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SURGING YIELDS WEIGHING ON EQUITIES

REAL YIELDS DELIVERING A STRONG DOLLAR

CHART ABOVE: The US 10 year took out the negative trend line in mid December. The golden cross is very much in place (50 over 200 day). Last time we saw a similar cross was in Q3 2023. 4.65% is the big resistance area to watch. We should see rates take a breather, but you never know.

CHART RIGHT: Strong Real Rates (right) are delivering a strong US Dollar.

1- SITUATIONAL ANALYSIS

"BE CAUTIOUS WHEN OTHERS ARE NO LONGER FEARFUL!"

A-SENTIMENT

NEW--1-CNN'S GREED-FEAR INDICATOR - 01/04/25

We are in "deep" fear territory. Do we dip into extreme fear soon?

NEW--2-CNN'S GREED-FEAR INDICATOR - 01/04/25

CNN's Greed-Fear indicator shows rather elevated fear. This has usually led to markets bouncing as heightened fear is often seen as a bullish signal.

NEW--3-AAII BULL-BEAR SPREAD - 01/04/25

Big moves down in the AAII bull-bear spread have tended to lead to markets bouncing...

NEW--4-AAII BULL-BEAR SPREAD - 01/04/25

Bulls giving up - Bears getting excited according to the latest AAII sentiment reading, (a contrarian sign - Too Much Fear, Too Many Bears).

NEW--5-S&P 500 QUARTERLY RETURNS - NEW PRESIDENT - 01/03/24

S&P 500 Index Quarterly Returns Based on the Four-Year Presidential Cycle - The first quarter of the first year in a presidential cycle often exhibits a sluggish performance for the S&P 500. As the year progresses, however, there is a tendency for the market to regain strength, ultimately delivering a solid performance.

NEW-6- RETAIL PERCENTAGE EXPECTING HIGHER PRICES - 01/03/25

Longer term view shows that retail is extremely exuberant. Percentage that expects higher stock prices has exploded to the upside.

NEW--7 - BI-MONTHLY SPX RETURNS - 01/03/25

Do we see the 2 strong weeks of January kick in post the soggy Santa?

NEW--8-NAAIM EXPOSURE INDEX - INVESTOR INDEX - 01/03/25

The National Association of Active Investment Managers Exposure Index represents the two-week moving average exposure to U.S. equity markets reported by NAAIM members. The NAAIM Exposure Index of 64.10 indicates that active investment managers are less optimistic about the market, reflecting a more cautious approach to their investment strategies. Image: National Association of Active Investment Managers (NAAIM)

NEW--9-SEASONALITY - S&P 500 MONTHLY RETURNS - 12/31/24

The performance of the U.S. stock market in January is often considered as a key indicator for the year ahead. Although January’s stock returns can seem erratic, the median return has been around 1.5% since 1950.

10- EUPHORIAMETER - 12/16/24

S&P 500 & COMBINATION OF FORWARD PE,VIX & BULLISH SENTIMENT

Bullish sentiment among investors in the U.S. stock market only continues to soar, reaching new all-time highs.

B- FUND FLOWS - ETFs, FUND MANAGERS, HEDGE FUNDS, REBALANCING & ROTATION

NEW--SECTOR ETF FLOWS - 01/03/25

In 2024, the financial sector ETF (XLF) saw substantial inflows, making it the leading performer in attracting new capital, while the energy sector ETF (XLE) experienced significant outflows, ranking it as the worst performer.

NEW--MEDIUM MONTHLY FLOW INTO EQUITY MUTUAL FUNDS & ETFS AS A % OF TOTAL AUM - 01/02/25

January has historically seen increased investor activity in equity markets, resulting in strong inflows, as the start of a new year often inspires renewed investment strategies and goals.

NEW-- LEVERAGED ETF AUM GROWTH - 01/03/25

Leveraged ETFs have exploded in popularity. Don't forget that these funds must buy more the higher markets move. But this works the inverse way as well. AUM is down around $15bn from highs, but we remain in the 99% tile.

RECORD FLOWS EVERYWHERE!

