What an interesting start to 2025! Are we looking at a V-shaped recovery?

WEEK 30/12/2024 to 03/01/2025
🚨What you need to know this week🚨

What You Need to Know This Week:

• Labor Market Strength:

  • Initial claims fell to an 8-month low, signaling a resilient labor market.

  • Analysis: Strong employment data could bolster consumer spending and confidence.

• Tesla Deliveries Decline:

  • Tesla (TSLA) deliveries fell 1% in 2024, marking its first annual decline in over a decade. Strong sales in China partially offset global weaknesses.

  • Analysis: While China remains a bright spot, global growth concerns could weigh on Tesla's stock.

• M&A Blocked:

  • President Biden halted Nippon Steel’s $14B acquisition of U.S. Steel (X) on national security grounds.

  • Analysis: Regulatory risks continue to impact M&A activity in strategic sectors like steel.

• Housing Market Challenges:

  • Mortgage rates rose to a six-month high of 6.91%, cooling homebuying activity. Applications fell 21.9% YoY.

  • Analysis: Elevated borrowing costs are dampening housing recovery and may pressure homebuilder stocks.

• Commodity Highlights:

  • Gold marked its best year this century with a 26% YTD gain.

  • Bullish oil bets hit a four-month high as oil surpassed two-month highs.

  • Cattle futures hit record levels.

  • Analysis: Inflation concerns and geopolitical risks are driving strong demand for commodities.

• Crypto Developments:

  • BlackRock's Bitcoin ETF became the most successful ETF launch in history.

  • MicroStrategy expanded its Bitcoin holdings by $209M, reinforcing its crypto-focused strategy.

  • Analysis: Institutional adoption continues to fuel optimism in crypto markets.

• US Markets:

  • Stocks dipped in the first trading session of 2025, extending losing streaks for the S&P 500 and Nasdaq to five days—the longest since April 2024.

  • The dollar surged to a two-year high against the euro and an eight-month high against the pound.

05/01/2025
🔎 Insights on the market 🔎

Let’s take a look at $SPY. On the chart, we can identify the double bottom we mentioned earlier, along with slightly higher-than-usual volume activity. This could signal significant inflows of activity and the bulls gaining ground, at least on the last trading day.

Interestingly, the green candle from January 3rd is right in a tight region of moving averages (20, 50, and 9-day). It’s often hard to predict what happens here, as a breakout tends to push through all of them violently, and a breakdown does the same.

I like to see the area above $580 as a "range" zone. Losing that level would concern me more. On the upside, the $602 zone stands out as the next key level to break for $SPY to leave the range and aim for $609-610 and beyond. 📊🚀

In the case of NVDA, it looks very interesting as it’s holding its range while showing a very active upward move with increasing volume. However, it’s still within the range. Ideally, we’d need to see a breakout above $150-152, accompanied by volume, to confirm buyers stepping in. 📈🔥

BTC performed very well during the SPY's drop, and there’s a general sense of optimism fueled by ETF activity and political interest from the new U.S. president. However, it’s at a critical point where we need to stay vigilant.

While it held the $92,500 zone well, we need to first rule out the possibility of a head-and-shoulders pattern forming in this area. If it is, we could see a significant drop to the next consolidation zone. But if it turns out to be an invalidated H&S, that would be very bullish.

Let’s keep a close eye on it and hope it doesn’t lose the lower range. 🚨📉📈

📜 Historical Perspective 📜

• In 2011, gold similarly surged amid fears of economic uncertainty, marking its then-record highs. The current 26% YTD gain echoes similar inflation-driven dynamics, suggesting historical patterns of safe-haven demand persist during volatile periods.

05/01/2025
✍️Market Lessons ✍️

Diversification across asset classes remains vital. Commodities like gold and oil often serve as hedges during inflationary periods.

💸 Common Mistakes 💸

Traders may overreact to short-term market dips (e.g., Tesla deliveries or US market losing streaks) without considering broader trends like sector resilience or global demand shifts.

📅Next Week’s Economic Calendar (06/01 to 10/01):📅

Sunday, January 5, 2025

Monday, January 6, 2025

Tuesday, January 7, 2025

Wednesday, January 8, 2025

Thursday, January 9, 2025

Friday, January 10, 2025