The Weekly Trend
The Weekly Trend
Episode 236: Cracks in the Ice
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In this week's episode, Ian and Kevin discuss the major indices and sectors that are either testing their election gaps or are already through their election gaps. They also discuss areas of the market below 200 day moving averages, recent moves in bonds, strong dollar, gold, commodities, and international equities.
Welcome back to the Weekly Trend Podcast. Today is January 10th, 2025. S& P is trading at 58. 24. My name is Ian McMillan. Today I am joined by Kevin Ferrari. So, 58. 24, Kevin. Haven't started off an episode with a number that low. So, In quite a while.
kevin_1_01-10-2025_101200Yeah, it's been a couple weeks for sure, if not longer.
ian_2_01-10-2025_111159Yeah. Since the
kevin_1_01-10-2025_101200Really, November,
ian_2_01-10-2025_111159November, it would've been the Friday before the election.
kevin_1_01-10-2025_101200Yeah, it's definitely this 5800 level. I mean, broadly speaking, depending on how you draw it, maybe like 5750 ish, somewhere in there. I
ian_2_01-10-2025_111159Yeah. If we
kevin_1_01-10-2025_101200it holds
ian_2_01-10-2025_111159go into like, yeah, this, you know, are we gonna fill this gap? Right. We have the election gap, election gap's, not super abnormal. Unfortunate that. Most sectors most individual stocks I think all the just the Russell as far as indices, or is the Dow giving this back as well? Dow has given it back.
kevin_1_01-10-2025_101200Mm hmm.
ian_2_01-10-2025_111159Dow actually below the close from that Tuesday. So if you remember, most of the, most of the move happened overnight, right? So then that shows up, you know, if it's not futures, it's going to show up on the, on the Wednesday gap at Wednesday the 6th. So lots and lots of areas in general into those gaps or through them, the Dow being one of them. I gotta be honest, doesn't leave me with a super warm and fuzzy feeling.
kevin_1_01-10-2025_101200No, not really.
ian_2_01-10-2025_111159I'm not saying it can't be fixed but they're not, they're not fixing it yet.
kevin_1_01-10-2025_101200Right? Yeah, I mean, because even if you look at kind of more your safety sectors, like staples, I mean, pretty much been selling off since beginning of December.
ian_2_01-10-2025_111159Yeah?
kevin_1_01-10-2025_101200You know, utilities, I guess, kind of looked essentially the same, but towards the middle of December of, leveled off, basically been moving sideways since then.
ian_2_01-10-2025_111159Staples below a 200 day moving average. I don't know, so, what do you think about that? Staples, one of the first to go below a 200 day moving average.
kevin_1_01-10-2025_101200Yeah, I guess, academically speaking, right, that wouldn't,
ian_2_01-10-2025_111159It's kinda weird.
kevin_1_01-10-2025_101200no.
ian_2_01-10-2025_111159You'd think it would be one, right? It's what? S& P not below a 200 day. NASDAQ's not. Mid caps and small caps, close. Dow not below a 200 day. But Staples. I don't know, kind of. I don't know, if we're in a rush to get out of Staples, I don't, I don't know how that makes me feel.
kevin_1_01-10-2025_101200And then where are we going? I mean, if it was, you know, if we were talking like below a relative 200 day only and then an absolute basis that are at least holding up, I mean, that'd be different story, right? Like if you're trying to get out of staples into something risk on, but if you're just on an absolute basis, exiting some of those areas, I mean, that's a kind of a different story.
ian_2_01-10-2025_111159I mean, I guess healthcare's been below a 200 day for a bit.
kevin_1_01-10-2025_101200right. Really Staples using XLP if it kind of holds the 76 area. I mean, there's a lot of chop in there. If you look to the left for a couple of years,
ian_2_01-10-2025_111159Ugh,
kevin_1_01-10-2025_101200it
ian_2_01-10-2025_111159yeah.
kevin_1_01-10-2025_101200I guess, be out of the question to kind of bumble around in here for a while, but.
ian_2_01-10-2025_111159Yeah, I guess this could be a retest. I don't know why we have to go back this far.
kevin_1_01-10-2025_101200hmm.