FIRST $1 TRILLION ANNUAL ETF FLOWS

C- PATTERNS - Wedges, Trading Ranges, Ending Diagonals, ATH (All Time Highs / Lows)

NEW--GETTING TO DECISION TIME

ACROSS THE BOARD

CRITICAL LEVELS EVERYWHERE!

S&P 500

SPX is holding for now. As we pointed out yesterday, 5900 is the big short term support area. So far we have bounced on the 100 day moving average, as well as the longer term trend line. 50 day comes in around 6030

(all levels in futures).

RUSSELL 2000

Russell trading at the longer term trend line, just above the 200 day moving average.

MAG-7

MAG index approaching the steep trend line as well as the 50 day moving average. RSI at the most oversold levels since mid Sep. Must hold coming up...

NASDAQ

NASDAQ back above the 50 day, having bounces on the trend line.

GOLD

MAG index approaching the steep trend line as well as the 50 day moving average. RSI at the most oversold levels since mid Sep. Must hold coming up...

SOX

SOX is trapped inside a massive triangle like formation. 200 day is right here. Despite all the hype, sexy SOX has done very little, so expect the break out to be powerful as vacuum has been created, both ways.

2- FUNDAMENTALS



NEW--GOLDMAN SACHS' U.S. FINANCIAL CONDITIONS INDEX

While recent U.S. financial conditions have tightened, presenting challenges for businesses and the economy, they are not extraordinarily tight by historical standards.

3- TECHNICAL ANALYSIS.

NOTE

NEW IMAGE CHANGES ARE LABELED WITH A BLUE TRIPLE ***STAR***

OLD IMAGE CHANGES ARE LABELED WITH A RED TRIPLE ***STAR***

OLD IMAGES REFLECT MINIMAL CHANGE (Wasted Time!) but Narrative is ALWAYS updated.

ALL IMAGES UPDATED WEEKLY, (EITHER THE MID-WEEK OR WEEKEND REPORTS).

REMEMBER: SIMPLY CLICK YOUR LIVE SUBSCRIBER LINK TO SEE THE LATEST CHART.

***THE MATASII BANK INDEX***

• The MATASII Bank Index rose this week closing at 1434.38 up +13.15 (+0.93%) on Friday.
• In the bottom panel, the MATASII Proprietary Momentum Indicator found support at the lower support level shown by a dashed black trend line and highlighted by the red arrow. It has moved up since.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK 

***THE MATASII FINANCIAL INDEX***

• The MATASII Financial Index closed at 2397.93 up +13.05 (+0.55%) on Friday.
• In the bottom panel, the MATASII Proprietary Momentum Indicator has found support shown by a dashed black trend line and highlighted by the red arrow.
• Both the Banking and Financial Index have generally mirrored each other since the Trump election win.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above: SUBSCRIBER LINK

CHART RIGHT: MAG-7 putting in the biggest down candle we can recall. Despite today's puke, the MAG is still way above the 50 day, not to mention the 200 day.

CONTROL PACKAGE

1. APPLE - AAPL - DAILY (CHART LINK)
2. AMAZON - AMZN - DAILY (CHART LINK)
3. META - META - DAILY (CHART LINK)
4. GOOGLE - GOOG - DAILY (CHART LINK)
5. NVIDIA - NVDA - DAILY (CHART LINK)
6. MICROSOFT - MSFT - DAILY (CHART LINK)
7. TESLA - TSLA - DAILY (CHART LINK)

***MAGNIFICENT 7***

CHART RIGHT: This chart makes the 2000 Dotcom Bubble look like a "minor warm-up"?

CURRENT DAY'S VIEW:

• The Mag-7 rose strongly Friday to close at 2243.57, up +53.46 (+2.44%).
• Meanwhile the MATASII Proprietary Momentum Indicator (lower panel) appears to have found near term support shown by the lightly colored orange rising trend line and marked by the red arrow.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

***NVIDIA - NVDA - DAILY***

AS GOES NVDA SO GOES THE MAG-7!

AS GOES THE MAG-7 SO GOES THE MARKET!

CHART RIGHT: NVDA is very close to a near term top that will result in a test of lower support levels, (solid white lines).

