Week of January 20

The shorts got squeezed now what. Buy the rip? Or wait.

Recap of last week

2025 has been very rough to start after a weak December as well. A phenomenon I have seen time and time again is the market makes the weak hands all capitulate and sell everything before staging a breath taking rally. Thats exactly what it did last week.

In times of extreme fear, and volatility I hope I am able to help people see clearly. On Monday I urged everyone to remain steadfast in buying the dip and that a bottom will be imminent between Mon thru Wednesday. That was irrespective of CPI, no bullish above XX, bearish below YY nonsense.

While most people were capitulating on their longs last week for tremendous losses, we stayed the course and bought OTM calls just before CPI. After a shaky start in January, these SPX longs, plus our bond longs, and resurging XLF longs put us firmly into the black on a YTD basis. We are riding our winners and am looking to increase long exposure selectively in the coming days/weeks.

Next move for markets