PART 1: Don't Panic Until We Have A Reason To

New Year Concerns

»CLUB/EDGE client post Tuesday, November 26th.

Trader’s Gut

Monday: "64% of the tape today was calls – the highest in the last 1 year" (GS)

Monday: 10Y2Y Yield Curve inversion lasted exactly one nano second.

Pretty clear that market is not interested in rolling over right now...

Snippet from my Monday #trading-room-notes:

Newly announced TSY Secretary Scott Bessent as reason for season in market gap up with interest-rate-sensitive sectors + stocks.

The VALUE rotation continues as GROWTH (eg NVDA falls back to 136 to digest)...

But structural buying flows are still in the building as breadth indicators gaps up into ATH!!

From Tuesday #trading-room-notes:

Yes, I’m still expecting a run into mid-Jan and then that’s it. I do expect a roll-over of size next year so VERY hard for me to rec’d big trend longs as we enter EOY, but not hard to still see lots of bullish swings…

My volume indicator that showed systematic buying since WED AT 3PM 11/20 has stopped going up. But VIX hasn’t stopped falling.

Truth be told, I felt heavy coming into the trading week because I really want to play the theme I've been expecting: "Melt-Up Into Melt-Down", but then I had too much time on my hands Sunday to think about what that means on the other side...

And then Monday client Anne asked me, and I answered honestly out loud when she asked, if I would buy ANY of my current Trend longs breaking into ATH here.

I said: "No. Because I expect 2025 to be a bloodbath for stocks".