Nick Goold
Latest Political News
It has been a quieter week in U.S. politics following the recent flurry of announcements from President-elect Donald Trump as he continues to shape his incoming administration. GOP senators are increasingly shifting their stance on Trump’s cabinet nominees after mounting pressure from MAGA supporters, signaling potential smooth confirmations ahead. Meanwhile, outgoing President Joe Biden issued pardons for 39 individuals convicted of non-violent crimes and commuted the sentences of nearly 1,500 people on home confinement, a move praised by criminal justice reform advocates but seen by some as a final legacy act for his administration.
Volatility Index
VIX Last Week
Open: 13.94 High: 14.54 Low: 13.89 Close: 14.25
Summary
The VIX posted its first weekly rise since late October, reflecting a challenging week for U.S. equities. With equity markets underperforming, concerns are growing that volatility could increase in the coming weeks.
VIX Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
Continued weakness in U.S. equities bodes well for the VIX, presenting a potential opportunity for medium-term traders. With volatility likely to rise when Trump becomes president in January, buying the VIX ahead of this change could offer a high-reward, low-risk trading opportunity.
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: 44,635 High: 44,758 Low: 43,777 Close: 43,809
Nikkei 225 Last Week
Open 39,320 High 40,154 Low 38,970 Close 39,543
Summary
The Dow Jones Index recorded another week of losses, marking its longest losing streak since 2020 with seven consecutive daily declines. Profit-taking selling continues to harm U.S. equities following the Trump rally. U.S. CPI came in as expected, increasing the likelihood of a rate hike this week to 99%. Higher-than-expected PPI data further reduced the chances of a January rate cut, dampening market sentiment. Meanwhile, the Nikkei 225 posted another positive week, bolstered by China's announcement of economic stimulus measures and a strong USD/JPY.
Dow Weekly Chart
Nikkei 225 Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
The Dow has reached its downside target of $44,000, and sideways movement is likely ahead of this week’s FOMC decision. While the Dow appears slightly oversold in the short term, the risk of further losses persists, making selling opportunities the preferred strategy for traders this week. Meanwhile, the Nikkei remains range-bound after hitting resistance at 40,000 Yen, with range-trading strategies continuing to be the most effective ahead of the Bank of Japan meeting. Volatility could rise significantly following the monetary policy decision, potentially presenting numerous short-term trading opportunities.
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: 67.22 High: 71.42 Low: 67.11 Close: 71.07
Summary
WTI rose last week, driven by heightened geopolitical tensions in Russia and Iran. Adding to the bullish sentiment, Trump’s pick for national security adviser vowed a return to “maximum pressure” on Iran, while the U.S. and Europe are considering sanctions on Russia’s oil trade, potentially reducing WTI supply. Speculators were further encouraged by moves in China to support its economy in 2025, boosting buying interest in WTI.
Oil (WTI) Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
While it is positive that WTI held support at $67 last week, selling remains the best strategy as long as the market stays below the $71.70 resistance level. However, if WTI breaks above $72, it could quickly rally toward $75.
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: 99,926 High: 102,602 Low: 93,430 Close: 101,008
Summary
Bitcoin faced continued profit-taking after reaching the $100,000 milestone, leading to a week of sideways trading action. Despite this, sentiment around President-elect Trump’s favorable stance on Bitcoin helped the market end the week back above $100,000. Social media commentators added to the optimism, with some predicting much higher levels, such as $250,000, in the near future.
Bitcoin Weekly Chart
Market Analysis (Technical, Sentiment, and Fundamental Analysis)
After last week's period of consolidation, Bitcoin is poised to continue testing higher levels in the week ahead. The 10-day moving average remains bullish, and as profit-taking subsides, the potential for higher prices strengthens.
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 most important events this week are the central bank meetings in the U.S. and Japan. In the U.S., a 0.25% interest rate cut is widely expected, with market focus turning to the comments following the rate announcement for clues about future policy. The Bank of Japan's monetary policy decision remains uncertain, with analysts predicting a delay in any interest rate hikes. Regardless of the outcome, significant moves in the Nikkei 225 and the Yen are expected. Additionally, key U.S. economic data releases will draw attention, including Tuesday's Retail Sales, Thursday's GDP, and Friday's Core PCE Price Index. Continued developments in the Middle East could also negatively impact market sentiment.
Potential Market Impact
Continued weakness in U.S. equities has created favorable conditions for the VIX, offering medium-term traders a potential high-reward, low-risk opportunity. With volatility expected to rise as Trump assumes the presidency in January, buying the VIX ahead of this change could be profitable. Meanwhile, the Dow has reached its downside target of $44,000, and sideways trading is anticipated ahead of this week’s FOMC decision. Although the index appears slightly oversold in the short term, the risk of further losses remains, making selling strategies favorable for short-term traders. The Nikkei, on the other hand, remains range-bound after touching resistance at 40,000 Yen. With the Bank of Japan meeting this week, range-trading strategies continue to be the most effective, as volatility could spike following the monetary policy decision, presenting multiple short-term trading opportunities.
In commodities, WTI managed to hold support at $67 last week, but as long as the market stays below the $71.70 resistance, selling remains the preferred approach. However, a break above $72 could trigger a rapid rally toward $75. Bitcoin, after a period of consolidation, appears ready to test higher levels in the week ahead. With the 10-day moving average maintaining a bullish stance and profit-taking subsiding, the potential for further gains continues to strengthen.
This Week's Trump Trades
Profit-taking in equities has halted the upward momentum of the S&P 500, as concerns grow over the potential for Trump to impose tariffs on global trade. However, the positive impact of Trump’s election remains strong for Bitcoin and Tesla. With many major announcements following Trump’s victory now public, the market is shifting its focus to the countdown toward his January inauguration and whether his presidency can drive the market to new highs.
Tesla Inc. (TSLA)
Tesla reached an all-time high last week, fueled by optimism over Musk's close relationship with Trump and reports that the incoming administration may drop a car-crash reporting requirement for automated vehicles, a move seen as favorable for Tesla. Positive sales figures from China further supported sentiment, driving the stock 73% higher since Trump’s election win. After another strong rally last week, waiting for a pullback may be a better strategy than buying at current elevated levels.
Tesla Daily Chart
Bitcoin
After a week of consolidation around $100,000, bullish sentiment for Bitcoin remains strong, with speculators now forecasting new targets above $200,000 and beyond. Both short- and medium-term traders are encouraged to maintain a bullish outlook, looking to buy on dips or if prices break above $105,000.
Bitcoin Daily Chart
S&P 500
The S&P 500 is showing signs of weakness, with last week's higher-than-expected U.S. PPI inflation data reducing the likelihood of a U.S. interest rate cut in January. However, December is traditionally a strong month for equities, which could limit significant declines. As a result, range trading appears to be the best strategy for trading the S&P 500 this week.
S&P 500 Daily Chart
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