With a market cap of $3.61tn and nearly as big as the entire DAX and CAC combined, earnings are going to be a big event. To give you a scale for their astonishing earnings trajectory over such a short period of time, at the recent lows in Jan 2023 Nvidia earned $4.4bn over the preceded last 12m. However, today the consensus will see them earn $61.4bn over the last 12 months. Then, by the time we hit 2027, they are expected to earn $118.1bn LTM.

CHART RIGHT: We have not closed this much below the 50 day since September. Also worth noting is that the trend line since August lows comes in right here. NVDA can't afford to close much lower.

Today's Note:

• NVDA rose Friday to close at 144.47 up +6.16 (+4.45%).
• NVDA has found support at the 50 DMA.
• The NVDA MATASII Momentum indicator (black dashed line) in the lower panel has been broken to the upside.
• Appears NVDA has more to run on the upside.

Longer Term Note:

• At some point, the major unfilled gaps (at much lower levels) must be filled. We anticipate a likely test of the 200 DMA in Q4 2024 or Q1 2025.
• NVDA therefore may no longer become a Short to Intermediate Long Term hold, but rather a position trading stock, as other competitors enter the space, force margins and the earnings growth rate contracts. 

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

***APPLE - APPL - DAILY***

CHART RIGHT:

APPL has had a significant lift, but appears to be putting in a potential ending diagonal pattern.

CHART BELOW:

You’re paying 10x sales now to buy Apple stock.

Today's Note:

• APPL was down modestly Friday ending at 243.36 -0.49 (-0.20%).
• APPL appears to be looking for support at the 50 DMA.
• AAPL appears to have found Momentum support (middle panel) at the falling orange dotted trend line marked by the red arrow. 

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

***TESLA - TSLA - DAILY***

CHART RIGHT: Major Decoupling - Tesla takes off despite soft earnings –why?

Today's Note:

.

• TSLA rose sharply Friday to close at 410.44 up +31.16 (+8.22%).
• TSLA initially found Momentum support (middle panel) at a rising orange dotted trend line marked by the red arrow.
• We suspect Support will be found lower at the rising 50 DMA level since this is an aggressively technically traded stock.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above: SUBSCRIBER LINK

***GOOGLE - GOOG - DAILY***

Today's Note:

• GOOG closed Friday modestly higher at 193.18 up +2.56 (+1.31%).
• GOOG has found initial support at its MATASII Momentum Indicator (middle panel) shown by the light orange dotted trend line and maked by the red arrow.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:   SUBSCRIBER LINK

"CURRENCY" MARKET (Currency, Gold, Black Gold (Oil) & Bitcoin)

10Y REAL YIELD RATE (TIPS)

Real Rates have broken through its descending trend wedge channel line, (shown in the chart to the right - as of close 01/03/25). (LATEST)

The latest US NY Fed SCE has seen inflation expectations increase across the forecast horizon.

CONTROL PACKAGE

There are TEN charts we have outlined in prior chart packages, which we will continue to watch closely as a CURRENT Control Set:

1. US DOLLAR -DXY - MONTHLY (CHART LINK)
2. US DOLLAR - DXY - DAILY (CHART LINK)
3. GOLD - DAILY (CHART LINK)
4. GOLD cfd's - DAILY (CHART LINK)
5. GOLD - Integrated - Barrick Gold (CHART LINK)
6. SILVER - DAILY (CHART LINK)
7. OIL - XLE - MONTHLY (CHART LINK)
8. OIL - WTIC - MONTHLY - (CHART LINK)
9. BITCOIN - BTCUSD -WEEKLY (CHART LINK)
10. 10y TIPS - Real Rates - Daily (CHART LINK)

***US DOLLAR - DXY - DAILY***

CHART RIGHT: Moving in Tandem -- Rising Treasury Yields and a Rising Dollar are currently the same trades!

CHART RIGHT: Mighty dollar trades like a cork in water....you press it down, but it pops straight back up again. A close above the huge 107 area and things risk going very dynamic. By now most have learnt to sell the resistance....and we risk a vacuum to the upside, should we take out recent highs.

