EB Daily Market Report - Thursday, January 2, 2025
Seasonality Report
I sent out the EB Monthly Seasonality Report - January earlier today. I haven't completed the ChartList just yet, and I might not be able to get to it until after MarketVision 2025. I apologize for the inconvenience, but lots going on this week. I did provide 15 or so stocks in the earlier report that very likely will be on the Top 20 List, so be sure to check that out, if you haven't already.
Executive Summary
- The new year began with futures higher overnight
- Our major indices gapped higher at the opening bell and remained in positive territory for the first 1-2 hours; weakness has carried these indices into negative territory this afternoon
- Value stocks are performing better than growth stocks to open 2025; energy (XLE, +1.10%) and utilities (XLU, +0.43%) are the top 2 performing sectors
- Meanwhile, consumer discretionary (XLY, -1.36%) and technology (XLK, -0.42%) are among today's worst sectors
- Cryptocurrencies are off to a solid 2025 start as Solana ($SOLUSD, +6.94%) is surging back above its 20-day EMA
- Commodities are performing very well today, as crude oil ($WTIC, +2.06%) tops $73 per barrel for the first time since mid-October
- The 10-year treasury yield ($TNX) is essentially flat today; I'll be watching to see if it breaks above 4.64% to perhaps begin another leg higher in rates
- Renewable energy ($DWCREE, +5.50%), after suffering through a brutal 2024, is off to a great start this year
Market Outlook
To start 2025, I know there's a lot of talk suggesting that inflation could reignite and become a major problem over the next year. The U.S. Dollar (UUP), which would typically sell off big time before and during an inflationary surge, is SOARING. Sorry, I'm not buying the inflation story for 2025. Check out the UUP right now:
Sorry, but this just doesn't pass the smell test. I'll talk more about this on Saturday at MarketVision 2025.
Sectors/Industries
The XLC loves the month of January and we're seeing a key entry point as we open a brand new year. Check it out:
The test of the 50-day SMA and the approach of a PPO centerline test is EXACTLY what I look for after a negative divergence prints and weakness begins. At this point, the XLC is poised to move back higher if the overall market cooperates. The XLC has outperformed the S&P 500 in every January since 2013 - 12 years running:
I included this in the Seasonality Report, issued earlier today, but I wanted to make sure that everyone sees this. Internet stocks typically lead the XLC in January, so there could be significant trading opportunities in that space as we open 2025.
ChartLists and Trading Strategies
From our portfolios that are testing their respective 20-day EMAs:
PLTR, CLS, AMZN, ALAB, RDDT
From our portfolios that are testing their respective 50-day SMAs:
GRMN, ZM, LMND
From our portfolios that are testing key price support:
ISRG
Upcoming Earnings
There will be no earnings reports of significance released either today or tomorrow.
Economic Reports
Initial jobless claims: 211,000 (actual) vs. 225,000 (estimate)
December PMI manufacturing: 49.4 (actual) vs. 48.3 (estimate)
November construction spending: +0.0% (actual) vs. +0.3% (estimate)
Happy trading!
Tom