ian_2_01-10-2025_111159Would have much rather gone sideways. Energy getting a little bit of a move this week. Also a sector that's below its 200 day, but that thing's been sideways for two and a half years at this point.
kevin_1_01-10-2025_101200Right.
ian_2_01-10-2025_111159So I put that in a slightly different category. Crude had a big move. You shared some returns. Before we hopped on for the week, what, what were the outperformers for the week?
kevin_1_01-10-2025_101200Yeah. The sector level, really the only thing. As of a few minutes ago anyway, that was positive was, materials, energy and healthcare, basically the three sectors that have been kind of getting beat up the most.
ian_2_01-10-2025_111159I'll say that do not own any of that. And neither do our clients,
kevin_1_01-10-2025_101200Mm hmm.
ian_2_01-10-2025_111159I guess we got a little bit of energy and like one healthcare stock in the ETF, but I
kevin_1_01-10-2025_101200Right.
ian_2_01-10-2025_111159mean, those were probably your three worst sectors of 2024
kevin_1_01-10-2025_101200Mm hmm. Mm
ian_2_01-10-2025_111159staples up there too. But, you know, I mean, staples real estate was up there, but those three definitely. We're laggards last year.
kevin_1_01-10-2025_101200hmm. And I mean, on the industry side, airlines kind of leading the way, pretty solid week, which really the airlines have been looking pretty constructive for,
ian_2_01-10-2025_111159Yeah.
kevin_1_01-10-2025_101200least a month, maybe a little longer. Mm hmm.
ian_2_01-10-2025_111159And that's one of those, I mean, look at airlines out to jets out to new heist today,
kevin_1_01-10-2025_101200Mm
ian_2_01-10-2025_111159I guess you would have, you know, it's been consolidating for the last month. That was kind of maybe a spot to get in, but absolutely huge. Yeah. They like the airlines.
kevin_1_01-10-2025_101200hmm. I
ian_2_01-10-2025_111159Oh,
kevin_1_01-10-2025_101200the, of travel theme for the last couple months. Know, really it was pretty strong. Like some of your hotels doing pretty good. The cruises lines were rolling there for a while. I mean, those have kind of, pulled back a little bit, but yeah, I you know, at least something's holding up, right. You know,
ian_2_01-10-2025_111159yeah. You
kevin_1_01-10-2025_101200So
ian_2_01-10-2025_111159said gold miners.
kevin_1_01-10-2025_101200which is why I think
ian_2_01-10-2025_111159Yeah. What are we doing? Are we buying? Are we buying? Gold we going all in?
kevin_1_01-10-2025_101200I
ian_2_01-10-2025_111159It's kind of on an absolute basis. It's, I mean, it looks fine. Like it's constructive.
kevin_1_01-10-2025_101200Yep. Yeah. I mean, if you, if you, looking for a place to jump in. I mean, depending on what you're using, like, GLD above 250 looks pretty cool.
ian_2_01-10-2025_111159Yeah, On a relative basis What do you think? I don't know. What we need is some gold ETFs priced in foreign currencies
kevin_1_01-10-2025_101200No.
ian_2_01-10-2025_111159That'd be better than gold priced in the dollar, which has not really stopped
kevin_1_01-10-2025_101200No.
ian_2_01-10-2025_111159going up back to, I mean, we're pushing 110 right now on DXY should be our highest level since in over two years, about 26 months. Hmm. Strong dollar. So we are still in the strong dollar is a headwind for stocks environment. I could change right now. Market participants not, not really liking strong door, or maybe it's, they don't like the higher rates. I don't know.
kevin_1_01-10-2025_101200Right.
ian_2_01-10-2025_111159Rates out to, you know, 30 year yield. Also back to 14 month highs.
kevin_1_01-10-2025_101200Mm hmm.
ian_2_01-10-2025_111159That's where we were in November, 2023. So no slowing down with rates. Now that's a gap fill. You're using like a T Y X. So we'll see if that means anything or if we just cruise right through. But rates again, probably should not be a surprise that rates have consolidated for a little over a year. And as much as we have spent talking about interest rates as a nation in the last 12 months, it didn't move a ton in 2024.
