Here's the Deal with Markets - February 11, 2025

Economy: In Slowdown

Market Cycle: Bullish

_{Week 6 of 52 for 2024: 11.54% of the way through 2025}

Weekly Note:

A later edition of this week’s Here’s the Deal with Markets due to the Super Bowl. While being foggy headed and having trouble focusing is nothing new for the day after the Super Bowl, it is when it’s caused by food prep, cooking, cleaning, and attending a fantastic ASU hockey win on Saturday night which put the team into the Top 10 in the country, instead of booze and staying out until 2:30am.

Damn you, 44. Damn you!

The good news is that it was another stellar week for the portfolios. It’s almost like tracking the economic cycle, 4-yr Presidential cycle, seasonality, committing to learning and understanding technical analysis, having an open mind to any outcome, and choosing not to buy into the clown show of politics really does provide a tremendous edge for traders/investors.

Meanwhile, the indices continued their choppy sideways actions.

SPY looks to be forming a broadening formation/Megaphone pattern:

DIA looks to be forming an Ascending Triangle pattern:

As does QQQ:

While IWM is looking like that bottom in January is going to stick for now:

Even bond prices continue to perform and looking like they have bottomed as well. Great news until bond prices begin to outperform the indices.

*Note: These charts are through last Friday only, and do not reflect Monday’s action.

However, I’m still expecting some surprises this month and/or next month which would continue to push volatility higher until the end of the current credit cycle.

The opportunities continue to be prevalent and very rewarding for those not fixated on the Mag7 and corporate news.

Money continues to rotate into energy, utilities, and materials, as well as China and emerging markets.

The Week Ahead

Inflation takes the stage again this week with CPI and PPI data reporting on Wednesday and Thursday morning. While many were thinking that the inflationary part of the credit cycle was over, the new trend higher that began last Fall proves that is not the case. Now we settle in to see if this is merely a momentary bounce before inflation rates head back down to their 2% targets, or if this is the beginning of another trend higher to the 4%-6% range.

Unfortunately, tariffs and depleting an already extremely low supply of workers through mass deportation are both inflationary policies. So we may need a deterioration in the economy to reach the 2% inflation target.

Expect stock markets to continue to chop around their current levels this week as the next big move, either up or down, continues to set up. In the meantime, there are plenty of great opportunities for those that look to what’s going to happen based on current conditions rather than make trading/investing decisions based on what it happening today and paying attention to Legacy Media.

Economic Data to watch:

Earnings This Week

WTF of the Week

When Philadelphia wins championships in professional sports, markets tend to crash.

Quote of the Week

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