"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

Friday
Feb222019

VRA Update: Markets Look to Finish the Week Strong. Big $19 Billion Dollar Hostile Takeover in the Mining Sector. W.A.R. NOW Interview.

Good Friday morning all,

It is shaping up to be an exciting end to what has been a relatively dull week for our markets. We have seen small trading ranges for our indexes this week as the market and investors were looking for a clearer outlook from the fed and potential resolutions to China trade discussions. We look for these conflicts to be resolved and as we have said here often, never short a dull market, therefore, we must be long.

We received confirmation of the Fed’s pause this week in their February minutes, as the FOMC voted to keep its benchmark interest rate target at 2.25 percent to 2.5 percent, and indicating it will take a “patient” approach to further policy moves. Five more Fed officials are due to speak today, but should follow the report we received on Wednesday.

As for the trade talks, Trump is scheduled to meet today with China’s top trade official, Liu He, with only one week left to the March 1st deadline it is looking positive that both sides will make concessions that will at least continue the truce on tariffs so that further negotiations may continue after this deadline. As we have said for over a year, this was never a trade war.

The Shanghai (+1.91%) and Hang Seng (+.65%) are both up overnight here, pointing to a positive outlook from Asian investors. Our China buys are up over 4%.

All four U.S. indexes are also trading higher as I write, and this is an important day for our markets, as you can see from the chart below of the S&P 500, we remain at overbought conditions in nearly every category, but as we have said here long and often, there are few more bullish signals than a market that continues to head higher despite overbought conditions.



It is our continued belief that these are the pauses that need to be bought and these brief breaks are just what we need to keep our markets fresh, while also keeping the Fed from aggressively raising rates.

As you may have heard on Kip’s podcast yesterday (link), we did see our first day of negative Volume and Advance/Declines in our internals from some time now, but new highs to new lows still finished positive, and take a look at the internal charts below and they will tell you just how far we have come in such a short period of time since the December 24th lows.

As you can see here, Advance declines just hit a new all-time high on Wednesday, a key that we see as an important market tell which is, new highs begets new highs.

Percentage of S&P 500 stocks hitting new highs to new lows also now back rallying big back from the December 24th lows. This is the exact chart we looked at following the Decemebr 24th lows that told us the lows were in.

Bottom line: No one knows what is going to happen in the short-term, but we will continue to shout it from the rooftops, if you are not long, you are almost certainly wrong.

Gold

Big news from the mining sector as Canadian based Barrick Gold announces hostile plans to buy U.S. based Newmont Mining Corp for $19 Billion in one of the largest-ever mining deals.

After this gold rally which started in October, which has gold up nearly 12% since October 9th. This move has flown under the radar of most, but the movement in miners is even more impressive as GDX is up more than 26% in the same time period. Leverage is always 3–5 times higher in the miner

This piece of news makes it official, the mining sector is now red-hot! If you haven’t seen our research from earlier this week on gold and the miners, I encourage you to go back to our February 19th update and check out the incredible chart patterns we have seen in this sector. Gold is up marginally higher this morning, it has moved up right along with our markets over the last two months, and similar to our markets, we could see a little sideways action but this will be a precious metals break out.

Investor Sentiment

Investors continue to be on the fence about this market, take a look at the past few months of investor sentiment. Bullish sentiment is reaching the high end of the last few months worth of surveys, but we are nowhere near euphoric highs with bears/neutral investors still at 60%, while bullish investor sit at only 39%. We will say it again, this is just not how bull runs end, and it is our belief that sooner rather than later will be the time to break out of the sideways movement we have seen since the October highs and will send our markets back to new all time high territory

Finally, a big thank you to our great friend Wayne Allyn Root…aka WAR…for having me back on this week. In the segment prior to mine, Wayne was getting into his theory that the Mexican drug cartel has been a major source of funding for the Democrat Party.

The man is fearless. Always has been.

If you were with us here at the VRA in the days/weeks following the Las Vegas massacre, Wayne and I tag teamed the attack, exposing both the financial profits from 10/1 as well as the HIGH likelihood that ISIS was behind the attack.

