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In our view, Thanksgiving rally Intact

• NVDA-0.96%  earnings reported
• Whether market happy or sad
• It’s behind us
• Meaning it’s a "clearing event"

Please BUY THE DIP (if there is one) IWM-0.44%  QQQ-0.14%  SMLR-9.14%  MSTR-4.13%  KRE-0.03%

O ur playbook for Trump win consistently been:

• small caps IWM-0.44%
• financials and industrials KRE-0.03%  XLF0.31%  XLI0.39%
• bitcoin BTC SMLR-9.14%  MSTR-4.13%

Today’s open validates these views. Stick with them. Add if you have not added exposure.

IWM-0.44%  Russell 2000 ETF (IWM) has also likely begun a push back to new highs today, though requires a move back over 220.80 for a short-term breakout and this should carry IWM up to 224-224.50. Note that this triangle pattern is not dissimilar from many around the US stock market. SPX and DJIA have broken out of theirs, but many sectors like Regional banks KRE-0.03% , have not. Resolving this triangle by moving above 224 will help to drive outperformance and gains up to 244.

Fed cut of 50bp is good. Stocks have tailwinds for 1M and 3M forward. As we noted:

• 7 of 7 times when Fed cuts and no recession (like today)
• stocks higher 1M and 3M later

Stick with most sensitive to falling interest rates: IWM-0.44%  XLF0.31%  KRE-0.03%

Today's internals reveal a very different picture for US stocks than the Major averages might suggest. Despite a 2%+ decline in NASDAQ, five sectors are up 1% or greater: Energy, REITS, Utilities, Staples and Healthcare. NYSE breadth is just barely negative, and Volume is also nearly better in Advancing issues than declining. KRE-0.03%  continues to push higher, and Small-caps and Mid-caps are down much less than SPX and QQQ. Overall, today's pullback isn't too negative technically, and should prove very short-lived ahead of a push back to new highs. SPX has pulled back to initial Ichimoku support. Prices very well might hold between here and 5576 at last Thursday's lows, and as daily charts show, no trend damage has occurred on daily charts

NYCB is selling off today the bank announced a large increase in loan loss provisions. Surprising many as the bank only recently said asset quality was good

• bond markets slightly fearful of contagion (other banks)
• Odds of a March cut rose materially roughly 50% vs 25% a day ago
• Fed cuts fix many of regional bank problems

Thus, this is ironically a positive development especially for small caps and regional banks IWM-0.44% KRE-0.03%

The choppy equity performance of first two weeks Jan tells us we are in a “difficult” period and probably like this most of first half

• but as we noted in our latest note and video
• we see new highs in Jan because this is what happens when we get within 1% of all time highs
• but new highs doesn’t mean “easy sailing”

So be wary. For the full year, our top ideas:

• small capsIWM-0.44%
• financialsXLF0.31% KRE-0.03%
• industrialsXLI0.39%
• technologyXLK-0.28% QQQ-0.14% HACK0.11% PANW-0.66%
• even miners/bitcoinBITB-1.62% MARA-3.41% RIOT-2.74%

Dec CPI was actually better than we expected, but above the Street

• core at +0.3% MoM vs feared +0.5%
• Higher was car prices, car insurance, lodging
• Lodging caused shelter to surge. Pls ignore
• Auto insurance is an artifact of higher car prices past few year

Please buy any dip on this. We still see new highs in Jan consistent with Mark Newton view An INTRADAY ALERT is forthcoming IWM-0.44% KRE-0.03% SPY-0.93% RSP0.05% QQQ-0.14%

Regarding Dec employment report released Friday at 8:30am ET

• several of my economist clients expect a soft jobs
• consensus is +175k
• below drives lower rates = boost equities

Tactically, could support idea stocks rally Friday consistent with comments from Mark Newton, Head of Technical Strategy IWM-0.44% KRE-0.03% QQQ-0.14% SPY-0.93%

It’s a nail biter now

• first and second trading day of 2024 negative
• 12 instances since 1950
• only 3 managed to turn positive by day 5

So watch next few days. But this doesn’t mean the year is a write off. But we should have reduced expectations

• good news. 9 of 12 had positive full year
• 3 of 12 >25% 1980, 1985, 1991

Friday is employment report and this could trigger a big rally.IWM-0.44% KRE-0.03% SPY-0.93%