Ominous Patterns Emerging As Stocks Start Off New Year On Wrong Foot; Gold, Silver, Oil Gain

Bear market patterns have been emerging on the major indices over the past few weeks - specifically, stocks opening strong to the upside only to fall into negative territory later in the day - that indicate a bear market is developing.

That is exactly what occurred on the first day of trading in 2025. The Dow was up nearly 350 points in early trading Thursday, but closed down 151 points. The NASDAQ was up more than 200 points early on, but lost ground throughout the session, closing with a small (-30 points) loss.

The same was true for the S&P, which was up more than 50 points around 10:00 am ET, then fell 50 points into the red, finally rallying late in the day to register a smallish, 13-point loss.

After sprouting solid gains for the first 11 months of 2024, December was a decided departure from the norm, as the major indices were all down for the month, though the high-flying NASDAQ, dominated by the Magnificent 7, was down only marginally.

These patterns have been re-appearing on a regular basis and do not bode well for the "January Effect" which posits that "as goes January, so goes the rest of the year.

Analysts can pound the table as much as thye like about their year-end projections of stock gains, but the evidence thus far is lacking. Stocks remain wildly overvalued and incoming Trump policies and actions by his chief leiutenants will have profound effects on trading once implemented after January 20.

Expect similar results on a regular basis up until the inauguration. After that, stocks could spiral down without much support.

Gold, silver, and oil posted gains on January 2, but precious metals are under pressure leading to the opening bell. As usual, stocks are poised for a higher open by equity futures. Oil continues to push forward for no good reason, topping $73.50 in early trading, the highest since mid-October.

This being the first Friday of the month, normally non-farm payroll results (December) would be posted. Since the date is so close to the beginning of the month and the past two weeks were interrupted by holidays, the slavish BLS obviously needs more time to fudge the numbers.

Tread lightly, and carry a big stick, preferably made of gold or silver (quite heavy).

At the Close, Thursday, January 2, 2025:
Dow: 42,392.27, -151.95 (-0.36%)
NASDAQ: 19,280.79, -30.00 (-0.16%)
S&P 500: 5,868.55, -13.08 (-0.22%)
NYSE Composite: 19,095.42, -1.69 (-0.01%)

A New Year; But the Same Patterns; Stock Futures Indicate Gonzo Open; Gold, Silver, Oil Higher

2024 will be remembered as one of the best for Wall Street, as the major indices posted outstanding gains over the 12 months, though the last month was somewhat regrettable and forgettable, with all of the indices lower as participants took profits.

Unofficially (using Google Finance's clunky figures), the majors put in the following performances for the year:

Dow	42,544.22	+4,829.18	+12.80%
S&P 500	5,881.63	+1,138.80	+24.01%
NASDAQ	19,310.79	+4,544.85	+30.78%
NYSE Comp.	19,097.11	+2,255.49	+13.39%

While the averages were fairly robust, breadth left much to be desired. The NASDAQ and S&P were led by the "Magnificent 7" stocks, Apple, Amazon, Alphabet (Google), Meta Platforms (Facebook), Microsoft, Nvidia, and Tesla, the high-tech darlings that out-performed the rest of the market handily.

Nvidia was easily the best, returning profits of 243%, followed by META, with an annual gain of 69%. Microsoft (MSFT) was the real disappointment of the group, up only 13.65% on the year.

With 2024 in the books, investors may not be so eager to establish new positions prior to the inauguration of Donald J. Trump as America's 47th president. His policies have yet to be fully fleshed out, and the Donald has been known to surprise and amaze, so there could be some slight trepidation in early January, which usually sets the tone for the remainder of the calendar year.

With the opening bell for the first trading session of 2025 an hour away, it does appear that investors are eager to put their money to work. Dow futures are banging higher by 285, NASDAQ futures are +185 to the good, and S&P futures are showing a gain of 41 points. Moves in the futures markets were pumped by the first weekly unemployment figures which showed US unemployment claims falling to 211,000, the lowest level since March.

Gold is also bid, at $2,650, though that's $10 lower than it was just moments ago. Silver continues to struggle, but it is also up, hovering near $29.65 in early trading on the COMEX.

Players in the oil pits remain undeterred by the current supply glut and demand slack. WTI crude is pricing at $72.69, a 2 1/2-month high.

Crypto-crazies are bidding up bitcoin this morning, sending it above $96,000. It traded as low as $91,547 on December 30.

It appears that 2025 might just start off gang-busters despite warning signs. There's something for everybody.

At the Close, Tuesday, December 31, 2024:
Dow: 42,544.22, -29.51 (-0.07%)
NASDAQ: 19,310.79, -175.99 (-0.90%)
S&P 500: 5,881.63, -25.31 (-0.43%)
NYSE Composite: 19,097.11, +19.18 +(0.10%)

2024 Closes Out with Mixed Feelings, though Stocks Were Broadly Higher; Happy New Year

Quite a few Wall Street traders must have found their way onto Santa's naughty list, because stocks have been going in the wrong direction for the better part of December.

While the Dow peaked on the 4th, the S&P did the same on the sixth, and the NASDAQ topped out on the 16th, they've all been lower since making those all-time highs. Tech lovers in NASDAQ stocks probably aren't too concerned. Despite the loss of 687 points over the past nine sessions, the gains for the rest of the year prior to December were outstanding. The NASDAQ should finish with an overall gain of more than 30% for 2024, the S&P putting in profits of nearly 25% and the Dow lagging behind with a 12-14% rise, which, given market conditions, isn't all that bad.

The situation on the Dow may be a bit more concerning. The 30 industrials are down 2,209 points, and are headed toward the December 18 lows, as are both the S&P and NASDAQ. The selling is probably little more than profit-taking, though the pattern suggests January may not be a period in which investors stake out new positions earnestly. With geo-politics in a state of uproar and the Biden-to-Trump transition certain to offer some surprises, a wait-and-see approach could be the operative position, at least until the 20th.

As marketeers bid a fond farewell to 2024, the final day of trading finds all equity futures higher, getting a sizable boost at the European open, seeking to put a positive spin on the year's end.

The price of crude oil, as measured by WTI, will close out the year roughly where it began, right around $70 a barrel, which appears to be the happy place for producers and a reasonable level for consumers.

Precious metals have been whacked hard the last two months, silver especially, having lost nearly half its gains year-to-date since the end of October, though still up 22% on the year. Gold, which hit $2,800 on October 31, has shrunk by nearly $200 since then, currently holding around $2,625, with a year-to-date gain above 26%.

Given the late season take-down in PMs, they look like solid investments moving into 2025. Both should regain their prior highs and then some in the coming year.

The NYSE and NASDAQ will both close at the regular 4:00 pm ET today. Bond markets close early, at 2:00 pm ET.

Money Daily will have a recap of today's trading and full-year final figures on Thursday, January 2nd.

Happy New Year!

At the Close, Monday, December 30, 2024:
Dow: 42,573.73, -418.48 (-0.97%)
NASDAQ: 19,486.79, -235.25 (-1.19%)
S&P 500: 5,906.94, -63.90 (-1.07%)
NYSE Composite: 19,077.93, -160.55 (-0.83%)