Nick Goold
Latest Political News
President-elect Donald Trump continues to shape his incoming administration with notable and controversial appointments, including naming David Sacks, a close ally of Elon Musk from their PayPal days, as “White House AI & Crypto Czar.” Sacks will lead efforts to create a “legal framework” for cryptocurrency, guide AI policy, and chair the Presidential Council of Advisors for Science and Technology. Meanwhile, President Joe Biden issued an unconditional pardon for his son, Hunter Biden, citing unfair prosecution over tax and gun charges, a move that has drawn criticism from both Republicans and some Democrats and could embolden Trump to push his agenda more aggressively.
Volatility Index
VIX Last Week
Open: 14.25 High: 14.49 Low: 13.72 Close: 13.84
Summary
The VIX continued to edge lower over the past week, trading within a narrow range as financial markets remained strong and steady. With no significant surprises and year-end holidays approaching, expected volatility is declining, reflecting the calm in the markets.
VIX Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
The VIX is likely to remain under pressure in the short term, but with the index nearing its 2024 lows at 12.18, selling at these levels could carry significant risks. Traders may find greater value in considering buying the VIX if U.S. equity markets begin to show signs of weakness.
Potential Impact of the Trump Presidency
With Trump’s clear majority victory, the VIX is expected to settle at lower levels as market confidence grows around continued business-friendly and market-stabilizing policies. However, anticipate periods of quick VIX spikes as new policies, especially those related to trade and international relations, are introduced.
Stock Indices
Dow Jones Index Last Week
Open: 44,971 High: 45,104 Low: 44,604 Close: 44,641
Nikkei 225 Last Week
Open 38,254 High 39,765 Low 37,947 Close 39,294
Summary
The Dow edged slightly lower for the week as the index hovered near historic highs during a quiet trading period. On Thursday, Fed Chair Jerome Powell noted that the Fed is not “in a hurry” to reduce interest rates, which weighed slightly on sentiment. U.S. employment data came in slightly better than expected, though the unemployment rate rose to 4.2%. The data was largely in line with expectations, with Fed funds futures reflecting an 85% likelihood of another U.S. rate cut at the upcoming FOMC meeting this month. Meanwhile, the Nikkei 225 had a positive week as concerns over U.S. tariffs under a Trump administration eased, and the USD/JPY held support at 150.
Dow Weekly Chart
Nikkei 225 Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
The Dow could face pressure this week after resistance held at historical highs and the index closed below the 10-day moving average for the first time since November 15. As long as the Dow remains below this level, short-term traders may find profitable opportunities by selling and targeting a test of $44,000. Medium-term prospects for the Dow remain positive, however. The Nikkei showed unexpected strength last week, but with the market staying subdued ahead of the Bank of Japan meeting on December 18-19, range trading appears to be the best strategy.
Potential Impact of the Trump Presidency
A Trump win is expected to benefit the Dow, with the market anticipating tax cuts and deregulation. However, Trump’s ‘America First’ policies and potential tariff increases could pose challenges. This outcome may be less favorable for the Nikkei, as Trump could push for a stronger yen to support U.S. exports, which may hurt Japanese exporters and place downward pressure on the index.
Energy
Oil (WTI) Last Week
Open: 68.06 High: 70.57 Low: 67.04 Close: 67.17
Summary
WTI made an attempt to push higher last week after OPEC+ announced a delay in its expected output hike, but the move lacked sufficient momentum to hold. Sellers quickly returned as the market remains under pressure from persistent concerns over weak global demand and excessive supply, pushing WTI to close near its weekly lows.
Oil (WTI) Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
After last week's negative close and with technical indicators now pointing lower, a break of support at $67 and a test of the yearly low at $65.51 appears likely before the end of the year. For both short- and medium-term traders, focusing on selling opportunities seems to be the best strategy.
Potential Impact of the Trump Presidency
The Trump victory is expected to boost US oil production, potentially putting downward pressure on prices as supply rises. Additionally, Trump’s efforts to end unrest in the Middle East could further soften prices if successful. A strong USD under his presidency could also weaken WTI prices.
