Weekly Update 50

 The "Everything bubble" continues to rise high into the financial atmosphere! S&P500 solidly over 6000, Bitcoin over 100.000 and the preferred stocks "The Mega Caps" are at ATH´s. This week was supposed to be a calm week but turned out to be more bullish than expected when market participators are seeking to gain as much as possible into the new year. 

The Nasdaq reached ATH again this week and pulled back slightly by the end of the week. "Everything" is at ATH after an impressive run. It should be time for a consolidation period now going into the Holy weeks around Christmas and we all remember when Wall Street got coal in their socks last time around Christmas 2022. It remains to be seen how long this will keep up. Nothing in the trend shows weakness right now. 

Look at this impressive bull-chart of S&P 500. We have seen corrections about every two years, but that can not be counted as any form of indication of the future:

The level of confidence is high. The Trump effect is ongoing. The Fed will cut rates 0.25 next week but they are in no hurry. Lower rates increases the risk of a meltdown. The expectations on Bloomberg has decreased from 1,75% cuts by the end of 2025 to just 0,75% today. That is the expectations between September and today.

If we look at the 10-year/2-year Treasury Yield Spread and the correlation to US recessions in history it is apparent that it typically indicates start of the recession soon after a negative yield spread. We recently went negative at a level seen at the crises in the 80s. If that indicator still is valid we should soon enter recession.

We are now in a seasonal buy time for Goldminers. They are sold out and at low prices. If they are undervalued? Not according to investors generally. When looking at charts and news from miners we can see low price levels and positive news. FNV is at 119 with support at 115 and 105. A quality company that is not part of the "Everything bubble". AEM continues to be strong and a leader. Now scooping up another interesting junior, O3 Mining.

The Sectors:

During this week we found changes in some of the Sectors. If we begin to see weakness in the markets, it will probably first show up in the Sectors that are already the weakest today. The weakest Sector is Healthcare Sector with a negative Weekly signal. Followed by the Real Estate Sector that is not yet negative in the Weekly timeframe. Basic Materials Sector is also negative Daily and so are Financial Services, Industrials Sector, Utilities Sector.

Communication Services Sector is the biggest surprise this week as it went into a negative Daily, the first since early July.

The strongest Sectors right now are Technology Sector, Consumer Defensive Sector and Consumer Cyclical Sector. The Energy Sector has been going down for 12 straight days but not yet posting a negative Weekly though. What looked to be a breakout a couple of weeks ago has faded away and now it looks like it can break down in the Weekly timeframe soon.

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Best Regards,

Trader Sven