"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
Apr112019

Earnings, Share Buybacks and M&A Will Continue to Power Forward. Investor Sentiment, Bulls Returning. Global Bull Market, Fully Intact.

Good Thursday morning all.

A solid reversal higher yesterday, even in light of our extreme overbought conditions. VRA Market Internals moved back into solid territory, though not as solid as the negative readings that we saw on Tuesday.

Still, 10/12 VRA Investing System screens remain bullish. This still looks to be a pause…

We did have 1–2% weakness overnight in Chinese markets, but again, their markets had reached a nearly identical level of overbought as ours. This morning, futures are slightly higher. Tomorrow, we kick off Q1 bank earnings…then the pace picks up next week…followed by the full onslaught of earnings releases the following week. With earnings reports, many/most of the reporting co’s can also resume their share buybacks.

Remember, in 2019, the estimates are for more than $1 trillion in share buybacks along with $5 trillion in M&A activity. Combined, we’re talking about a (continued) massive level of share reduction from US markets. This is ECO 101 folks…”as supply decreases, assuming demand stays the same or rises, prices must also increase as well”.

Our permabear friends seem to struggle mightily with the basic law of supply and demand. But its a powerful, powerful force…one that continues to serve as underlying foundational strength for this bull market to soar, for years to come.

As we’ve discussed the last few days, our markets have reached extreme overbought. This is merely a short term warning sign…has no impact at all on our views otherwise…merely a timing issue.

Here’s the deal; we have restricted share buybacks due to the blackout period just prior to earnings releases. But once these co’s report their Q1 earnings, those buybacks will resume. Banks begin reporting on Friday, but the majority of our major S&P 500 components don’t start report for another 7–10 days. We have a lull…a pause…but I fully expect that will be about all that it is. At most.

INVESTOR SENTIMENT UPDATE

Here are our investor sentiment reports, both updated as of last night. First, we see that in the AAII survey, bulls have increased to 40%, with bears down to 20%. As we’ve been discussing, this is the beginning of euphoria returning to the markets. This is 1997/1998…just as the dotcom boom was finding its footing. Before this bull market tops, bulls will hit 65–75% readings, for months on end. Thats been my forecast for the last 2+ years…its been spot on accurate…take it to the bank. But to be clear…no, the move higher will not be straight up…it never is…trees don’t grow to the skies, overnight.

Take a look at the long term chart of the bullish percent from the AAII Investment Sentiment Survey, my go-to sentiment survey for 30 years. Today, bullish percent sits at just 40%. How remarkable, with the move higher we’ve had, that bulls are at just 40%.

As you can see, major bull markets (like this one) do not top until bulls hit 65–75%, and remain there for an extended period, We will not have a final market top until euphoria returns. I see that as being years away. DJ 35,000 by end of 2020. DJ 50,000+ by end of 2024.

And here's the updated Fear and Greed Index, which now sits at 69. Greed has returned….but we’ve also seen this reading hit 90% + many, many times over the recent years. And who can forget the 12/24 Christmas Eve massacre reading of TWO! All-time low….thats how we knew that big time lows were in place. Our view remains the same; just as the March 2009 lows were THE lows, which we’ll likely never see again, we believe that the 12/24/18 lows will prove the same.

Finally, please join us daily for our VRA Investing System Podcasts! Sign up to receive instant updates once our recording is completed at www.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.

Learn more at VRAInsider.com

Also, Find us on Twitter and Facebook

Thursday
Apr042019

Bull Market of a Lifetime. Are You Ready?

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 am 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? Trump's tax reform, deregulation 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. It's the very psychology of human nature and the markets.

Historic Bull Market

We have entered what will one day be remembered as one of the greatest bull markets in history. We get (maybe) 1–2 bull markets like this in our lifetime. In addition to the many VRA Updates you’ve seen from us, forecasting a “super bull market” (yes, that's a thing) since Trump was elected, I have one primary reason to be bullish that only reinforces my research;

Almost no one is saying what I am saying. No one (that I know) has been predicting Dow Jones 50,000+ by the end of Trump's second term. And yes, Trump must first win. If not, we will NOT see DJ 50k. Maybe never in our lifetimes. Bull markets don’t fare well in socialism.