IMPORTANT - THE US ELECTION HAS POTENTIALLY MADE MAJOR CHANGES IN THE PERCEPTION OF THE US$ .



THERE IS A STRONG CHANCE THAT THE LOWS BELOW ARE

NO LONGER VALID.

CURRENT DAY'S VIEW:

• The dollar weakened on Friday closing at 108.92 down -0.334 (-0.31%).
• The dollar found overhead resistance at the MATASII Momentum Indicator's dashed black trend line marked by the red arrow in the low panel.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:   SUBSCRIBER LINK

***GOLD***

NEW--TOTAL KNOWN GOLD ETF HOLDINGS -- The trend of selling gold-backed ETFs amid rising prices and easing monetary policy highlights a significant shift in investor strategy, potentially towards other asset classes.

NEW--CHART RIGHT: Gold has consolidated inside a big triangle/wedge like formation for several months. Note we are above the 100 day again, and hitting the 50 day as of writing. Short term support: $2610, resistance $2670. We are getting very tight inside the dynamic formation. Decision time is here soon.

CHART BELOW:

• Gold closed Friday at 2638.41 down 18.785 (-0.71%).
• Gold has recently been supported and further boosted by the PBoC resuming Gold purchases in November after a six-month halt. 
• ETF buying however has been surprisingly weak over the past four years as shown by the chart above.
• Support was found again at the 100 DMA and the MATASII Momentum Indicator (marked by the red arrow in the lower panel).

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above: SUBSCRIBER LINK 

***SILVER***

CHART RIGHT:

Silver is down to the longer term trend line and trading just below the 100 day moving average. Watch closely, should the massive head and shoulders formation "kick in".

CHART RIGHT BELOW:

AI needs silver for their circuit boards. Silver has been tracking NVDA surprisingly close. Both are now weakening!

CHART BELOW:

• Silver found support at the 200 DMA at $29.597 up 0.076 (+0.26%).
• In the lower panel we see Silver has also found support at the MATASII Momentum Indicator (dashed black line).

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above: SUBSCRIBER LINK

US EQUITY MARKETS

CONTROL PACKAGE

CHART RIGHT: The SPX reversed exactly on the 100 day moving average and the trend channel lows.



There are FIVE charts we have outlined in prior chart packages that we will continue to watch closely as a CURRENT "control set":

1. The S&P 500 (CHART LINK)
2. The DJIA (CHART LINK)
3. The Russell 2000 through the IWM ETF (CHART LINK)
4. The MAGNIFICENT SEVEN (CHART ABOVE WITH MATASII CROSS - LINK)
5. Nvidia (NVDA) (CHART LINK)

***S&P 500 CFD***

• The S&P 500 cfd closed up Friday at 5947.4 +64.8 (+1.10%).
• Price resistance was found with the 50 DMA.
• The MATASII Proprietary Momentum Indicator (middle panel) has found support at a rising orange dotted trend line marked by the red arrow.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:   SUBSCRIBER LINK

***S&P 500 - Daily Our Thought Experiment***

OUR CURRENT ASSESSMENT IS THAT THE INTERMEDIATE TERM IS LIKELY TO LOOK LIKE THE FOLLOWING:

CHART RIGHT: In its base case scenario, Goldman Sachs projects a year-end 2024 price target of 5,600 for the S&P 500 index, supported by robust earnings growth and a stable price-to-earnings ratio.

NOTE: To reiterate - "the black labeled activity shown below, between now and September, looks like a "Killing Field", where the algos take Day Traders, "Dip Buyers", the "Gamma Guys" and FOMO's all out on stretchers!"

• The cash S&P 500 closed up Friday at 5942.46 +73.90 (+1.26%).
• Price resistance was found with the 50 DMA.
• The MATASII Proprietary Momentum Indicator (bottom panel) found overhead resistance at the rising black dashed trend line marked by the red arrow.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

***IWM - LONG iShare Russell 2000 ETF - Daily***

NEW--CHART RIGHT: The small-cap Russell 2000 index has faced a notable downturn in December 2024, experiencing a decline of over 8%. This marks its worst monthly performance since September 2022, reflecting a notable shift in investor confidence.

