Investors had to wait until Friday before popping champagne to celebrate the New Year.

Once again, the life of the party and rally revolves around the need to power the Artificial Intelligence (AI) /data center boom.

A Thing of Beauty

You don’t have to be a technician to see that the S&P 500 (SPX) chart is beautiful.  Power begets power, and new highs begets new highs.

However, some issues, including internal issues, broke down in December.

Moreover, the relative strength index (RSI), money flow index (MFI), and the rate of change (ROC) are struggling. I’d like to see those key indicators turn higher. Remember, last week, the market traded on fragile volume – today is the start of 2025 trading.

Factors

Friday saw the same tide lift for all factors, with the most significant gains from large-cap growth and midcap momentum. Once again, “Mag Seven” and mega-cap tech rescue when the market gets rocky like Batman saving Gotham City.

There is hope for small-caps, but we will hold off on going heavy (see Payne’s Perspective).

Seasonality

The third year of a bull market sees an average gain of 8.0%, and the first ten days of January are among the best in a calendar year.

Today’s Session

The financial media is in a frenzy about Trump tariffs after a report from the Washington Post suggested the plan would be pared back. 

President – elect Trump has said his plans won’t be pared back.  Anyone listening to the Washington Post about the Trump administration wastes their time.

We are the most powerful nation with the strongest economy in the world, it’s time we act like it to preserve that status. 

Comments

Thanks to Trump for providing hope to the markets for greater growth and less onerous regulations Kevin Koeppen on 1/6/2025 1:30:13 PM

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