1/7 Recap

The SPY broke down again today and it looks like yesterday may have been a headfake. We had that huge tech rally into the keynote from Jensen at CES last night and he delivered but as always, it was a sell the news event with NVDA plunging 5% bringing everything down with it. We are once again below the 50 day moving average and we will have to see where we close today. I’d say get used to this, 2025 is going to be a chopfest with a lot of headfakes, the smooth sailing of the last 2 years is over.

And why will it be a chopfest? Look at this chart below. Stocks are trading at a silly valuation with where yields are right now, the TLT cannot catch a bid seemingly even while yielding 5%. So how do you get buyers to step in for bonds? You make stocks less attractive. The fed has openly stated in the past how they would like to push stocks lower at certain times and it wouldn’t shock me if we start hearing more of that rhetoric soon.

Recent Trades

I didn’t highlight these, but in yesterday’s recap there were 3 large trades on MU in the table. Overnight we got that NVDA keynote from Jensen last night reiterated how big a winner MU would be and sure enough it is up 6% today in this weak tape. It’s rare to see a large cap make a big move without a plethora of bullish activity beforehand and they were loading Micron right before the big event yesterday.

My Open Book