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The Macro Situation

Black Friday (noun):

• the start of the non-holiday season for retail workers;
• the globalization of cheery consumerism;
• a dark cloud often inducing investors to dawn a bullish yuletide mask despite contrarian economic factors.

― New Entry in the Updated Devil’s Dictionary

Historically, the beginning of the December holiday season has been bullish even if economic conditions are bad. The 2008 recession saw the S&P 500 gain 12% on Thanksgiving weekend.

Sentiment has begun on a bullish note this season, with the S&P 500, Nasdaq, and Dow Jones up for the fourth week in a row. The National Retail Federation estimates a 3%-4% growth over last year’s holiday sales.

This is occurring amidst a persistently strong job market. Only 209,000 jobless claims (a five-week low) were filed last week compared to the previous week’s 233,000. Minutes from the Fed meeting on Tuesday revealed plans to raise interest rates only if progress towards the 2% target was “insufficient”.

Optimists are seeing this as a further sign of a soft landing—i.e., steadily lowering interest rates with a strong labor market. In Europe, however, there is worry about Germany’s ability to recover from the constraints on energy consumption due to the Ukrainian war.

Gold broke the $2000 ceiling several times due to a steadily weakening dollar and what appears to be China’s drive to increase its gold reserves. Meanwhile, the 10-year US Treasury yield (4.472%) remains in the moderate zone.

Crude Oil ($75.54) continues to struggle, this time dropping due to a postponed meeting of OPEC+. The reason? There were reports that Saudi Arabia and Russia were considering more supply cuts. In addition, the US continues to build its inventory, with over 9 million barrels recorded last week.

- Todd Mei, PhD and Sebastian Purcell, PhD

AI Sentiment Report

The following sentiment scores use ChatGPT as part of the AI tech stack to track sectors as leading indicators. (Lesson 4 of The Art of The Bubble covers the selection of lead indicators for bubble trades). The scores are most indicative for the next day of trading (a Monday), but they appear to set the general tone for the next week.

The methodology employed is based on this peer reviewed academic article, which produced 550%+ results in back tests over a 2 year time frame. We consider 4 and 5 scores to be positive, but please bear in mind that the AI model is still in its validation phase.

-The Research Team:

Dom Viera, Samantha Russell, Nicole Zinuhova, Aiza Malik

Free Crypto Reminder

When you join our Discord Server, verify as a member, and comment you get points.

Those points turn into cryptos that are distributed to all members who reach at least a level 5 by the end of the season (January 1). After that, there will be another season.

We have a community pool of funds for this distribution -- which uses half for the Crypto Maxi strategy and half in moonshot suggested by the community.

Happy Trading!!

Outperformance with Data

Below are two of our data service offerings for stocks. The Bubble Portfolio has never had a down year. The Leveraged Portfolio should be 3x the QQQ (so negative). Both are outperforming.

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