kevin_1_01-10-2025_101200Mm mm. Not
ian_2_01-10-2025_111159Wow. Essentially, you know, okay, I guess so, December, November, December 2023 we had a big drawdown in rates, right to starting in January 2024, you know, we're at 4 percent on the 30 year, we end the year at 4. 8%. So you could say that, but truly you look out on the chart, and this looks, I mean, this looks constructive to this. If this was a stock or any other asset, I would say, yeah, I think it goes higher.
kevin_1_01-10-2025_101200Mm hmm. Right.
ian_2_01-10-2025_111159Alright, so rates higher, dollar higher, so hopefully a stronger dollar is at least keeping commodity prices down, right?
kevin_1_01-10-2025_101200Yeah, I would say for the most part, I mean, kind of talked about it a little bit, cattle keeps moving higher that's been
ian_2_01-10-2025_111159Cattle.
kevin_1_01-10-2025_101200consistent,
ian_2_01-10-2025_111159Yes, it has been.
kevin_1_01-10-2025_101200so I don't know if that's like a Chick fil A commercial there, eat more chicken, I guess, I don't know how that plays out guess grains pretty quiet, I mean, corn more near term has kind of an interesting look, mm
ian_2_01-10-2025_111159Yeah, wheat cheap. Wheat's pretty cheap.
kevin_1_01-10-2025_101200soybeans too, so it, if you're looking at broad kind of basket commodities with the pop and oil, I mean, they look a little bit more lively now.
ian_2_01-10-2025_111159Yeah.
kevin_1_01-10-2025_101200but it's not like you're seeing, you know, real broad participation in the commodity front, at least necessarily now,
ian_2_01-10-2025_111159Oil back to, I mean, multi month highs, but 75 a barrel. This is enough. I mean, this is. where we've been for basically for four and a half years,
kevin_1_01-10-2025_101200No, no, it's struggled here before. So, I
ian_2_01-10-2025_111159give or take.
kevin_1_01-10-2025_101200it's not like it's moved above a really important level to where we're going to see, or at least expecting kind of crazy appreciation.
ian_2_01-10-2025_111159NatGas on the other hand, NatGas will close the week out at two year highs.
kevin_1_01-10-2025_101200Hmm.
ian_2_01-10-2025_111159So for those of you that use natural gas, as my wife has recently realized, yeah, expect those bills to be a little bigger in the coming months. Any other commodities that jump out with you? I'd say coffee stayed pretty strong.
kevin_1_01-10-2025_101200Coco is one I feel like we talked about for a while, hanging in there.
ian_2_01-10-2025_111159Lumber's still pretty weak. Not a huge move in lumber. These sugars doing better. Sugar's getting cheaper. Also back to really where we've been the last few years. Sugar, same price for sugar. We were also paying in 1974. So anyone wants to give you any Worries about the price of sugar. No inflation there. Same with milk. Paying the same price for milk you were paying in 2007. Juice.
kevin_1_01-10-2025_101200Yeah, Orange Juice kind of slowing down. I mean, that was one that was performing pretty well there for a while,
ian_2_01-10-2025_111159Yeah, orange juice really gave a lot of that move back, didn't it? You can have, you can have a cheap meal out there. Rice, soybeans, some toast, glass of orange juice. Yeah, probably want to stay away from the coffee and beef though. Beef sausage.
kevin_1_01-10-2025_101200Which is tough. I'm kind of a
ian_2_01-10-2025_111159It is tough.
kevin_1_01-10-2025_101200of guy, so I don't
ian_2_01-10-2025_111159I mean, imagine telling your average American that's what you need to stay, stay away from.
kevin_1_01-10-2025_101200I think it's worth it. I'll pay a little bit higher for beef, but yeah, nothing too crazy in commodities. You know what, I guess the thing that's kind of nice to see, which, you know, Junkbond's kind of around this 95. level, you'd like to see that hold, but relatively speaking, your lower credit quality bonds still seem to be kind
ian_2_01-10-2025_111159Yeah.
kevin_1_01-10-2025_101200yet, at least as of now.
ian_2_01-10-2025_111159Jane Cavers, AGG. New highs this week.
kevin_1_01-10-2025_101200So it's not like that risk on relationships necessarily flipped yet.
ian_2_01-10-2025_111159It's a good point. It's a very good point.
