There is a concerning hush as everyone tries to relax and coast into 2025. But this market has long embraced the characteristics of a killer shark. A killer shark is always on the prowl but most vulnerable when it stops moving. There isn’t panic, but the ‘fear’ gauge is pretty set to reflect current angst.

Still, it was a good week for the market overall.

Friday	Week

 

When the Titans Fall

Okay, the current crop of stocks known as the “Magnificent Seven” is more like the mythical figures of Mount Olympus, but “Titans” sounds cooler.

Either way, large-cap growth took it on the chin on Friday. Conversely, niches like low volume and revenue held up the best.

Thus, 450 names in the S&P 500 finished in the red, and those in the green were mainly tiny and far less influential.

The Good News

It's been a fantastic year that will be studied for years. The rally is intact as long as the 200-day moving average holds.

But things will get hairy when the S&P 500 slips below its 50-day moving average for over a week, even if it’s straddling the line.

Red Flags

The U.S. Dollar (DXY) was fractionally lower on Friday, but it's higher over this year, which could harm Trump’s policy goals. But the strong dollar has helped to attract foreign buyers into U.S. stocks along with the quality of our market.

Screaming Red Flag

Bond yields continue to edge higher, and iShares 20+Year Treasury Bond ETF (TLT) continues to crumble. Something is wrong, but it's hard to put a finger on it. However, I will say that the comments from  Treasury Secretary Janet Yellen on yet another request to raise the debt ceiling before the inauguration smell rotten for several reasons.

Sobering Finish?

I saw a statistic from JP Morgan (JPM) suggesting that retail investors have substantially underperformed in the market this year, and I find it hard to believe.

It must be noted that JP Morgan had the lowest target on the S&P 500 coming into the year, so the entire exercise seems specious to me—an effort to deflect embarrassment from a top Wall Street firm missing a monster year. 

Most stocks indeed underperformed the market, and if retail investors were holding those names after selling major movers, the blame should fall more on Wall Street and the financial media, which never stopped telling people to sell the winners and load up on value and bonds.

Meanwhile, retail investors have displayed extraordinary intuition about the market.

On that note, the American Association of Individual Investors (AAII) survey has seen a swift retreat in retail investor bullishness. I take this more seriously than JP Morgan's attempt to dismiss a stellar year for retail investors.

There are a few reports this week, but nothing will move the needle.

Today’s Session

Futures are all indicating the market will open in the red again today.

The Ten-Year Treasury Yield (TNX) fell 6.4 basis points below the 4.6% level.

Bitcoin (BTC) continues to consolidate, down 1.83% and currently at $92,816.34.

The CBOE Volatility Index (VIX) is spiking 14.29% as indices are opening lower, as can be seen these spikes are rarely sustained.

Rest in Peace, President Jimmy Carter.

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