Special Bulletin: January 8, 2025

Happy New Year! Be Alert! 

Happy new year, indeed! Welcome to a new year potentially filled with new opportunities. Change is coming and to the stock market too. A new Administration with likely very bold initiatives and a lot of momentum. As Americans, this is a time to get on board and do our part rather than dig our heels in and resist.

Much is happening around the world and at a breakneck pace. The political uncertainty in South Korea, the Canadian Prime Minister’s resignation, Trump 2.0 and Argentina’s breathtaking conservative renaissance are among them. Generally, the stock market abhors change – at least, sudden change – and it makes Wall Street uncomfortable.

The stock market’s internals reflect that condition. 

As a result, our Current Market Outlook was downgraded to “Market in a Correction” with a red light as of 1:30p on January 7th with the SPX @ 5,941.81. Our Core Four has deteriorated further and as of yesterday’s close (01/07) had 1 yellow and 3 red lights with a VIX back over its 50-day mav.

With higher interest rates as a new catalyst, the major indexes are coming under additional selling pressure. The key indexes need to hold and stay above their 50-day mav’s (Note: the Nasdaq currently is) to reassert an uptrend. This is a dangerous intersection for the markets as the NYSE’s daily new 52-week lows remain elevated and the S&P500 has slipped back below its 50-day mav. 

Two weeks ago, we wrote, “This past week the stock market got a bit messy as a sharp sell-off happened on Wednesday. At this point, the sell-off looks like a possible successful test of the S&P500’s 50-day mav. The fly in the ointment is the persistent rising 10-year US Treasury yield. It is difficult for stocks to climb as interest rates climb. But it won’t matter to the stock market… until it matters. Many investors see last week’s action as a ‘first shot across the bow’ while others say it was a necessary (and even expected) shake-out of overly optimistic investors. So far both views are potentially right but only one will prevail in the new year.”

This is a key moment for stocks. Friday’s employment numbers will likely be market moving. It is possible that our C.M.O. could even be back to a green signal as early as next week. Or the markets could break loose and plunge lower. Be open-minded and stay flexible.

On Wall Street there is a saying, “As goes January, so goes the year.” So, much is at stake. Employing disciplined risk management tactics is a must going forward. Be alert!

“For the coming of the Son of Man will be just like the days of Noah. For as in those days before the flood they were eating and drinking, marrying and giving in marriage, until the day that Noah entered the ark, and they did not understand until the flood came and took them all away; so will the coming of the Son of Man be.”

Matthew 24:37-39 NASB 1995

Game plan: Prepare for economic battles in the new year. Monitor your employed capital and employ diligence and keep a longer-term view in mind. Ask for wisdom from the Lord Jesus. Pray for the peace of Jerusalem (Psalm 122:6-7). May they prosper who love her.

Note: You can learn more about The Triumphant Core Four risk management system by clicking here.

Have a Triumphant day! ®