kevin_1_01-10-2025_101200So that's good
ian_2_01-10-2025_111159It's just tough. Still no, and I haven't looked at credit spreads. Let's see what our credit spreads are doing. Eh, I mean flattened out, but they're not screaming upwards.
kevin_1_01-10-2025_101200And
ian_2_01-10-2025_111159were at the election. So we'll see if that means anything in the coming weeks. Maybe you gotta, maybe you gotta go sideways before you turn upwards. I don't know, but to your point. J and K. I think it's a fair, fair point to say not a ton of warning signs from fixed income quite yet.
kevin_1_01-10-2025_101200I think it's kind of one of those weeks where it seems to be like a wait and see week, see what you get, you know, next week or the following week, kind of testing some of these gaps, holding the bottom of some of these ranges so far. So, I mean, it could be, you know, just as simple as we're testing the bottom sides of some of these ranges and then, you know, we're back up next week. But
ian_2_01-10-2025_111159Hmm.
kevin_1_01-10-2025_101200so I guess one of those things until they break it, I mean, you really have to kind of assume that things are going to hold here but it doesn't necessarily leave you with any warm and fuzzy feelings to see kind of the, the broad selling though, necessarily.
ian_2_01-10-2025_111159Broad sounding right, breath has been bad. We've had some spurts of bad breath, you know, over 2024, but certainly, Mid December, late December, we started getting some less than stellar numbers. I know, only like half of the S& P. It's above a 200 day. I think the average stock is below a 200 day. I mean, NYA Composites sittin right there.
kevin_1_01-10-2025_101200Apple losing 235 here is kind of a tough one. I mean, that's a pretty bad look.
ian_2_01-10-2025_111159That is definitely not what Mmm, that's a tough candle. 4 percent on the day.
kevin_1_01-10-2025_101200Nvidia getting hit pretty hard a couple days ago, losing 150, that
ian_2_01-10-2025_111159Yeah, I think you know with Apple if you're gonna use it as a as a tailwind right broke out late late November early December We got to cheer that right. Oh, look at Apple. Look at Apple it's gonna be a good tailwind from the market and it was for a bit but Yeah, we've now given all that and then some back.
kevin_1_01-10-2025_101200you know, so.
ian_2_01-10-2025_111159Microsoft continues to can't really get above this 430 level. Amazon's held together okay, as far as megacaps.
kevin_1_01-10-2025_101200Yeah, it's not
ian_2_01-10-2025_111159bad.
kevin_1_01-10-2025_101200all of your Magnificent Seven are
ian_2_01-10-2025_111159You know, Google's held up fine.
kevin_1_01-10-2025_101200right?
ian_2_01-10-2025_111159But yeah, Apple, and unfortunately it is an important one.
kevin_1_01-10-2025_101200I mean, Meta's hanging in there, kind of a little bit of a mixed bag in the Mega Cap space, but, I mean, it's one of those things where, I don't know if you'd call it kind of the weight of evidence, right, where you're starting to see some of these, Pullbacks and some of these kind of more near term intermediate levels start to break where it gets to the point where Would I be necessarily shocked if like indices started breaking down now following this? I mean, no I you can't necessarily jump the gun and assume that's gonna happen, right? I mean long term trend still up so
ian_2_01-10-2025_111159Trends still up. I'll tell you, another one I put on the Unfortunate Mood, Semiconductors. Nice big pop on Monday. And we have spent four, well I guess three days, market was closed. We've spent the last three days giving all that back, back to where we were. Beginning in January. So just those things, and you know, on the back of, like you said, Nvidia. Nvidia. Really unfortunate look there.
kevin_1_01-10-2025_101200TSM trying to hold the breakout, you know is kind of an interesting one. I mean, that's
ian_2_01-10-2025_111159Tesla lost its breakout to all time highs. Now, I mean, you could say it's just like a little bit of a deeper retest or something. I could see that, but technically, probably fits the failed breakout category. Not, I mean, it's not a death blow, but there's, things continue to kind of Oh, no, we're losing soldiers underneath the surface here
kevin_1_01-10-2025_101200things are just starting to get kind of messy.
ian_2_01-10-2025_111159and they've been messy. I get it. You know, you could say that They've been messy if you look at breadth. Well our benchmarks the s& p i'd say the s& p Really has been fine Until today if we if we were to close here, I think that's an I think that's an unfortunate Look on a price chart.
