EB Daily Market Report - Tuesday, February 11, 2025
It's another day of yo-yo, choppy action. Our major indices began the day in negative territory, rallied, then appears to be continuing this pattern throughout the balance of the day. Without much in the way of economic news and much lighter earnings news, our key indices are simply trading in fairly narrow trading ranges.
Value (IWD, +0.23%) is leading growth (IWF, -0.20%), while the more aggressive discretionary stocks (XLY, -1.31%) are trailing staples stocks (XLP, +0.67%). This type of behavior, though only one day, isn't a great sign for short-term action.
Remember, the first half of calendar quarters are bullish, but the second half of calendar quarters tend to be much more cautious. Today is February 11th, so we're moving closer and closer to the second half of Q1, which starts on February 16th (next week). In the EB Weekly Market Report sent out yesterday, the seasonal strength this week leads us to significant seasonal weakness. Check out the next couple weeks:
- February 11th: +64.51%
- February 12th: +53.27%
- February 13th: +29.53%
- February 14th: +60.70%
- February 15th: +82.64%
- February 16th: -39.94%
- February 17th: -52.28%
- February 18th: -13.59%
- February 19th: -50.81%
- February 20th: -19.32%
- February 21st: -111.19%
- February 22nd: -11.55%
- February 23rd: -35.59%
- February 24th: +64.89%
- February 25th: +15.15%
Seasonality points to this being a solid period, but rotation and sentiment would argue. The 8 consecutive calendar day period, starting on the 16th, is unusual as we don't typically see that many days of weakness in a row. It just underscores another one of the challenges we face.
Anyhow, we'll just keep doing what we're doing, which is remain cautious until we get clearer skies ahead.
Happy trading!
Tom