But folks, I do not live in Las Vegas like Wayne does. Day after day, Wayne exposed the corruption that took place at MGM (owner of Mandalay Bay). Corruption at the very top of MGM, from both the CEO and Chairman. He did it in print (he writes a 2 x weekly column for the largest paper in Vegas) and on air (he has the #1 radio show in Vegas).

In fact, fearless is not a strong enough word to describe Wayne. Balls of steel and a possible death wish? Thats more accurate… :)

WAR is the freaking man. If you don’t already watch his nightly show on NewsMax or listen on radio, I can promise you he is far more interesting and accurate than anything you’ll see/hear on the networks.

You can find my complete interview here: https://soundcloud.com/user-640389393/kip-herriage-live-on-war-now-with-wayne-allyn-root-1

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

Kip Herriage

So far in 2019, our average gain per postion is over 40%, nearly tripling the S&P 500! Come join us at the Vertical Research Advisory free for 2 weeks!! For a limited time we are offering a 2 week free trial to the Vertical Research Advisory, visit vrainsider.com for more details.

Since 2014 the VRA Portfolio has net profits of more than 2400% and we have beaten the S&P 500 in 15/16 years.

Also, Find us on Twitter and Facebook

Thursday
Feb142019

Major Buy Signals: Paul Krugman is Bearish, Paul Krugman is a Buffoon. McClellan Oscillator Buy Signal. Investor Sentiment Buy Signals. Crushing Mr. Market.

Good Thursday morning all. What could be the most bullish signal for global stock markets and a resurgent worldwide economy?

Easy. NY Times economist Paul Krugman predicting a global recession, as he did over the weekend at an investment conference.

Krugman has long been a laughingstock of serious economists.

“Hey Kip, could you give us a couple of examples?” Hey, you bet…thanks for asking.

Here’s Krugmans quote about the internet proving to be less valuable than the fax machine. No shit…he actually said this.

Let’s travel back in time for a moment. Back in 1998, then an economic professor at MIT, Krugman predicted that the Internet wouldn’t be such a big deal by the mid-2000s and that its economic impact “would be no greater than the fax machine’s”:

The growth of the Internet will slow drastically, as the flaw in “Metcalfe’s law” — which states that the number of potential connections in a network is proportional to the square of the number of participants — becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.

In the same column, Krugman also wrote:

As the rate of technological change in computing slows, the number of jobs for IT specialists will decelerate, then actually turn down; ten years from now, the phrase information economy will sound silly.
And hey, we could stop here with Krugman, but its just too much fun, especially in light of the fact that the Herriage family is still trying to recoup the $380 we were forced to spend on Krugmans college economics textbook for Tyler. Having read through Krugmans monstrosity of plagiarism and far left propaganda, is it any wonder our universities have so ill-prepared our children for the real world.
Here’s Krugmans infamous quote, the morning after Trump was elected.
“It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?” Krugman said in his post. “If the question is when markets will recover, a first-pass answer is never.”
“We are very probably looking at a global recession, with no end in sight,” he added. “I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.”

Here’s Krugmans infamous quote, the morning after Trump was elected.So you see, when Krugman comes out with another prediction for a global recession, we have just one move to make. We must buy everything in site…aggressively. There is no clearer signal for a global stock market melt-up.Tune into our Daily VRA Podcast from earlier this week to learn more as to why this is a major buy signal

Major Buy Signals from the McClellan Oscillator and Investor Sentiment

This morning lets take a quick trip back to the Christmas Eve massacre 12/24 lows. We have a new piece of research to look at, but to make sense of it all, this is what I wrote on 12/26/18.

“This morning I’ll share the two most important market stats I see today. After the last 3–4 days of research, these two stand out more than anything else;

First, the S&P 1500 New Highs-lows index just hit -42% on Christmas eve. All time low (this stat dates back to 2010). Below we see what happened following the previous two lows (-37% in ’11 and -34% in ‘16). Each of these readings marked the lows for stocks, followed by moves in the S&P 500 to fresh all-time highs. Selling in the face of fear and panic is rarely a smart money move. This is a bear market in search of bad news. This is ridiculously overdone.

