SUMMARY
1. We remain bullish on the S&P 500 index and continue to believe that the 4/7/25 lows were the lows for 2025. My X post on 4/11/25 here.
2. Techology is our top ranked sector, and we upgraded semiconductors, banks and industrials on Monday morning, 5/12/25, after the U.S./China tariff pause news.
3. We rescinded overweights on gold and defensive sectors as well on 5/12/25.
4. We remain bullish on Bitcoin and continue to forecast new highs in 2025.
5. Our recession odds for 2025 have been reduced to 15-20%, after the 5/12/25 tariff pause news.
6. CPI inflation has come in below forecast for the past 3 months, which is a major positive development.
BIGGEST RISKS TO OUR VIEWS
1. Any major setback in the U.S./China tariff narrative.
2. Any major slowdown in the U.S> economy and/or labor markets.
- We remain bullish on the S&P 500 (SPX), following our 4/11/25 bottom call, when SPX had a major capitulation selling flush and reversal on the highest weekly volume in 14 years. This is something that I discussed with Maria in my 4/18/25 segment.
- Since then, we have had two major positive developments in the tariff news cycle. On 4/22/25, President Trump walked back the 145% max tariff level on China, which indicated that the White House had some flexibility in this process.
- This past Sunday, 5/12/25, we received major news of a 90-day tariff pause between the U.S and China. This is a significant development. Since Sunday’s development, SPX is +4.0% this week, in two days and the Nasdaq 100 index (NDX) is +5.66%. This data is as of Tuesday’s close.
- Both indices reclaimed their respective 200-day moving averages on Monday, which is a significant trend buy signal. The 200-day moving average (200-DMA) is one of the most important and widely followed technical indicators in the stock market. It is widely regarded as the most important moving average that institutions use. The 200-DMA reclaim further solidified our views that the 2025 market lows are in.
- In our view, there are numerous trend buy signals on the SPX chart over the past 5 weeks. In order of importance:
- 4/9/25: +9.5% day, the third best day on record going back to the index’s inception in 1957
- 4/11/25: extreme volume upside reversal week.
- 5/12/25: reclaim of the 200-day MA.
- 5/12/25: breakouts over 5700 and 5800 – both were technical resistance levels.
- Multiple bullish MA crosses (10/20, 10/50 and pending 20/50).
- Bullish volume characteristics – higher volume UP days vs lower volume DOWN days.
HIGH PRIORITY SECTORS
- With Sunday’s tariff pause headlines, we upgraded semiconductors, the industrial sector, and major banks and brokers on Monday morning, 5/12/25.
- We upgraded the technology sector four weeks ago, 4/13/25 and that remains a priority sector here.
- Technical best ideas are Palantir Technologies, Tesla, GE Vernova, JP Morgan Chase.
- The semiconductor Big 3, Nvidia, Taiwan Semiconductor and Broadcom, have all given trend buy signals over the past two weeks.
Palantir Technologies (PLTR) has been our #1 ranked technology sector stock in 2025.
- PLTR is a leader in Artificial Intelligence, and they dominate their market – with many high value U.S. Government contracts.
- This was my top tech idea with Maria on 4/18/25, at $93.78.
- This remains our top ranked tech sector idea, breaking out to new record highs.
Tesla Inc. (TSLA) is our top ranked “Magnificent 7” stock.
- TSLA is a major AI player, and also has a fast-growing energy storage business. It also has ventures in robotics and autonomous driving.
- A recent major technical breakout over the 200-day MA and a key $300 price level.
- Bullish 20/50-day MA cross and the 50-day MA is turning up.
GE Vernova, Inc. (GEV)
- GEV is an industrial sector leader in the electric power industry. Its products and services generate, transfer, orchestrate, convert, and store electricity. The firm operates through the following segments: Power, Wind and Electrification.
- GEV is pending a breakout to new all-time highs, in a very high growth sector.
- Recent bullish 20/50-day MA cross and rising 50-day MA.
JP Morgan Chase & Co. (JPM)
- JPM is the dominant market leader in the major banks and brokers group.
- This sector is heavily tied to the U.S. economy, which was dealt a major positive event with the China tariff pause news.
- Recent bullish 20/50-day MA cross and just below new record highs.
Nvidia Corp. (NVDA)
- NVDA gave a technical buy signal on 5/13/25 with the 200-day MA reclaim.
- Earnings are due on 5/28/25, which could lead to wider trading ranges, but the trend has turned up.
- Broadcom (AVGO) is our top ranked semiconductor stock, and the sector is turning up. Taiwan Semi (TSM) gave a trend buy signal on 5/12/25 as well. We are bullish on all 3 names.
DISCLOURES:
We have long positions in S&P 500 ETF (SPY), PLTR, TSLA, GEV, TSM