The VRA has been mega bullish while the overwhelming majority of Wall St gurus and CNBC sages were bearish, with many/most experts predicting that Trump would bring about the end of the world (only a slight exaggeration). But we saw it differently. We continue to see it differently.

As a life long contrarian, I know two things; the majority is almost never right. The minority is almost always right.

And folks, don’t think for a second that’s an accident. The media (print, tv, social) is owned by the elites (duh). The media wants the public (sheeple) believing exactly the wrong thing. Most everything we see and hear is propaganda. Propaganda designed to influence our decision making so that the elites profit from our group thing. Our wrong think.

My mentor Michael Metz (RIP my friend) would literally laugh out loud at news stories. Breaking news was like great comedy for Mike. He taught me to question everything about Wall Street, most especially the analysts and their cozy relationship with investment banking. That Chinese wall that's supposed to separate the two? HAHA, he would say.

Mike knew that the big profits were made by contrarians. By those that didn’t buy into the propaganda. Just a few months before the dot-bomb began (late ‘99), Mike had me re-read “Extraordinary Popular Delusions and the Madness of Crowds” written by Charles McKay in 1841. Like a lightning bolt I knew that dot-com mania would end just like tulip-mania. Shortly thereafter, I got my clients out of the market, saving them $20–30 million in losses they otherwise would have had.

My original copy sits on my desk…a reminder to ignore the herds. Trust your instincts. Question everything. A great read…highly recommended.

My primary point this morning is that the media elites, through their 24/7 “Fear Everything” media and paid permabear scammers, continues to scare investors into believing that the sky is falling. Keep your money in safe investments. Stay in money markets or CD’s. Do anything but trust the stock market.

WRONG.

Look, the move higher won’t be straight up. Our December aberration proved that. But its sell-offs just like that that scare the public that much more. As we’ve covered this week, fund managers have their lowest exposure to stocks in 2.5 years. The supposed smart money (they aren’t) is paralyzed. Now they’re being forced back in. This is when big moves higher occur. Exactly like this.

VRA BOTTOM LINE: stick with us here at the VRA. We are locked in. Locked and loaded. We want all of you here with us for the rocket ship move higher that's dead ahead.

This is the beginning of FOMO. Mutual funds, hedge funds, sovereign wealth funds and institutional money managers are on exactly the wrong side of this market. Their risk exposure sits at 2.5 year lows, meaning they are vastly underinvested in equities.

Now, they are forced to play catch up. The Fear of Missing Out is beginning to consume them. They want to keep their jobs and fat bonuses and they are lagging the broad markets badly.

This is the very nature of funds that run $1 billion+. Decembers like we just had scare the sh*t out of them…so they sell. As the market recovers and moves higher, fund managers remain stuck in their bond and money market positions…paralyzed.

Over my 34 years I’ve seen this movie play out more times than I can tell you. It always ends the same. Just as the markets have screamed higher…over the course of many months…fund managers have finally returned, fully invested and as bullish as ever.

And that’s when the rug gets pulled. Mr. Market loves crushing fund managers, which is why they rarely beat the market. Folks, once fund managers return aggressively on the long side, we will be taking profits. The VRA Investing System will have us prepared to act.

It’s my belief that Q1 earnings will beat their already lowered estimates. Handily. Regardless, its the action that matters, rather than the news. As we’ve seen this year, regardless of what the negative news has been, this market has powered higher. Few market tells are more bullish.

This morning I’ll leave you with a few charts.

 HGX (Housing Index). Housing plays a major role in the VRA Investing System. If you heard the CEO’s of Lennar and KB Homes this past week, talking about the strength that they see moving forward, then you know that the US economy is primed to surprise the naysayers, once again. This chart confirms what those CEO’s are seeing:

Well above the 200 dma. Golden cross just occurred. Housing is a leading indicator. Good times, directly ahead.