Crypto
Bitcoin Last Week
Open: 96,796 High: 104,581 Low: 90,921 Close: 99,942
Summary
Bitcoin surged above $100,000 last week, marking a pivotal moment in the digital asset space. This rally followed U.S. President-elect Trump's nomination of pro-crypto Paul Atkins to head the Securities and Exchange Commission, a move seen as highly supportive for the digital asset ecosystem given Atkins' deep understanding of the market. After breaking the $100,000 level, significant liquidation drove prices back down to the $90,000 support, only for the market to rebound strongly on robust demand, highlighting the underlying optimism among traders.
Bitcoin Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
Bitcoin remains in an uptrend despite another round of profit-taking selling, which brought it back below $100,000. With the $100,000 milestone reached, a period of consolidation is likely, offering short-term traders the best opportunities through range trading in this week’s volatile conditions. Medium-term investors are encouraged to continue targeting higher levels, driven by the positive impact of Trump’s pro-Bitcoin policies.
Potential Impact of the Trump Presidency
A Trump victory is clearly bullish for Bitcoin, as Trump and his team are openly crypto-friendly. This supportive stance could drive Bitcoin toward $100,000 or higher in a favourable policy environment.
Upcoming Political & Economic Events
The key events driving the market this week include the U.S. inflation data on Wednesday and Thursday, which remains crucial despite signs that inflation is now under control. Traders will also closely monitor the ongoing unrest in Syria and its potential negative impact on market sentiment, as well as broader instability in the Middle East. Additionally, attention will turn toward preparations for the critical central bank meetings in the U.S. and Japan scheduled for next week.
Potential Market Impact
The VIX remains under pressure but is nearing its 2024 lows at 12.18, making selling risky at these levels. Traders might find better value in buying the VIX if U.S. equities, which have shown signs of resistance near historical highs, begin to weaken. The Dow closed below the 10-day moving average for the first time since November 15, signaling potential short-term selling opportunities targeting 44,000, though medium-term prospects remain positive. Meanwhile, the Nikkei's strength last week could fade as traders focus on range trading ahead of the Bank of Japan meeting.
WTI faces further downside risk, with a likely break of $67 support and a test of $65.51 before year-end, making selling opportunities favorable for short and medium-term traders. Bitcoin surged past $100,000 last week before profit-taking selling pushed it back to $90,000 support. However, robust demand sparked a strong rebound, highlighting optimism among traders, bolstered by U.S. President-elect Trump's pro-Bitcoin decisions, including nominating Paul Atkins to lead the SEC.
This Week's Trump Trades
Trump’s appointment of Paul Atkins to lead the Securities and Exchange Commission and David Sacks as “White House AI & Crypto Czar” highlights his pro-business agenda for the presidency, supporting a positive medium-term market outlook despite markets hitting some resistance last week. In the short term, increased volatility is expected as potential profit-taking emerges ahead of the year’s end.
Tesla Inc. (TSLA)
Tesla surged past $360 last week, reaching its highest level since January 2022, as optimism about Trump and Musk's close relationship boosted confidence in Tesla's prospects. The next target for bulls is the 2021 high of $414.39. As long as the market holds above $360, maintaining a bullish stance appears to be the best strategy.
Tesla Daily Chart
Bitcoin
Another big week for Bitcoin as the market made headlines worldwide by surpassing $100,000, driven by the appointment of pro-digital asset advocate Paul Atkins to lead the SEC. Now that Bitcoin has reached this milestone, some sideways price action is likely in the short term. Considering the significant rally since Trump’s win, further rounds of profit-taking could limit large gains in the near term. However, medium-term prospects remain positive, supported by the addition of pro-Bitcoin members to Trump’s team.
Bitcoin Daily Chart
S&P 500
The S&P 500 outperformed the Dow last week, reaching new historical highs as the U.S. economy showed strength, highlighted by better-than-expected employment data. While some profit-taking could limit gains, the best strategy appears to be following the uptrend as long as the market stays above the 10-day moving average. Short-term traders should remain cautious, as a break below the 10-day moving average could trigger a quick sell-off, presenting a potential profitable trading opportunity.
S&P 500 Daily Chart
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