last 5 Fridays have been green for the Dow and 10 of the last 11 have been green as well. 
Impressive! Investors bidding up markets headed into 2 days where they cannot unload their positions is among the most bullish of votes with their money an investor can make.

Our VRA Investing System remains at 10/12 screens bullish. Anything above 6/12 bullish screens means that we remain buyers on pullbacks. But 10/12 bullish screens means that we want to be “aggressive buyers on pullbacks” as we expect the markets to push sharply higher.

The VRA System has 12 Propriety Screens. Today, 10 screens remain in bullish mode. 1 Screen is in bearish mode (valuations) and 1 screen is neutral (market internals).

70% of the screens are fundamental and 30% of the screens are technical. Here’s the breakdown of our 12 screens:

VRA Quick Hitters:

1) GDX (Miner ETF): immediately following its golden cross (50/200 dma), GDX had a solid day yesterday with gains of 2.5%. We expect a sharp move higher in miners.

2) AMC (AMC). Combined (VRA and Parabolic) we’ve booked better than 300% profits in AMC in ’21 (+148%profits in VRA). But we’re not ready to buy AMC again. We’re looking for the “ideal” buy here…no need to rush. A shake-out in AMC (if we get one) should take AMC back to the mid $30’s (last $44.50) to give us a double bottom. 

Heres’ what happened yesterday in meme war stocks. Steep losses across the board. Of this group, at this point, I only have an interest in one stock; AMC. But also know this; gamma squeeze as an investment strategy is very real and its here to stay. It worked with Tesla, it worked with Gamestop and its working with AMC. Here at the VRA we intend to use this strategy to print profits in the months and years to come. Remember, this is “that” bull market.

3) Finally for this morning, its no secret that we remain hyper-bullish. Here’s some color on that via my Twitter account.

Until next time, thanks again for reading…

Kip

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VRA Exclusive: Wayne Allyn Root's REMARKABLE Interview with #45, President Donald J. Trump!

Good Friday morning. The VRA was proud to be the sole sponsor of Wayne Allyn Roots remarkable interview with President Donald J. Trump. Wayne, a dear friend going back some 18 years and a true American Patriot, sat down with President Trump for an exclusive, commercial free 30-minute interview, in what was a relaxed and candid conversation. Two smart friends having a high level discussion about a rigged election (the fix was in, as #45 explains), the events taking place today to uncover this massive fraud, the attack against all Americans and what we hold true, along with what the immediate future holds for Trump and our country. Fascinating. 

And Wayne did us all a big solid. He asked the question that so many VRA Members wanted to hear the President address (I REALLY wanted to hear this answer); Is Trump considering running for a US House seat in the mid-terms next year?? A strategy that Wayne and I (and many of you) believe would galvanize and excite R’s and Independents like no other. Should Trump win a House seat and should R’s take back the House (they would!), Trump then becomes Speaker of the House. All investigations and laws originate in the House. Can you imagine what Trump as House Speaker might look like?! Biden and the far left have no greater fear than Trump running in the mid-terms. And Wayne got Trump to listen to and answer this question for the very first time. Kudos Wayne!!

Thank you again Wayne. And thank you, Mr President! 

Share!

https://www.youtube.com/watch?v=xgLEFSn1mkk



Until next time, thanks again for reading…

Kip

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VRA Weekly Update: Anxiety Over Jobs Reports. But Rates Will Only Go Lower, Markets Will Only Go Higher.

Good Thursday morning all. Breaking news from the ADP jobs report this AM which came in at 978,000 jobs created vs estimate of 650,000. I can tell you that there’s some nervousness around the May jobs report that’ll be out tomorrow morning (8:30 AM EST), especially following last month’s huge miss. Estimates are for May are 670,000 new jobs with an unemployment rate of 5.9%. 

I have no clue about these month to month economic reports but I can tell you that the bond market is not signalling this as a “hot” economic report. The 10 year yield is back to 1.6%, even with this mornings big ADP beat. I continue to believe we’re more likely to see 1% yield on the 10 yr again before we see 2.5% (or even 2% frankly). 