But this is likely the single biggest indicator that we’re either at or very near an important bottom…investor sentiment. The Fear & Greed Index hit 2 on Christmas Eve. TWO. A new all-time low (obviously).

VRA Bottom line; we’ve just had a 2 month version of the 1 day 1987 crash. At this point no one can say when it will end, except that we’re seeing the historical signs that the decline should stop here. This has been a structurally driven, algo based decline, fueled by an out of touch, tone deaf and hostile Federal Reserve. All this selling into a December air pocket. This market is at ridiculously oversold levels.”

— — 

What a 7 weeks its been. Of course, the lows of 12/24/18 marked THE lows. And just as we highlighted the S&P 1500 new highs/lows back then this morning we’re going to highlight the McClellan Oscillator, which is simply another way of looking at the VRA market breadth data we focus on regularly.

Below we see that the McClellan Oscillator (net breadth of NYSE advances/declines) has just flipped from -1000 to +1000 (which will occur officially today), for just the second time in the last 20 years. The previous occurrence was March of 2009, which marked THE bottom in the stock market from the great financial crisis.

In other words…this is a very big deal. it confirms what we’ve been discussing here daily, namely that the permabears continue to be on exactly the wrong side of this market. Readings like this have the power to propel markets higher by 20–30–40% inside of a single year. And with institutional cash readings also at their highest levels since March 2009, we have just one move to make here; we must continue to be long and strong.

And folks, should the Fear and Greed Index ever hit a reading of 2 again in our lifetimes, we must sell all of our worldly belongings and put every single penny into S&P 500 call options. Can we agree in advance to hold each other to this???? Just an fyi, its highly likely that no one reading this will even be alive the next time the Fear & Greed Index hits 2. Yes…it is that rare…as in, it had never happened in history (prior to 12/24/18).

And here’s last nights AAII Investor Sentiment Survey readings. Even with the massive move higher over the past 7 weeks, we’re at just 35% bulls with 39% of investors at neutral. Hard to put into words how remarkable I find these readings.

The VRA Investing System has been upgraded to 9/12 System Screens bullish.

  • Both the DJ and S&P 500 are now back above their all important 200 day moving averages (dma). Nasdaq and Russell 2000 are just points below their 200 day Moving Average
  • Our overbought status of last week has reversed.
  • The Federal Reserve is no longer an anchor.
  • Market leadership has returned to tech, growth and momentum stocks.
  • Insider buying and M&A activity will hit record levels again this year.
  • The forward P/E on the S&P 500 now sits below 15. Absurdly ridiculous coming off of 27% EPS growth in 2018.

And checkout this excellent analytics work from our friend Troy Bombardia.

After being more than 14% below its 200 dma, once the S&P 500 jumps back above the 200 day, the S&P 500 has been higher 100% of the time over the next 3–6–9–12 months. That’s 13/13 times with an average gain 1 year out of 17%.

If you’re not long, you’re wrong…very, very wrong.

Until next time, thanks again for reading…

Kip

Since 2014 the VRA Portfolio has net profits of more than 2400% and we have beaten the S&P 500 in 15/16 years.

Experience the Vertical Research Advisory free for 2 weeks!! For a limited time we are offering a 2 week free trial to the Vertical Research Advisory, visit vrainsider.com for more details.

Friday
Feb082019

The Importance of Relative Strength. EM, China, GDX. VRA Market, System Update.

Good Friday morning all. Parabolic Options #8 closes today. This will be our largest options program we've done to date. Cannot wait to crush Mr Market with you. We'll close signups today and send out our first test email and texts early Saturday morning. Any questions, we're always here.  To learn more about the program visit : Parabolic Options Program

Yesterdays trading brought our first back to back negative days for VRA Market Internals since the 12/24 Christmas Eve massacre. Still, even with a -220 Dow Jones, new 52 week highs outnumbered new 52 week lows by 187-132. Watching closely as always but this looks very much like an overbought pause, in an otherwise powerful, continuing uptrend. 

