- Moving the market
After a weak close to an otherwise strong 2024, the markets opened on a positive note, buoyed by Nvidia and the energy sector, which helped to boost bullish sentiment.
However, despite this encouraging start, the major indexes reversed course, and the gains evaporated, leading to a moderate close in the red. The silver lining was that the markets bounced off their worst levels, with Small Caps managing to eke out a green close.
Tech giant Tesla struggled, losing about 4% in early trading after reporting a decline in 2024 deliveries, while Apple’s stock also slipped into the red.
The so-called Magnificent 7 were the main drivers of last year’s market action, with Nvidia achieving a remarkable 171% gain for the year and Apple adding a solid 30%. However, these outsized gains led to profit-taking, which pulled the S&P 500 down during the last four trading days of 2024.
As we enter 2025, the question remains whether this tech-heavy performance will be sustainable. Despite this uncertainty, relentless exuberance and optimism persist, with traders pointing to economic strength and earnings growth as reasons for more upside potential.
Bond yields stayed in a tight range, while Bitcoin rallied back over $97.5k, remaining unchanged for the last month.
The dollar surged, but this was ignored by gold, which started strong and advanced by 1.20%. Not to be outdone, crude oil followed suit and recouped its $73 level.
Despite a shaky start, history suggests that the first two weeks of January are usually strong, as ZH posted with this chart.
Will history repeat itself?
2. Current “Buy” Cycles (effective 11/21/2023)
Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.
If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.
3. Trend Tracking Indexes (TTIs)
The year 2025 began on a positive note, with markets showing early signs of promise. However, this initial optimism soon faded, leading to a reversal in the major indexes, which ultimately closed in negative territory.
Unfortunately, our TTIs were unable to resist this downward momentum and also declined from their previous closing levels.
This is how we closed 01/02/2025:
Domestic TTI: +2.15% above its M/A (prior close +2.45%)—Buy signal effective 11/21/2023.
International TTI: +0.74% above its M/A (prior close +1.04%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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