We have a 40 year repeating pattern of lower interest rates and disinflation. That’s one helluva of a long term repeating pattern to contend with. 

And if you’re a bit of a conspiracy theorist (where the truth is found, more often than not) a poor jobs report would also make it (much) easier for Biden to sell his stimulus plans. BTW, the action in gold over the last month (+$40/oz, until this morning…gold is down $20/oz this AM) also points to weaker economic reports. Same with the dollar…consistently weak over the last 30 days.

Decent day in the broad market yesterday with each index posting slight gains and with positives across the board in our internals (below). Up-volume was a solid 72% in both NYSE and Nasdaq. 
And once again, primo readings on new 52 week high/low with 582 stocks hitting new 52 week highs to just 30 hitting new lows. 

I’m disappointed in the markets gains of the past 2 days. The readings we’ve had from our internals should have produced more to the upside. Not a reason to be concerned…just an observation. Dow futures are -175, Nasdaq futures -130. Pullbacks continue to be a buying opportunity.

The markets still look higher to us. Nowhere near overbought levels, except for the Russell 2000 which is approaching overbought. 
But Nasdaq, semis and Q’s have solid room to run. All momentum oscillators are still flashing buy signals.

And check out the Fear and Greed sentiment readings. 47…just barely out of fear levels. What?? How that’s possible with the S&P 500 less than 1% away from ATH is beyond my comprehension. But as a contrarian indicator I do know this is VERY bullish.

AMC: AMC just announced they issuing another 11 million shares. One might think the shares would be getting slaughtered on this news…not the case. Last trade $48. AMC is no longer a retail meme stock. This is a battle to the death between big dark money and global hedge funds. And we have the proof to back it up. 54% of yesterdays trading was from dark pools/whales/funds.

The gamma squeeze continues. The investing world has never seen anything like this.

VRA Bottom Line: we are actively looking for the next AMC, because folks, this is hot new investing strategy will almost certainly move from one stock to the next…likely for some time (months/years?). Keep your best ideas and new targets coming. But for now, its still about AMC. My money is still on the longs. $100+ is becoming more and more possible.

Finally for this morning as you may have seen late last night, via the FOIA process we’re now getting large email dumps of one Tony “Fauci the Fraud”. I’d say that the revelations are shocking (Wuhan lab, pointlessness of masks, dangers of experimental vaccines, censorship etc), but if you’ve been here with us over the last year you know that none of this surprises us. In March of last year we first reported the details of the Rockefeller Foundations 2010 document called “Lockstep”, full of the near-exact details we’ve experienced over the past 16 months, to use a pandemic to look us down, mask us up, jab us and destroy our small businesses…TO CONTROL THE GLOBAL POPULATION…gaslight us furiously along the way. 

Like climate change, like domestic terrorism, like racism/white supremacy and of course the applications of CV insanity….it’s all our fault. We did this to ourselves. Shame on us. 

We’ll cover more in the days ahead but if you saw our disgusting excuse for a leader yesterday, Biden took another opportunity to gaslight us yesterday….we’re all racists and white supremacists, don’t ya know. 

But know this….gaslighting is a tool used by those that want to dominate and control us. Full on authoritarianism. 

Gaslighting is a form of psychological abuse where the perpetrator tries to convince you that you can’t be trusted and that you’re probably even losing your mind. The perpetrator’s main goal is to gain power and control over you. The more someone can convince you that the problem is you and not them, the less likely you are to discuss it or ask questions about it. This is exactly what the gaslighter is banking on…that you will keep quiet, out of a feeling of shame. 

We don’t roll like that here at the VRA. America is the best country on planet earth, full of extraordinary people that love helping one another. 

We won’t allow them to deceive us over CV insanity…and we won’t allow them to gaslight us, regardless of the issue. 

The truth resonates…which is of course why our planners are desperate to shut us up. 

Until next time, thanks again for reading…

Kip

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VRA Weekly Update: Excess Liquidity and Surging Corporate Earnings = Liftoff. Semis Will Lead a major Market Move Higher Into June.