Hockey great Wayne Gretzky famously said "skate to where the puck is going, not where its been".

If you watch MSM financial news much, its impossible not to hear about the global slowdown occurring in Europe and China. Please, tell us something we don't already know. Could it be that this is why global markets fell 25-50% in 2018? Could it be that the slowdown is already priced into some of these badly beaten up markets?

This is why we place so much importance in tracking relative strength. Its a unique look at where the puck is going, yet few seem to use this most valuable investing tool today. Thanks again to my mentors from the 80's and 90's (RIP Ted Parsons and Michael Metz). 

Lets look at a few examples this morning (my relative strength charts are versus the S&P 500, the worlds largest and most important equity index):

1) EMERGING MARKETS (EEM).

Again, if you listen to the news you'd probably want to short EM/China. But look at this dramatic, 4 month outperformance of EM to the S&P 500. As much as the S&P 500 has soared from those 12/24 lows, EEM has outperformed by 12%. Thats some serious alpha. But the "gurus" want little to do with EM/China. Their loss....again.  

2) CHINA
 
Looking specifically at China (to S&P 500), we see an almost identical pattern. What would you say that the actual smart money is doing here? Shorting China or buying China? Note: Chinese markets are closed all week for New Year celebrations. My best advice is to ignore the Chinese perma bears. I've been among China's hardest critics...but I also believe they have read their history books about the Japan/US battles from the late 80's and 90's. Once Japan got our attention, as they made their own attempt to take over the world, the US reminded Japan of exactly who the boss was. The end result was a 19 year bear market in Japanese real estate and 75% collapse in the Nikkei Dow. Today, China has debt/GDP of 270%...they know they cannot afford to make the same mistakes that Japan did. I remain confident that China is in the process of caving to the willpower of one Donald J Trump. This chart tells us that the worst is likely over in China. Keep buying. 
 

 

 

3) MINERS (GDX)
Talk about stark relative strength and outperformance, check out GDX vs SPX over the last 5 months. What we see below is a massive 36% outperformance from GDX. The key to making money in gold/silver equities is exactly what we see below. The leverage is always in the miners (3-5 x). In addition, GDX has traded above its 200 dma for 10 days, with a golden cross buy signal generated earlier this week (50 dma crossing over 200 dma).

 

 

VRA Market and System Update

The January barometer is another piece of important analytics that long time market watchers have used for decades. Check it out; we know that we just had the best January since 1997, with S&P 500 gains of 5.62%. What does this mean for us?

As goes January, so goes the year....this is the heart of the January barometer. 

Between 1950 and 2017, the January barometer has been correct 58 of 67 times, or 87% of the time. Powerful statistical analysis. 

Lets also remember that in years following mid-term elections, since 1946, the markets have been higher 18 of 18 times, with an average gain of 15%.

Folks, and forgive my repetitiveness here, but we must continue to ignore the permabears and negative Nancy's. No, we are not headed into recession. No, the sky is not falling. And yes, we remain in a super bull market that will take the Dow Jones past 35,000 by the end of next year and past 50,000 by the end of Trumps second term. 

While we remain short term overbought, the time to aggressively buy was in mid-late December, but also know this; we continue to expect that any pullback will be merely an overbought pause. We see it in the data and we see it in VRA internal tracking metrics. US stocks are building momentum. Much higher prices await. 

If you've been able to listen to our end of market daily podcasts, each day you hear us get into the mechanics of the markets. The backbone of the VRA Investing System. We're big believers in the KISS principal. With all of the insane attempts by todays day trading technicians, who think they can time the markets from day to day, we take a bit longer term view. Watching the internals and the VRA System Screens have kept us on the right side of big moves. 

Please join us daily at vrainsider.com/podcast   

While we remain at 8/12 screens bullish, I look for this to jump to 9/12 in the near future. Remember, anything above 6/12 bullish screens and we're still buyers. The Dow Jones is back above its all important 200 dma, with the S&P 500 and Nasdaq hot on its tail.