IWM (Russell 2000 ETF). Small caps have been the laggard, as each major index has surged higher. IWM remains beneath its 200 dma but appears ready to start playing catch up. Everyone and their brother is watching this chart. A move back above the descending line below should send IWM back up and through its 200 dma.

Everything else about this chart looks excellent. Once IWM breaks through the 200 dma it will be a quick trip back to the August highs.

FXI (China ETF). As we can see below, it’s been on a tear this year, but again, few fund managers own Chinese stocks…believing that a failed trade deal will doom their debt-ridden economy. We believe they are wrong. I like everything about this chart. Yes, there is resistance in the $46–48 range, but RSI, MFI and stochastics are flashing buy signals. Continue to buy.

GDX (mining ETF) continues in its bullish channel. In fact, it's now at the lower end and should move higher from here. It’s also reaching heavily oversold on stochastics. It’s important that volume appears on its next move higher…that's the one element that's been missing.

OIL. WTI is at a 5 month high, and while ST overbought, it looks to be breaking out from its bullish channel. Clear sailing to $70 as the global economy is recovering much quicker than the gurus have yet to discover. 

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.

Learn more at VRAInsider.com

Also, Find us on Twitter and Facebook

 

Thursday
Mar282019

The Emotions of Investing…Nothing is More Important. VRA Approach to Crushing Mr. Market.

Good Thursday morning all. Wayne Gretzky said it best; “a good hockey player plays where the puck is. A great hockey player plays where the puck is going to be”.

As active investors, we want to crush Mr. Market. We have a strong desire to build our investment portfolios for a fully funded retirement account. We cannot do that if we skate where the puck is.

If we listen to the MSM, filling us with this fear, that fear, or the other fear, we’ll forever be buying when we should be selling and selling when we should be buying. We’ll forever be skating to where the puck is.

After doing this for 34 years I can tell you that it took me (at least) 10 years to get a handle on this most important subject. Understanding and controlling the emotions of investing. Nothing is more important. It’s a constant battle. Investing is as much art as it is science…artists are known for being temperamental and emotional…and nothing makes us more emotional than our money.

Think back to December. Investors sold out right at the lows. We know this because equity fund outflows hit an all-time record. Much of this selling occurred just as the Fear and Greed Index was hitting 2…yes TWO…another all-time record, indicating fear had gripped investors even more so than during the ‘08–09’ financial crisis. Remarkable.

If you were here with us then, you know that we were pounding the table to “buy buy buy”. We said exactly this during the last half of December, the worst since the Great Depression, and we said it often.

Investors that bought stocks in late December have massive gains to show for it. Unfortunately, that's not most investors. And even more unfortunately, this is how investment portfolios get wiped out…frequently.

I know, because I’ve done it myself. Tough lessons learned are always the best. Those lessons led me to the creation of the VRA Investing System. They led to getting my clients out of the market in late 1999, just before the dot-bomb, saving them $20–30 million in losses. They led to my warnings to everyone that would listen, beginning in 2006, at 100+ events all over the world, that “the coming financial crisis could wipe out stock markets and drive housing prices into the ground”.

And they led to my bottom calls in March ’09 and this past December. I’ll repeat, both bottoms will be all-time lows. That's how we played it in ’09 and that’s how we’re playing it now.

Where are investors mindsets today? Check this out…as Bloomberg reported this morning, even as global equity markets have gained $9 trillion in value this year, investors continue to pull money from the markets.

Remarkable. Even as our markets have surged higher, investors still aren’t believers. Fear continues to grip them. Our fake news financial MSM has much to do with this, along with the permabears that have taken over social media. Combined, investors have a level of anxiety that may be the highest yours truly has ever witnessed.