Good Thursday morning all. This feels as much like a goldilocks market as I can remember. You know the reasons we’re bullish…the reasons we’ve been aggressively bullish for the last 14 months…but its primarily about two issues. These are the most important two issues of any bull or bear market; liquidity and corporate earnings. And we’ve never had this much global liquidity. Not close And here’s a question we see few asking that we think is broadly important; Can you imagine where our equity markets might be without the “many” trillions in liquidity that have been diverted “away from stocks” and instead into Cryptos, SPAC’s, NFT’s, etc?

This excess liquidity is a clear sign of the massive move higher in stocks that awaits…and we have surging corporate earnings to back it up. As Evercore and Ed Hyman have been pounding the table, the markets do not peak until earnings peak. Their target for a peak in S&P 500 earnings? 2025+. Matches ours. We must remain long and strong. Certainly as we enter the last week of May (huge equity inflows), followed by the last month of Q2 and those massive Q2 earnings beats that are headed our way.

Our best bull markets are always led by tech. Each time we have a correction in tech the bears pounce, screaming that tech is dead. Hardly. Instead, many SPAC’s are dead…most never should have gone public, certainly not at their outrageous valuations. But now its time to focus on real tech…you know, the semis, Q’s and big tech. 

This chart of SMH (Semi ETF) is key.
SMH has a double top in the 258 range that must be dealt with but SMH has also broken up and out of its month long downtrend line…on BIG volume…and is now clear of every moving average that matters. It also has a new MACD buy signal and is light years from hitting overbought levels. If SMH can break through the double top at 258 (high odds), the target becomes $300, or 22% higher from here.

This may be the best Goldilocks market that I can remember in some time. Really think this is the case. First we had the big capitulation in tech stocks on May 12th (with hedge funds and fund managers puking up tech/growth and even going aggressively short…right at the lows), followed by last weeks capitulation in Bitcoin, giving us a great set-up as we head into end of month, featuring massive equity inflows and share buybacks as we kick off the month of June. 

And man is there ever a lot to be excited about in the month of June. It’s the last month of what will be the best quarterly earnings beats on record. This years Q2 comps compared to the CV insanity lows of Q2, 2020?? Holy melt-up, here we come. 

And this from Ryan Detrick. Really helps us with the quant side…the analytics point to a strong finish to 2021. 
When the S&P 500 is up more than 10% by the 100th trading day of the year (it finished +12%), the markets are higher 84% of the time with an average further gain of 8.6%.

And yesterdays internals were a smoke-show of bullishness. 3:1 advance-decline in Nasdaq with 76% up-volume. NYSE up-volume was an even bigger 78%.
And the Russell 2000 was up 1.9%. That’s important…small caps have lagged. Now, with tech leading once again, let the short covering melt-up move higher resume.

Precious Metals and Miners

We love us some gold, silver, copper and miners here. And it’ll be driven by this crazy amount of excess liquidity in place, negative real rates that continue to get more negative and never before seen levels of currency inflation, AKA fiat currency printing. 

3 years ago the VRA began targeting MUCH lower interest rates, even as the 10 year yield was hitting 3.2% and PHD economists were warning of 5%+ yields. But we saw negative rates in Japan and Europe and new that it was a physical impossibility that US rates could remain anywhere near 3%. Simple gravity. Frankly not even a bold call. But when I announced that our target for the 10 yr was sub 1% yields I was essentially laughed out of the room.
Of course we were right, as the 10 yr fell below .50% near the depths of CV insanity. 

And folks, the story really hasn’t changed all that much. Europe and Japan still feature negative rates and yes, gravity is still a thing. 

Next up; even as tapering by the Fed begins, watch as rates go even lower. Those same PHD economists will excuse it away by saying “without as much QE of course the economy will grow more slowly….hence lower rates for longer”. It’s coming folks…just remember where you heard it first. 

And the lower rates will send precious metals and miners to the moon. 

VRA 12 month targets: Gold: $3000/oz, Silver: $50/oz.

We must remain long and strong. The VRA Portfolio of 60% growth and 40% value feels right to us. Crush Mr Market right.

Until next time, thanks again for reading…

Kip

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