VRA Investment Letter: The Biggest Bull Market in US History Underway
/Good Thursday morning.
We came into the week forecasting weak inflation data, which continued yesterday. December CPI data is in, and if you’re bullish on stocks (like us), it is an excellent report, with CPI rising just 2.9% (matching estimates) while core inflation came in weaker than expected (.2% m/m vs estimates of .3% m/m). More good news for stocks, bonds, precious metals/miners, housing, bitcoin and all interest rate sensitive groups.
As bulls flipped to bearish over the last 3–4 weeks, we never revised our bullish views on the markets, nor our views that inflation is a rear view mirror concern. We remain unequivocally bullish.
Yesterday’s mini-melt-up featured textbook bull market action. Coming off of “extreme fear” sentiment readings, combined with a heavily oversold market, the stage was perfectly set for the front-running of Trump 2.0 to pick up speed (now just 4 days away).
And there’s this; the percentage of S&P 500 above the 50 dma sits at just 32.6% with only 58% trading above their 200 dma. These are the levels where bottoms occur (in big bull markets, like this one).
And there was more good news from the semis overnight as global leader Taiwan Semi (TSM) beat earnings estimates handily. The shares are trading up 6% this AM, with SMH (Semi ETF) leading our broad market indices this morning.
SMH is tracing out a well defined bullish triangle, which we expect will break out higher headed into Q4 earnings. A coiled spring of the highest order. Note: as the market leader, there is no group more important than the semis. They lead the market in both directions. The semis are THE tell. We’re often asked, “what would it take for you guys to become short term bearish?” It’s this exact chart. Should the semis break down and trade below the 200 dma for more than a week, our short term bullish views would quickly change. We would start raising cash (in the semis and elsewhere). This is why we follow the semis like a hawk.
Should the semis break out, as we expect, get ready for magic to happen throughout the broad markets as well.
As we head into Trump 2.0, along with Q4 earnings reports…the big banks absolutely crushed earnings yesterday…this market is set for gains throughout the rest of the month.
If you haven’t already, we encourage you to read our most recent special report which you can access for free with our trial at VRAletter.com; “VRA Special Report: VRA Strategy & Portfolio Update for a Generational Bull Market”, which we wrote in March of last year. And remember, we were forecasting a stock market melt-up before we knew that Trump would be back in office. Today, we’re even more bullish.
With Trump taking office in just 4 days, investors should prepare for the strongest bull market in US history. We’re actually living through history right now. The stock market has begun a legendary run, and guess what’s fueling it? A massive “Innovation Revolution” and “Trump 2.0”.
Innovation at its Peak: From AI to blockchain to autonomous vehicles to space exploration to quantum computing to robotics, tech is transforming every sector.
Companies are pushing boundaries like never before, which is leading to skyrocketing stock valuations (they’ll only grow larger). This isn’t just a market uptick; it’s a tech tsunami.
Trump 2.0 Effect: With Trump headed back to the White House and with the red-pilling of America now going parabolic, we’ll soon see the power of The Trump Economic Miracle 2.0, with policies that cut red tape, slash taxes, and spur corporate earnings and economic growth.
We look for GDP growth to hit 5% inside of 12–18 months with the return of animal spirits fueling “hyper-growth”. Businesses will thrive with less regulation, and investors are betting big on America’s future.
The S&P 500 is up 68% from the 10/13/22 bear market lows…that’s not just growth; that’s the beginning of a financial revolution. We’re not talking about a normal bull market; this one’s for the history books.
The Innovation Revolution will continue to ramp. Tech giants are at the forefront, making gains that were unthinkable just a few years ago. Bitcoin will keep hitting new highs, with clear regulatory nods from the new administration featuring a Strategic Reserve for Bitcoin. Our price target for BTC in 2025 is $200k and a cycle high of $350k within 2–4 years (just increased from $250k).Tesla, our top tech pick (it’s not a car company) will top $700 in 2025 and $2000 within 3–4 years (both estimates are probably on the low side).
VRA Bottom Line: Now’s the time to invest, build, innovate, and celebrate the economic juggernaut of Trump 2.0 and the Innovation Revolution.
Until next time, thanks again for reading…
Kip
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