But folks, don’t believe it. It is one big psyop. And it’s designed to keep investors afraid and in cash. But trust me on this; as the markets continue to move higher. our financial press will start to become more bullish. We’ll hear them begin to whisper about the global economic recovery. Then, as the DJ crosses 30,000, we’ll hear them start to say “hey, maybe the good times are returning”. Then, as the DJ crosses 35,000, we’ll hear them join the VRA’s major global macro point of “wow…it does appear that populism/nationalism is better than globalism.”

Check out our VRA Daily Podcasts to learn more on this

Then, likely in 2023–2024, as the DJ approaches 50,000, literally everyone and their mother will be wildly bullish on stocks. We’ll hear “100,000 DJ is even possible”!

And that’s when we’ll be selling and taking profits. It’s the very nature of investor sentiment…the very nature of fear and greed…the very nature of the emotions of investing.

VRA MARKET & SYSTEM UPDATE

10/12 VRA Investing System screens are bullish. Ignore the list building clickbait permabears. And please, ignore the 24/7 “yield curve inversion is taking the US into recession” bears.

We covered this often when it first popped up last year, but here’s the bottom line, once again; yield curve inversions are only so-so when it comes to predicting a recession. But even when they are accurate, the stock market continues to rise for “at least” 1 year.

Take a look at the S&P 500 chart below, which illustrates each time the 10 year — 3 month yield curve has inverted. Since 1982, the inversion has led to two steep market drops and recessions. Sounds pretty bad, right? But take a closer look. The first inversion that resulted in a recession took place after 9/11/01. The second took place after the 08–09 financial crisis. In other words, yield curve inversions aren’t the boogeyman the financial MSM wants us to believe they are. Not even close.

And this solid piece of research from our friend, Troy Bombardia. What we’ve just witnessed, from the 3 month sell-off and v-bottom 19% move higher, has occurred just once in 30 years. The last time? Right at the 2009 bottom. Our view has been, and remains, the same; we called the 09 bottom within 5 minutes. We believed that would be all-time lows. We also called the 12/24 bottom…and we believe it will also represent all-time lows. If you’re not long, you’re almost certainly very, very wrong.

US and global markets are headed much higher.

Using yield curve inversions as a stock market timer has been among the very worst strategies in the history of investing. Period.

Finally for this morning, we’re about to wrap up the best Q1 for S&P 500 since 2009 (+12%). Highly bullish for the rest of the year, with 9/10 occurrences since 1950 ending with even higher S&P 500.

We also know that the markets have been higher in April for 13 straight years.

Long and strong.

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

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.

Learn more at VRAInsider.com

Also, Find us on Twitter and Facebook

Thursday
Mar212019

VRA Portfolio +38.3%, Crushing Mr. Market. VRA System Update. The Fed Goes Full Dove. If You Are Not Long, You Are Wrong.

Good Thursday morning all.

With just over a week to go in Q1, here are our updated VRA Portfolio results:

VRA Portfolio: +38.3%

S&P 500: +12.7%

VRA outperformance (vs SPX): +292%

VRA annualized return: +152%

We only own 10–12 stocks at any one time. We want a focused/concentrated portfolio, one that we can apply monthly dollar cost averaging to, allowing us to build sizable positions. We want to crush Mr. Market (make no mistake, he loves crushing us).

VRA Market/System Update

Yesterdays Fed meeting has the “recession is coming” permabears out in full force (again). J Powells Fed effectively admitted that 9 straight rate hikes was a mistake (Trump was right). Powell also announced plans to cancel QT, or quantitative tightening (Trump was right). And Powell announced that the Fed would not hike rates again this year, with just one hike likely by end of 2020 (Trump was right, again).

We continue to find the bears negativity remarkable. The VRA Investing System remains at 10/12 screens bullish. But, the bears are fixated on this chart….10 year yields…which have now crashed to a new annual low of 2.5%. To the bears, this signals “recession” is nearing. Trust me, we are watching this closely as well. But just as we told you last year that rate hikes would end, we’re telling you now that a 2.5% 10 year is not the sign that recession is nearing.