Check out this excellent work from our friend Troy Bombardia, master of market analytics. What we see below is what happens to the S&P 500 when it closes above its 200 dma after being more than 14% below its 200 dma for the previous 3 months. Stunning figures here, including an S&P 500 that is higher 100% of the time over the next 3-6-9-12 months, with an average gain of 17.36% a full one year later. 

Long and strong...don't let the bears convince you of anything else. 

 

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.

Experience the Vertical Research Advisory free for 2 weeks!! For a limited time we are offering a 2 week free trial to the Vertical Research Advisory, visit vrainsider.com for more details.

 

 

Thursday
Jan312019

Bears Are Capitulating, Perma Bears Getting Smoked. My Day with CNBC and Twitter

Good Thursday morning all. The bears have started to capitulate. We see it in short covering and we see it in the data (put / call ration, collapsing VIX Index, volume and internals).

Capitulation is a process ... this market melt-up could continue for an extended period. We'll know if any significant reversal is in the cards by the internals and key market leading sectors (tech, small caps, growth, momentum). As always, we'll give you an advance heads up. Still a whole lotta perma bears getting their cleaned clocks, including the biggest gurus on the planet.

My Day with CNBC and Twiiter.

Over the years I've gone from being a religious CNBC watcher to pretty much not at all...just for breaking news and interviews only. The later was absolutely the case once it became clear that Trump had a chance to win the presidency. CNBC turned into the Hate Trump Network, 24/7. Hard pass. And what a failure. Within 6 months of Trumps victory, CNBC's ratings were said to have dropped below the Childrens Network Business Channel, which mostly features counting butterflies and puppies (or so I'm told).

But...CNBC has gotten better. I'm back on, meaning that I keep it running on mute in the background for breaking news and interesting interviews. Earlier this week, one of the panels was getting into Apples earnings, which would be released after the close. The entire set was bearish. Apple was going to $140 or lower, according to Mr. Wonderful. Yes, this jackass actually wants people to refer to him by that name (and I typically like Canadians a lot...Kevin O'Leary evens that scale).

Point being, even after one of the largest and most successful co's on the planet...one with more than $245 billion in cash...and had already dropped by 38% in price (from $231 on 10/1/18 to $142 on 1/3/19), these "gurus" were certain that Apple would keep getting their clock cleaned. 

And then Apple reported earnings. Boom. Earnings beat, positive comments from Tim Cook and a big 6% move higher in the share price. 

If you watch CNBC, I highly encourage you to do so only for the most relevant information to you. NOT for their buy/sell recommendations. I think maybe readers believe I'm joking when I say that the investment experts on CNBC do not publish their track records. Not a joke...they do not...their performance is that horrible. Remember, 90% of all active money managers do not beat the markets, year in and year out. Why should we be surprised to learn that CNBC wants to keep these figures buried deep. 

On top of Apples move higher, Boeing announced a monster earnings beat with BA trading up a big this week. Same with chip maker AMD, a big earnings beat, withs shares surging nearly 20% yesterday.

Folks, not to pat ourselves on the backs too much, but we did say....day after day after day...that the December sell-off was an aberration. A mistake. That looking forward, investors will realize it was the buying opp of the year. That the Christmas eve massacre marked signifiant capitulation lows. That we MUST be buying aggressively, 

In all humility, we nailed it. This is why the average VRA Portfolio holding is up more than 30%, from 12/24/18, pretty handily beating the S&P 500 gains of 13%. Frankly, it was one of the easiest calls of my career. J Powell's FED spooked the markets, at a time when liquidity was nonexistent and 150 hedge funds were already closing their doors and going through end of month forced liquidations. The FED...once again...our biggest risk. 

The "recession is coming" group is beginning to look laughably silly. But these perma bears seem to be full on self hating masochists. A nasty lot of deeply negative fear mongers that appear to root for global anarchy. Global depression is on their annual Christmas wish list.

Precious Metals

Gold, silver and the miners are spiking again this morning. This breakout looks to be legit.  Gold and GDX (miner ETF) are right at "significant" breakout points. Check out these charts

 

 



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.

Experience the Vertical Research Advisory free for 2 weeks!! For a limited time we are offering a 2 week free trial to the Vertical Research Advisory, visit vrainsider.com for more details.