kevin_1_01-10-2025_101200Mm hmm. I think it'd be, if it loses that gap, it'd be a little bit more nervous.
ian_2_01-10-2025_111159Oh, yeah, that would be Then I assume you're going at least to the 200 day. I mean, maybe that's 56 50 But 200 day might even be there by then
kevin_1_01-10-2025_101200Well, that's where we talking about that a couple
ian_2_01-10-2025_111159They were
kevin_1_01-10-2025_101200to where if we, you know, cause right, let's say, I mean, you lose 5, 800 that, I mean, your next, you know, level that you'd expect to kind of hold is like what 5660,
ian_2_01-10-2025_11115950.
kevin_1_01-10-2025_101200it
ian_2_01-10-2025_111159Yeah. Yeah these these july highs
kevin_1_01-10-2025_101200which, and kind of to your point, I mean, we're getting pretty close to that, the 200 days approaching that pretty quick. So, I
ian_2_01-10-2025_111159So you'd have some I
kevin_1_01-10-2025_101200mean, you do have some important. Levels, they're converging. I mean, you're definitely gonna find out at that point, right? That's I mean, I don't think you're lying in the sand gets much stronger than that.
ian_2_01-10-2025_111159We know Adpv will kick into cash if we go below the 200 day And of course, the podcast this week brought to you by the Adaptive Select ETF. ETF. Listed on the NYSE under ticker ADPV, helps investors access two of the most prevalent factors in markets, momentum and relative strength, through proprietary identification methods. The Adaptive Select ETF attempts to own the strongest 25 large cap stocks when the market is in an uptrend. And since not all market environments are the same, Adaptive Select seeks to prevent Extended market declines by moving to short term treasury bills and cash during market downtrends. Investors can find out more including how to invest in ADPV by visiting ADPVETF. com or calling 1 833 880 5200. As always, investing involves risk, including the possible loss of principal. ADPV is distributed by Quasar Distributors, LLC. Mentioned earlier, small caps, mid caps, man, there's a lot of stocks that are right there. And then they, and they've got these, I don't like those charts. If you took like a IWM or an MVY, it feels so bare flaggy to me. Barely got any bounce out of them the last couple of weeks. I mean, they got a lot to prove. I guess that's saying nothing new. They've underperformed for two years now. Maybe it's another year. I mean, maybe the megacamps. MGK. It's above a rally of 200 a day. We'll see.
kevin_1_01-10-2025_101200Yeah, I'm GV pretty much right at it's 200 day
ian_2_01-10-2025_111159Fangs. FNGS kind of losing its consolidate. I don't know. We'll see. There are, there are cracks in the foundation out there. Not to be an alarmist. And we talk about, hey, bull market will, will come to an end at some point. Or at least this stretch of it.
kevin_1_01-10-2025_101200Right
ian_2_01-10-2025_111159I think we gotta keep in mind, we just had a bear market in 2022. So, we're really only two years into this. You could argue we're one year into it, because we just broke out to all new, Time highs above 4, 800 last January, like a year ago, mid, mid January. So, we didn't get a 10 percent correction last year. Or if we did, you know, it was like right on 10 percent or nine and a half or one of those things.
kevin_1_01-10-2025_101200time will tell right?
ian_2_01-10-2025_111159Yeah, I don't want to be, I like getting on here and talking about uptrends.
kevin_1_01-10-2025_101200It's definitely a lot easier,
ian_2_01-10-2025_111159Yeah.
kevin_1_01-10-2025_101200I don't know. I mean the greater frequency You know kind of those more corrective or like moves Right in recent history and like I don't know I kind of start to wonder is that gonna be the mo going forward now Like is it? gonna be more common than it was in the past and that theme kind of continues forward. It's hard to say
ian_2_01-10-2025_111159Yeah, VIX, I mean VIX is back to 19. I guess that's not terrible. We had the big spike mid December. Of course, there's a lot of stats. I think I remember one. It Any time the VIX has moved over 50 percent in one day, kind of like a month later, it's substantially lower.