Know this; foreign money is flooding into US debt markets. With 0–1% govt debt yields in Japan/Europe, who can blame them. 2.5% in US govt debt is a slam dunk! Important news that we’re barely hearing in the financial MSM.

US Dollar

3 weeks ago we told you that the US dollar breakout was likely a false breakout. The ramifications of a lower dollar are bullish for the VRA Portfolio positions in precious metals, miners and oil/energy stocks.

You know our thoughts. Dips must continue to be bought. US and global markets are headed much higher.

We see more technical evidence of this (below) in the chart of the Dow Jones. Last week we focused on the inverse head and shoulders pattern in the S&P 500. Low and behold, we see an inverse head and shoulders in the DJ as well. Not as perfectly defined as we saw in SPX, but an inverse H&S none the less (marked by small blue circles at top right).

But here’s what we’re focused on right now. The DJ just experienced a golden cross. A golden cross occurs when a short term moving average crosses over a longer term moving average. There are many types, but the most bullish (by far) is when the 50 dma crosses the 200 dma.

Personally (and this is backed up by data as well), I find golden crosses more useful in individual stock patterns. But folks, anyone that tells you a 50/200 golden cross is not a useful tool is almost certainly a permabear. Either that, or they’re just trying to play devils advocate. We’ve had 5 golden crosses in the DJ over the last decade. Each has produced higher prices over the next 6–12 months.

Check out how the DJ did following its last 50/200 golden cross, in April, 2016. What we see below is a 50% move higher, from the April ’16 golden cross to the peak in October of last year. So yes, golden crosses are a valuable investment tool.

What we also see above is a full on buy signal in the DJ, according to the VRA Investing System. Each technical signal (RSI, MFI and stochastics) is flashing buy. We should get a fresh MACD buy signal in the next 1–2 days as well.

If you’re not long you’re wrong.

If you were with us last October, you’ll recall this chart and market analytics.

Since WW2 (1946), the S&P 500 has been higher 1 year after the midterm elections “every single time”. That’s 18/18 with an avg gain of 14.2%. Currently, the SPX is up just 2% following the midterms. We like repeating patterns a great deal. Most certainly those that have been 100% accurate since 1946.

One more time, for about the 105th time since Trump was elected, “if you’re not long, you’re almost certainly very, very wrong”.

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.

Learn more at VRAInsider.com

Also, Find us on Twitter and Facebook

Friday
Mar082019

VRA Weekly Update. VRA Investing System Podcast Hits 20,000 Listens, Golden Crosses Abound

Good Friday Afternoon all. When Tyler came to me last year with the idea to start recording a daily podcast, my first reaction was “so you want to add to our 12 hour work days?”.

But Tyler is relentless. Would not take no for an answer. So I agreed. I honestly believed that with countless thousands of podcasts already in existence, this might be a short lived project.

But the numbers continued to build. Now, with hundreds listening to our end of market podcast, we’re locked in and having a blast with it.

Tyler shared the following with me yesterday. We’ve reached 20,000 total listens…

Thanks to everyone thats been listening! And Tyler, thanks for being relentless.

Give us a listen at VRAInsider.com/podcast

Market Action

Futures pointed to a lower open as we had weak futures trading overnight leading up to this morning’s economic reports where we had a bit of a mixed bag.

On the top line non farm payrolls missed big on estimates coming back with only 20,000 job gains compared to estimates of 173,000. However, wages beat expectations coming back at .4% compared to .3% estimates, and a very important indicator, the unemployment rate came in today at 3.8%, continuing the strongest job market in over 50 years, beating estimates of 3.9%

Futures are further under pressure after the news this morning, but there were more positive numbers to look at as housing starts for January came back strong with gains of 18.6% v. the estimates of 9.5%

Housing has been on a great run as well since the 12/24 capitulation, and similar to our markets has taken a pause in the last weeks after reaching overbought conditions. However, we continue to see strength in this sector, as it is now at approaches oversold levels, we fully expect to see this rally higher continuing.

