With that as background, let’s start building our simple trading system based on my 7 Market Rules, starting with #6: Fundamentals win in the end. In the past I’ve mentioned something I call the Vodka Vacuity, the reality there are no Absolut(e)s in market analysis. But there is one: Eventually, markets come down to supply and demand. No, I don’t mean government related estimates and imaginary numbers, but rather real fundamentals shown to us through spot (cash) price, basis (differential between spot/cash ...

Group 1 - The article provides a market analysis covering major indices including Nasdaq 100, S&P 500, and Dow Jones Industrial Average, indicating current trends and performance metrics [1] Group 2 - The analysis includes insights on S&P 500 Futures, highlighting their implications for future market movements and investor sentiment [1]

Market Overview - The market has shown a loss of momentum since mid-October, leading to increased volatility and a different character compared to earlier stages following the April low [2] - Despite the current volatility, the uptrend remains intact, and confirmation of new highs is essential for a breakout to be considered valid [4][5] Technical Analysis - A breakout for the S&P would require solid closes above the final resistance level of 6911, which would act as a short-term positive catalyst [3] - Current projections suggest that if a breakout occurs, the market could reach around 7100, but the risk-reward ratio is not favorable, with support approximately 3% below [6][7] Bond Market Insights - There are expectations for a potential decline in yields, possibly below 4%, due to a weak labor market, although recent GDP data has added basis points to yields [8][9] - The 10-year Treasury yields have been rangebound, and a neutral bias is assumed until a decisive move occurs [10][11] Cryptocurrency Analysis - Bitcoin shows a more constructive near-term bias due to oversold conditions, but monthly charts indicate deterioration in momentum, suggesting a potential trading range or down cycle [12][13] - Institutional involvement has not yet led to reduced volatility in Bitcoin, and significant drawdowns remain possible, although not imminent [15][16]

Market Outlook for 2026 - The market indicates positive underlying economic factors despite business challenges in the current year [2] - Broadening market trends are expected to continue, benefiting growth stocks into 2026 [3] - Momentum heading into the new year is strong, supported by earnings and a potentially stable or easing Federal Reserve policy [4] - Confusion around market leadership (Mag 7 vs broader market) is expected to persist, requiring focus on earnings and Fed policy [9] Historical Context & Potential Risks - The average bull market lasts about five years, suggesting the current one is still relatively early [6] - Stocks have only risen for four consecutive years with double-digit percentage gains once in the last 100 years, highlighting potential for a market correction [10] Supporting Factors - Constructive elements from a major bill passed this summer are beginning to materialize [7] - Clarity around tariff policy, consumer-related factors (back tax refunds), and deregulation efforts are expected to support business growth [7] - Fundamental underpinnings and earnings are supporting current valuations [8]

🇺🇸 The Fed just flipped the switch.Lower borrowing costs → stronger market momentum.Warm markets = prime conditions for crypto to grow. https://t.co/i24ozfeFYp ...

Market Outlook - Discussion of market momentum, suggesting a focus on current market trends [1] - Examination of "hopium," indicating analysis of investor sentiment and potential over-optimism [1] - Exploration of "holiday alpha," implying strategies for generating returns during the holiday season [1] Recovery Analysis - Questioning whether the recovery is a true V-shape or just perceived ("vibes"), highlighting uncertainty in the market recovery [1] - Acknowledgment of surviving a "chop," suggesting the company navigated a difficult period [1]

Group 1: Market Sentiment and Political Landscape - The recent elections in New York and New Jersey indicate a shift in sentiment, potentially affecting market dynamics and midterm elections [1][5] - The current political climate reflects a divided nation, with challenges ahead for whoever is in charge of running cities like New York [3][4] - Despite some shifts toward the Democratic party, significant work remains to be done, and the overall sentiment remains mixed [5] Group 2: Market Valuations and Trends - There is a consensus that market valuations are high, contributing to recent market sell-offs, with specific reference to Palantir as an example of high valuation despite strong earnings [6][10] - The market structure has changed, with more ETFs than individual stocks, leading to a focus on money flows rather than traditional valuation metrics [7][8] - A deterioration in market breadth is noted, with more stocks in downtrends than uptrends, suggesting a potential pullback or correction is due [9][10] Group 3: Currency Impact and Earnings Outlook - The dollar has strengthened recently, which could pose challenges for companies, especially if it affects earnings in Q4 and beyond [11][12] - Despite concerns about the dollar's strength, the overall outlook for the bull market and earnings remains positive, indicating a need for market consolidation rather than a downturn [12][13] Group 4: Sector Performance and Investment Opportunities - There is a notable rotation in the market, with healthcare stocks, such as Exact Sciences, showing positive momentum and potential for growth [13][16] - Exact Sciences is highlighted for its innovative approach to testing, which may appeal to consumers looking for cost-effective solutions [14][15]

Market Performance - S&P 500, Nasdaq, and Russell all reached new all-time highs [1] - Friday all-time highs suggest strength and potential continuation into the following week [1] Cryptocurrency Market - Bullish momentum is expected for Bitcoin (BTC) over the weekend due to it being the only major market open [1]

Market Overview - The market currently lacks strong momentum and fundamental threats that would typically shift the narrative [1][2][3] - Absence of imminent central bank meetings and major US data releases contributes to the current market stability [2] - A "black swan" event is considered the only factor that could significantly alter the market narrative [2] Potential Risks - An overstretched market could trigger an internal correction [3] - A year-end dollar rally is identified as a potential source of pressure on existing positions, with possible spillover effects [4] - A stronger dollar could tighten financial conditions globally, impacting assets priced in dollars [6] Gold Market - A stronger dollar negatively impacts gold, as gold is often inversely correlated with the dollar [6][7] - Higher yields also put pressure on gold prices [7][8] - Short dollar positions and consensus long gold positions are vulnerable to a dollar rally [8][9] Outlook - Equities are expected to continue grinding higher despite concerns [10] - A significant internal hurdle is needed to disrupt the current upward trend in equities [10] - Expect a dollar bounce, which is probably bullish [10]

Core Insights - Investor risk appetite is surging, with significant inflows into speculative investment vehicles despite ongoing tariffs [1][2] - Total assets under management (AUM) in leveraged equity ETFs have increased by 74% since April, surpassing $1.6 billion [1] - The current AUM is nearing the $1.8 billion peak from three years ago, indicating strong risk appetite [2] Market Trends - The market is described as increasingly "febrile," with over $700 million flowing into high-risk funds since spring [2] - The largest one-year inflow was noted in leveraged ETFs tied to gold miners, reflecting a strategy focused on volatility even in safe-haven sectors [4] Leveraged ETFs Overview - Leveraged ETFs utilize financial derivatives and debt to amplify returns, making them popular for short-term speculation [3] - The trend suggests a growing belief among traders in continued upward market momentum [3] Price Action - A list of notable leveraged ETFs shows significant year-to-date and one-year performance, with some bullish options like ProShares UltraPro QQQ up 33.36% YTD and 50.49% over one year [5] - Conversely, bearish leveraged ETFs like ProShares UltraPro Short QQQ have seen declines of -52.11% YTD and -60.86% over one year [5] - Major ETFs tracking the S&P 500 and Nasdaq 100 indices have also shown positive premarket movements [5]