Market whispers - Jan 13th 2025
Markets: Beachman's latest read on the markets
Let’s kick off 2025 with a redesigned weekly “Market whispers”…a concise AND actionable read on the markets…that you can rapidly consume…even while waiting for your coffee to brew or your Uber to arrive.
Table of contents
Overall market conditions
Beachman’s portfolio stance
Important dates
Market signals
Bottomline
Overall market conditions
Trend: Bearish
Risk level: High
Investor sentiment: Fearful
Beachman’s portfolio stance
Mostly long.
Some shorts in place (See current trades at Beachman’s Salty Trades).
Cash ready to buy the dip.
Important dates
Jan 17th - Monthly options expiration. About $700B in volume. 2x bullish CALL options versus bearish PUT options.
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Market signals
SP500 in a SELL signal and getting comfortable below the 50dma and below PUT support of 5,900.
Nasdaq also in a SELL signal and below the 50dma and below PUT support of 510.
Small caps in a SELL signal and need to hold critical support at $210.
So what’s behind the bearish volatility?
US 10-year interest rates continue to climb higher which negatively impacts ALL earnings estimates for US stocks i.e. reduces future margins, cash flows and stock values.
The US$ index is also rising in tandem which reducing the earning power of companies doing business internationally. Steel yourself for companies like NFLX whining like crybabies about how the strength of the US$ is hurting their business.
Finally, Bitcoin continues to be in a SELL signal and getting comfortable below its 50dma…threatening to go much lower.
Bottomline
This is not the time for heroics and rampant speculation.
While I remain mostly long, I am staying nimble in the markets and keeping trades on a short leash.
I am using shorts as a partial hedge to make money in the direction of the market trend.
Cheers and good luck in the markets!