[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player]   Our hearts go out to the people impacted by the wildfires in Los Angeles. The human cost has already been staggering, with at least 24 dead and as many as 100,000 forced to flee their homes. We don’t yet know the final financial toll, but as traders, we can already see signs in the market. The potential clean-up and rebuild will cost, and the tape reflects this inflationary reality. Today, for instance, was marked by rising energy prices and strength in materials and construction equipment. At first look, oil prices have been setting up for a breakout for a while, but something seems to have changed. We’ve already seen bullish conditions for energy, but beyond that, stocks like Caterpillar (CAT) and John Deere (DE) are breaking out today. We’re seeing relative strength increase in steel companies like Cleveland-Cliffs (CLF),

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] All of the big indexes got rocked to the downside today. On the surface, the market had a “good news is bad news” freakout about strong December jobs gains. We’ve seen this behavior before. Last week, in fact, I invited traders to “enjoy the bounceback… and get ready for another smack.” And that’s what we’re getting right now – what we’ve been getting for most of the week. The thing way down in the belly of the beast that is smacking this market… is bonds. Now, I know plenty of people don’t trade bonds. I do, but a lot of people don’t. But regardless of whether you’re trading them, they’re what’s killing stocks. “You might be done with bonds, but bonds aren’t done with you” is how I’d put it. They’re stuck in a wild feedback loop – and I’m

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Growth: Every country wants it, and governments and their planners will crawl over broken glass to get it. Here in the United States, growth has been so-so, well below 3% in 2024, though it’s strong compared to many other big economies. As we’ve been talking about recently, we can look at the behavior of assets to get a good read on the prospects for growth – or lack thereof. If you joined my session this morning, you’ll remember we looked at gold and copper – two essential metals. Gold is an ancient hedge against inflation, while copper is an indicator of demand. When they move in opposite directions, we know there’s economic trouble brewing. When they move up together, we can safely assume that the economy is healthier and primed to grow. Let me show you what I’m seeing in

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Stocks gave back all of Monday’s gains and then some today. Monday’s panic buyers were mercilessly punished for going nuts during the spree. Frankly, I’m not surprised by today’s plunge – I actually find it encouraging. That’s because a period of sideways price action will provide fuel for an even more powerful rally down the line. Bonds are putting pressure on stocks right now, and the energy sector is going to have to roll over to bring some relief to interest rate fears. Even crypto, which treated us very well in the back half of 2024, is under momentary pressure. But here we have too many traders chasing a move. This brings me to the correct move in these situations. In a two-sided market, traders who chase every rally or short every pullback are the reason patient traders like us

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] If, like me, you’d watched the market edge higher this morning, what would you have guessed was leading the way? None other than the Magnificent Seven, of course. In this day and age, it’s generally a good bet that that particular “basket” of stocks will lead markets higher. In fact, in 2024, Apple (AAPL), Amazon (AMZN), Google (GOOG), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) accounted for a staggering 60% of the S&P 500’s 24.2% bullish run. What’s more, if you peek into hedge fund portfolios, you’ll find some combination of these stocks among their holdings. What does this mean for regular folks like us? Well, it means that if you’re generally bullish on the market, it’s a good idea to hold a number of these stocks. Days like this put the proof in the pudding. But there’s

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] Markets were up strongly today, bouncing back from this week’s beatdown. But here’s the thing. Correlation is high and still increasing. I’ve talked a lot about this recently. Correlation is tricky stuff. When you see stocks moving with no headline or hard, identifiable event driving that move – that’s correlation. And what it takes up, it can take down. Sure, that’s not the most cheerful New Year message, but I’m here to help you make money. Traders like us are going to have to shift gears and contend with increasing volatility. That’s not a bad thing at all. Here’s what I see…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] I’m a technical trading guy – there’s no better way, in the moment, to get the full picture to know when to pull the trigger on a trade – or the ripcord. Technical analysis is the way to understand price action in the short term.  But you can’t ignore fundamentals, the forces that dictate, more than anything, the long-term performance potential of stocks.  We’ve been looking at a couple of “under-reported,” under-appreciated fundamental forces lately.  Let’s take a look at another indispensable tool… 

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] This is what I’d call a highly unusual “Santa Claus rally” period – what with the consecutive days of selling and all. But keep it in perspective; volume is light this time of year and the bears don’t have much fight in them right now. This is a great time to reflect on a record year for the market – a year rife with opportunities, particularly in leadership sectors like communications and consumer discretionaries. On the other hand, this is the first time in three months that I have minimal crypto exposure, and I wouldn’t be surprised to see a sideways grind there in the coming weeks and months. On the other other hand, that strikes me as being healthy for this asset. This all signals to me that bulls will still have the edge in 2025, although the possibility

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] By any measure, the “Santa Claus rally” that historically boosts stocks through the end of a calendar year has failed. There are just a handful of trading sessions left in the Santa Claus rally period, but I still see folks hopefully scanning the horizon in hopes the jolly fat bull might appear… There’s a tendency among some to squawk about a bull market – then lean on the “greater fool” to save them. But I want to show you what the charts say. We’ll dig into the technicals of this correction and see if there’s a silver lining. We’ll run through four signs sellers throw off when they’re about to run dry. Let’s take a look…

[video_player type=”embed” style=”1″ dimensions=”640×360″ width=”640″ height=”360″ align=”center” margin_top=”0″ margin_bottom=”20″ ipad_color=”black”][/video_player] We need to talk about what’s happening in these markets right now. Because the Santa rally is now toast…   We’re seeing something that should get your attention – extreme correlations across sectors that we haven’t witnessed in recent memory.   Sure, tech’s been holding everything together, but when you’ve got the Dow and Russell getting absolutely decimated, homebuilders dropping from +33% to +11% YTD, and almost every sector except tech showing serious weakness, you’ve got to pay attention.   The really concerning part?   We’re seeing higher degrees of correlation, meaning there’s no place to run, no place to hide.   Even with a 1% down day, we haven’t even seen tech truly get hit yet.   But with these correlation patterns emerging, that could change fast. And when tech starts to feel it, the whole market’s going to