Also, Find us on Twitter and Facebook

Friday
Jan252019

Precious Metals and Miners: The Move of a Lifetime is Beginning

Good Friday afternoon. If you’ve been with us a while you know our views on gold/silver and the miners. Fundamentally, they MUST be owned. Precious metals are the antidote to fiat currency. The world is awash in debt that can NEVER be repaid. Governments and central banks have done the rest of the damage, printing our currencies into oblivion, as evidenced by the 97% depreciation of the USD since the creation of the FED in 1913…another financial Frankenstein from the worst president in US history, Woodrow Wilson (he also brought us the 16th Amendment/income tax).

If you’ve ever wondered “what the hell happened to our financial way of life”, aka, why is it that both spouses have to work to bring home the same benefits that a single income produced just 30–40 years ago, now you know the answer. Currency debasement. Currency inflation. US dollar destruction.

USD currency destruction lies at the heart of most all our financial issues. Period.

As a side note, this also explains todays manufactured culture wars, aka 99% of the “news” we’re force fed today. The powers that be do not want us talking about currency destruction or the dangers of a runaway, unregulated FED. They do not want us talking about soaring inflation (which sits at 10%+ today). They do not want us talking about The Patriot Act. They do not want us talking about multiple 6 figure college costs. And they don’t want us owning precious metals.

I committed numerous chapters to these subjects in both of my CrashProof Prosperity books. Nows a good time to go back and read them. Inflation is coming…on a global and massive scale. As inflation first returns (and its happening now…those 2% CPI reports are full of deception), it will be a major positive for global equity markets. Again, at first. This view is at the heart of my DJ 35,000+ call by end of 2020. Early inflationary breakouts are HIGHLY bullish for equities, as history has demonstrated often.

To be crystal clear, we should own “physical” gold and silver (not hypothecated gold/silver ETFs). And we should own mining stocks….thats where the real leverage lies. Leverage of 3–5 times historically, meaning that in PM bull markets, the miners actually outperform gold by 3–5 times.

The VRA has been bullish on PM’s (and miners) from 2003, where in my second-ever buy rec I recommended gold and silver. Gold was below $400/oz. Silver was below $5/oz. We’ve also locked in well over 2000% in net gains from our recommended miners.

I know this sector. I know this fundamental story. I love PM’s and miners, particularly in todays climate.

Let me also remind that our VRA 10 x Buy Rec Fortem Resources (FTMR) has a significant stake in “City of Gold”, a massive 465 square mile concession in Myanmar. I’ll have more on this soon, just know that Fortem CEO Marc Bruner and COO Mike Caetano have BIG plans for City of Gold. Just another reason to own Fortem. Here’s the link:

http://www.fortemresources.com/resources/mining/city-of-gold/

And folks, something big is taking place right now in PM’s. The technicals are flashing all kinds of buy signals. MAJOR buy signals. Lets take a closer look. First up, here’s the chart comparing the miners (GDX, miner ETF) to gold itself. In big bull markets, the underlying equities outperform the commodity.

We see it clearly in this chart, as GDX has “significantly” outperformed gold since early September. This is a most important indicator, one that few are talking about today. But we see it…we love what it’s telling us.

 

 

Gold has just broken out as well. Gold is now above its 200 dma with a golden cross occurring this week (50 dma crossing 200 dma). Big technical buy signals here.

 

 

We see the same in GDX. Back above its 200 dma with a golden cross nearing. We have yet to see volume confirm the move, but with the breakout that I expect, ramping volume in the miners is near. Once GDX breaks $25, look out above.

 

Now is the time to have your positions in place. Gold, silver, and the miners. To learn more sign up for our Free 14 day trial at VRAInsider.com and you will receive a copy of our report on investing with Precious Metals & Miners.

The move of a lifetime, for precious metals and miners, is beginning.

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.

Experience the Vertical Research Advisory free for 2 weeks!! For a limited time we are offering a 2 week free trial to the Vertical Research Advisory, visit vrainsider.com for more details.

Also, Find us on Twitter and Facebook

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