kevin_1_01-10-2025_101200Right,
ian_2_01-10-2025_111159Like, every single time. And I don't know, it'll be, maybe that's gonna be our first, like, Every, you know, once in a hundred year, or, you know, Dave loves to talk about every years there's multiple, oh this has never happened before, or this hasn't happened since 1832, you know, stuff like that.
kevin_1_01-10-2025_101200right
ian_2_01-10-2025_111159So, I don't know, maybe the VIX will be one of those, Anything else you'd like to leave our listeners with today, Kevin?
kevin_1_01-10-2025_101200No, I mean, I just think kind of what I said before it's one of those things where mean You start seeing enough things sell off It kind of creates that condition where if we start losing some of these more important levels on the major indices Would I be too shocked? No, but you can't really act until that happens necessarily, right? It's just one of those You know, it just seems like one of those wait and see weeks really so far, see if the gap holds on SPX, if not
ian_2_01-10-2025_111159it looking better overseas? Are we supposed to be buying?
kevin_1_01-10-2025_101200emerging markets definitely doesn't,
ian_2_01-10-2025_111159Oof. Terrible. Yeah, they're below 200 a day. EFA a day.
kevin_1_01-10-2025_101200you know, Latin
ian_2_01-10-2025_111159These are not, yeah,
kevin_1_01-10-2025_101200looked good for a while.
ian_2_01-10-2025_111159maybe Germany, the only place in Europe above a 200 day, maybe average, I guess the DACs, the Dax in their domestic currency. Dax in Euros. Yeah, euros looks fine. Dax in dollars. Not that good.
kevin_1_01-10-2025_101200I mean, Argentina is still holding up. No issues there.
ian_2_01-10-2025_111159Argentina. I bet our friends in Israel, they still doing fine. Yeah. Israel's holding up Well, new re PIs till, I mean. Not the best week this week, but
kevin_1_01-10-2025_101200Yeah. It's kind of feel at EIS
ian_2_01-10-2025_111159yeah, I don't know if I'm buying EIS now
kevin_1_01-10-2025_101200No,
ian_2_01-10-2025_111159as we get back to the late 2021 highs
kevin_1_01-10-2025_101200man. Kind of a little bit of a speed bump there.
ian_2_01-10-2025_111159and RSI Divergence, so we'll see maybe there's nowhere to hide anymore. Maybe this is it Eventually, we got to reach this point. So
kevin_1_01-10-2025_101200All right.
ian_2_01-10-2025_111159alrighty. Well, thank you so much for joining us today. Kevin really appreciate it
kevin_1_01-10-2025_101200Wish there was a. More nice things to talk about, I guess.
ian_2_01-10-2025_111159Maybe next week
kevin_1_01-10-2025_101200Right? I mean, it's
ian_2_01-10-2025_111159maybe
kevin_1_01-10-2025_101200over. It's just, we'll find out. That's the nice thing, right? We'll always find out. Eventually. And we kinda know the steps that have to happen to get to that point. So now
ian_2_01-10-2025_111159We do. I think you laid it out really nicely. Below 58, 50. Get this gap. That'll be the election gap. See if that gets filled. It's gonna take you straight to 56. Whatever you want to call it. 70.
kevin_1_01-10-2025_101200Mm hmm.
ian_2_01-10-2025_11115970. The July highs.
kevin_1_01-10-2025_101200Then the
ian_2_01-10-2025_111159And below that, below that, you have you've definitely entered slippery territory.
kevin_1_01-10-2025_101200mean, the 200 day is, like, four, four and a half percent away. So,
ian_2_01-10-2025_111159Yeah.
kevin_1_01-10-2025_101200and I mean, it's not like that's a, crazy move to go and test the 200 day.
ian_2_01-10-2025_111159No, it's not
kevin_1_01-10-2025_101200And then, I mean, then we'll find out what everybody's about. Cool.
ian_2_01-10-2025_111159we will
kevin_1_01-10-2025_101200And that's game on from there, right? One way or the other?
ian_2_01-10-2025_111159yeah, are you gonna be sitting in cash twiddling on our thumbs or the uptrend stays intact?
kevin_1_01-10-2025_101200Mm hmm. For sure.
ian_2_01-10-2025_111159All right. Well, have a great weekend everyone and we'll see you next week.
kevin_1_01-10-2025_101200Yep, take care everybody.