In this week’s episode of Your Next Trade, we celebrate Bitcoin’s remarkable finish above $100,000. This milestone underscores the broader “risk-on” sentiment in the markets, with assets like cryptocurrencies, high-beta stocks, and indexes seeing strong performance. This trend has been driven by significant inflows into U.S. equities, fueled by bullish sentiment surrounding the new U.S. administration and robust economic indicators.

Key Market Trends and Performance Highlights

• Stock Market: The S&P 500 closed the week up 1%, closely tracking expectations set by option market pricing. The Nasdaq outperformed with a 3.3% gain, led by strong performances in major tech stocks, including Amazon.
  • Sector Winners: Consumer Discretionary and Technology led gains, with standout performances from names like Lululemon, Ulta Beauty, and Tesla.
  • Sector Laggards: Energy, Utilities, and Financials struggled, with oil services and homebuilders also underperforming.
• Crypto and Commodities: Ethereum showed signs of catching up to Bitcoin, while gold, WTI, and copper prices were roughly flattish.
• Global Currencies: Emerging market currencies like the Brazilian real weakened, while major currencies experienced notable moves due to geopolitical headlines.

  

  WTD Assets Performances.

Macro Insights: Positive U.S. Economic Outlook

The U.S. economy remains a global standout, with strong growth giving the Federal Reserve room to potentially cut rates. Key takeaways include:

• Fed Chair Powell’s optimistic outlook on the U.S. economy.
• Expectations for a December rate cut of 0.25%.
• Declining volatility (VIX) levels, reflecting increased market confidence.

  

  86.0% chance of -0.25% at the next FOMC meeting.

Technical Analysis: Riding the Trend

The prevailing advice: The trend is your friend.

• Key indices, including the S&P 500 and DAX, are trading at the top of their ranges, signaling potential overbought conditions.

  

  DAX trading at the top of its range.

• Amazon and other Fab7 as tech leaders, with Amazon showing breakout patterns and Adobe set for an 8% move ahead of earnings.
• Costco’s consistent long-term uptrend, illustrated through a logarithmic chart, showcases the resilience of its business model despite potential headwinds.

  

  Costco logarithmic weekly chart

Upcoming Catalysts and Events

• Earnings: Big names to watch this week include Oracle, Adobe, and Costco.
• Macro Events: Key data releases such as CPI and PPI, alongside central bank meetings in Canada, Australia, Brazil, Switzerland, and the ECB.
• Volatility Compression: Expected moves for the S&P 500 remain subdued, signaling continued low volatility unless unexpected events disrupt the status quo.

  

   

Looking Ahead: Community and Opportunities

We’re making strides to enhance our Discord Community. Starting in 2025, the community will transition to a paid model for premium insights and resources.

Join our Discord community for in-depth discussions, access to premium content, and more! https://discord.gg/wrvGuF3M

Additionally, don’t miss:

• The annual webinar in mid-January focused on trade idea generation for 2025.
• A 25% holiday discount on our 4×4 Video Series, available until December 31. This comprehensive package includes access to over 40 videos and spreadsheets designed to help you build a professional trading process.Use discount code: HOLIDAY25

Closing Notes

This episode may mark the last for the year, but stay tuned for potential updates and previews of our 2025 trade ideas. Until then, have a successful trading week! For any questions about our resources or mentoring sessions, feel free to reach out.

Connect with Us

• Email us with your questions.
• Join our Discord Community for deeper discussions.
• Like and comment on our videos to share your thoughts and feedback.

Have a great trading week!

Greg