Jefferies sees Russell 2000 hitting 2715 by year-end 2025, representing a 13.5% increase.

• The firm thinks small caps will outperform large caps, both in terms of earnings growth and share price performance.
• Three further supportive things:

1. High-yield spreads near 2007 levels; balance sheets are stronger today.
2. Federal Reserve easing cycle supports smaller companies through lower borrowing costs.
3. Increased M&A activity, particularly in sub-$1B companies, expected to accelerate and broaden.

DAILY NOTE:

• The IWM - LONG iShare Russell 2000 ETF closed Friday at 224.48 up +3.29 (+1.49%).
• The IWM initially has found near term resistance at the 100 DMA.
• The IWM had found support at the Proprietary Momentum Indicator 's (lower panel) major support shown by the black dashed line and highlighted by the red arrow.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above:  SUBSCRIBER LINK

BOND MARKET

LOWER BOND YIELDS CORRECTLY SPOT A WEAKER MACRO

CONTROL PACKAGE

There are FIVE charts we have outlined in prior chart packages that we will continue to watch closely as a CURRENT "control set":

1. The 10Y TREASURY NOTE YIELD - TNX - HOURLY (CHART LINK)
2. The 10Y TREASURY NOTE YIELD - TNX - DAILY (CHART LINK)
3. The 10Y TREASURY NOTE YIELD - TNX - WEEKLY (CHART LINK)
4. The 30Y TREASURY BOND YIELD - TNX - WEEKLY (CHART LINK)
5. REAL RATES (CHART LINK)

FISHER'S EQUATION = 10Y Yield = 10Y INFLATION BE% + REAL % =  = 4.597%

CHART BELOW:

Yields following Brent Crude lower as the MOVE index (Chart right) also moves lower.

***10Y UST - TNX - WEEKLY***

CURRENT DAY'S VIEW:

• Yields rose this week to close Friday at 4.597% up +0.021 (+0.46%) for the day.
• We are at the upper channel trend line with the MA's potentially about to cross to the upside.
• The Proprietary MATASII Momentum Indicator's (lower pane) overhead resistance levels shown by the dotted black line and highlighted by the red arrow has been broken to the upside.
• We are likely headed higher which should place further pressures on the equity market.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above: SUBSCRIBER LINK

NEW--CHART RIGHT:

The US 10 year took out the negative trend line in mid December. The golden cross is very much in place (50 over 200 day). Last time we saw a similar cross was in Q3 2023. 4.65% is the big resistance area to watch. We should see rates take a breather, but you never know.

***10Y UST - TNX - HOURLY***

CURRENT DAY'S VIEW:

• A Golden Cross occurred on the Daily chart (Chart Link) with the 50 DMA crossing to the upside the 200 DMA.
• Yields rose this week to close Friday at 4.597% up +0.021 (+0.46%) for the day.
• The Proprietary MATASII Momentum Indicator (lower panel) is now showing momentum at its longer term support level (dashed black line) marked by the red arrow.

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above: SUBSCRIBER LINK

COMMODITIES

***CRB COMMODITY INDEX - MONTHLY***

• The overall Commodity Indexes, as measured by the CRB Commodity, reflect a Corrective / Consolidation is presently nearing completion.
• However, many of the individual sectors (not shown here) have already completed the Corrective / Consolidation and broken higher over the last 30-60 days.

• Examples:
• Invesco DB Agricultural Fund (DBA)
• VanEck Agribusiness (MOO)
• Food Producers (FT350 Food Producers - NMX45)
• Teucrium Agricultural Fund ETV (TAGS)
• Advisory Shares Restaurant ETF (EATZ)
• Invesco Food & Beverage ETF (PBJ)
• Teucrium Wheat Fund ETV (WEAT)
• Teucrium Corn Fund ETV (CORN)
• Teucrium Soybean Fund ETV (SOTB)
• Teucrium Sugar Fund ETV (CANE)

YOUR DESKTOP / TABLET / PHONE ANNOTATED CHART

Macro Analytics Chart Above: SUBSCRIBER LINK

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