<p>Happy Sunday traders. I want to briefly start this article out by again sharing my vision for this substack: a place for me to share my thoughts & ideas on the markets. This weekend I have begun work on building my core thesis’s for 2025, and I have a general idea of how I will be sharing them. Since it will be entirely to long to share in a single post, I will share my 2025 Outlook over a series of three different articles over three days, most likely the last two days of December and January first, when the markets will be closed. Right now I have three big focal points for where I see the best opportunities, and I will be dedicating an entire article to each of them. </p><p>Starting this weekend and lasting into the first week of January, I’m opening a 2025 subscriber promotion, you can check it out below!</p><p class="button-wrapper"><a class="button primary" href="https://fathertimechronicles.substack.com/subscribe?coupon=e85c6344&utm_content=153142757"><span>Get 40% off forever</span></a></p><p> Last week equities finally succumbed to pressure from bears, and the selloff was fueled with weakness in growth and chips. The hot PPI print last week stalled the momentum for bulls, and growth was the big loser. So heading into FOMC week traders have a hot inflation print front and center in their minds. So what becomes the pain trade? That’s something I hope to discuss throughout this article.</p><p>Another area to watch in markets is the ten year treasury yield, TNX. As the 10yr approaches the key 4.5% inflection level, the pressure on equities will increase. Should TNX consistently trade above 4.5%, it’s going to be very hard for me to remain a bull on growth and tech. </p><p>One significant pain trade for many traders that’s going to start sooner than later is NVDA. This one is nearing the end of its distribution and its markdown phase is going to begin soon. Traders will rush to buy the dip, and they will get mercilessly stopped out over and over again.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca5835c2-4f2a-438b-9349-5fd11454fff1_3286x1860.png" target="_blank"><div class="image2-inset"><source type="image/webp" /><img alt="" class="sizing-normal" height="824" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca5835c2-4f2a-438b-9349-5fd11454fff1_3286x1860.png" width="1456" /><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg class="lucide lucide-refresh-cw" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg class="lucide lucide-maximize2" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p>Briefly looking ahead to FOMC this week, it’s a foregone conclusion the Fed is going to cut rates again by 25bps on Wednesday. The kicker is, what is their outlook? Does Powell & the Fed remain firm in their dovish outlook? If Powell & Fed co remain dovish in their outlook, we can see a “santa rally” into the end of the year, and growth likely leads the way. A dovish Fed this week should send the dollar + yields lower, acting as a supportive tailwind for equities. </p><p>If we see a hawkish Fed this week, we’re going to see a sharp decline in equities, similar to December 2018 after a hawkish outlook from Powell. In 2018 after December FOMC, the markets erased their gains from the entire year to end the year flat. Never rule out any scenario no matter how extreme it may be, anything is always possible.</p>
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