Golden Crosses abound

As Kip mentioned in Yesterday’s Podcast all four of our major indexes are approaching what is called a golden cross, and I wanted to take you through a few very bullish examples of this we are seeing right now.

A Golden Cross occurs when a shorter term moving average moves above a longer-term moving average. In this case for our indexes, the golden cross is happening with the 50 day moving average about to cross the 100 day moving average. While this may not the most bullish golden cross that we could see, that would be the 50 day crossing the 200 day, in this scenario we are still seeing a highly bullish pattern, confirming the strength of the current uptrend.

I’ll spare you from having to look at each chart of our major indexes, as once you see one you will always know what to look for, and right now all four of our major indexes are in very similar patterns. What we are looking for here is the blue 50 Day MA crossing above the red 100 day MA.

For an example of a true golden cross take a look at the Emerging Markets ETF (EEM) as we are about to get the most bullish golden cross with the 50 day crossing the 200 day… more on China and emerging markets in a second.

I also wanted to show an example of how the golden cross can have an impact. This is one of the highest probability trading signals because so many people watch it, and since so many people trade it, it becomes a self-fulfilling prophecy. This chart is particularly relevant as we have been pounding the table that now is the time to own Gold and the miners for weeks now.

GDX had a true golden cross in earlier February and take a look at how it jumped once crossing this important technical indicator. Important note, on the poor jobs report, gold is +$13/oz with GDX up another 1.75%, on top of yesterdays 1.25%

Going back to Emerging markets and China, we have one last golden cross chart, FXI, which is right at a golden cross as we write. Continue to aggressively add to positions here as, similar to GDX, we expect to see a big move higher once we get through this golden cross.

I will say quickly here we did see some poor performance overnight from Asian Markets as the Shanghai composite fell 4.4%, it’s biggest single day loss since October. The Hang Seng was also down 1.91%, but it’s important to remember, Asian markets have been red hot to start the year, actually up higher than U.S. markets, so to see a pause in action is not terribly concerning yet.

U.S. Dollar

Changing gears here to a more fundamental factor, which had a big day yesterday, the U.S. Dollar. This is important for many reasons, but most relevant right now is that a strong U.S. dollar is a major headwind for trade and commodities. We have seen a pull back in Gold and Silver partially in part due to the strength of the dollar.

President Trump has been speaking against the over performance of the Dollar for months now. Not that he wants the dollar to crash but rather have a stable currency. Here is what he had to say just this past weekend, “I want a dollar that’s great for our country but not a dollar that’s prohibitive for us to be doing business with other countries.”

So called “experts” are saying there isn’t much that Trump can do about the currency value, however, I will point out that this is exactly what the “experts” said about Trump influencing Interest Rate hikes. What happened when Trump began harping on the FED? The FED held off of Interest Rates.

As you know, we’re highly bullish on precious metals and miners. For the parabolic bull market that we envision, the US dollar will need to reverse lower.

Here’s Kip’s tweet from yesterday.

Now, take a look at this chart of UUP (US Dollar Index). Again, we believe this could be a false breakout.

Volume has been incredibly light (and getting lighter), versus its strong move higher last year (which interestingly, did not hurt gold/miners….in fact thats when their breakout above the 200 dma kicked in)

UUP is now at extreme overbought (RSI) and heavily overbought on stochastics. And MFI (money flows) have reversed lower, even as the USD moved higher.

Again, this looks to be a false breakout. Here’s why a weaker USD is important. Foreign currencies (Europe, EM, China) have been crushed. This attracts short sellers in equity markets as well. 
And just as importantly to US investors, a strong USD is not welcome news to US multinationals, which in many cases do 50% of their business abroad. Dollar strength makes those sales more difficult.
And finally, as I mentioned, we know that President Trump wants a lower USD. He got his way with the FED and rate hikes….we expect a similar outcome with the USD.

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

VRA

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

So far in 2019, our average gain per position is over 35%, nearly tripling the S&P 500! Come join us at vrainsider.com for more details.

Also, Find us on Twitter and Facebook

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