Caution!

On Friday, the S&P 500 index fell by 1.71%, reaching its 50-day moving average support level on above-average trading volume, indicating potential distribution. The NASDAQ index experienced a 2.2% decline and failed to secure institutional support, dipping below its critical 50-day moving average. The Russell 2000 index, representing small-cap stocks, is trading beneath its 200-day moving average, while mid-cap stocks barely hold above this level. Factors contributing to this downturn may include options expiration, weak consumer demand forecasts from Walmart, and Microsoft’s cancellation of AI contracts, which included penalties. Many leading growth stocks suffered significant losses, resulting in numerous damaged charts requiring time to recover. A rebound is anticipated on Monday; however, further selling could push the S&P 500 down an additional 3.5% before it finds its next support level. High-volume declines are warning signs that often precede bear markets. Should the indexes consistently trade below their 50-day moving averages, I will explore short-selling opportunities.

Since January 10th, 10-year Treasury yields have declined, approaching the 4% support level, signaling economic weakness. The dollar began to weaken following the Federal Reserve’s decision to pause rate cuts on December 18th. Crude oil prices have dropped to around $65 due to increased supply, potentially coupled with weak demand. Consumer discretionary stocks (XLY) have fallen below their 50-day moving averages on significant volume, while consumer staples (XLP) have rallied, reflecting a shift in sentiment and a slowing economy. Homebuilders (XHB), often viewed as an economic indicator, peaked weeks ago. Although gold has remained stable near all-time highs, gold stocks faced substantial losses on Friday. Regional banks (KRE) have also fallen below their 50-day moving averages on high volume, indicating weak consumer loan demand under financial strain. While China appears stable, trust in a communist government is questionable. Reduced government spending constitutes one-third of GDP and could hinder economic growth. The favorable economic conditions are diminishing; prices remain high, inflation persists, and signs of economic slowdown may lead us toward stagflation, which is concerning.

Wednesday is judgment day for NVDA as it releases earnings for its Blackwell chip demand after the Deep Seek China news of a more efficient AI program. The indexes have been in a trading range since December 18^th, so NVDA’s earnings and guidance could be a game changer for AI and economic growth. I am short-term bearish but remain open-minded, seeking to make money and avoid life-changing losses. May God’s Grace & Peace Bless You!

Blessed is the one who perseveres under trial because, having stood the test, that person will receive the crown of life that the Lord has promised to those who love him. James 1:12

If you know anyone who would like to receive these Updates or invest in my Fund, please Email or call me.

Dexter Lyons, Portfolio Manager
337-983-0676  Dexter@ChristianMoneyBlog.net
Active Risk Management, CANSLIM Investing
ChristianMoneyBlog.net

The S&P 500 and NASDAQ are approaching historical peaks, and I anticipate they will break out and resume their uptrends after basing (going sideways) since December. The market has absorbed the negative news regarding interest rates, inflation, tariffs, and geopolitical conflicts, which now appears poised for further gains; thus, we are positioned to participate in the next phase of this bull market. Our portfolio comprises a well-diversified selection of approximately 27 stocks, with significant allocations in the gold, software, and medical sectors. I have been strategically limiting losses to around 5% of our cost basis while taking profits near 10%, yielding favorable outcomes. Artificial intelligence remains the prevailing theme, and numerous stocks are adjusting to the transformative efficiency results from Deep Seek, indicating that it may take some time for the market to realign with the new leaders. I plan to follow the big money by looking for stocks advancing on above-average volume.

Gold is currently experiencing institutional accumulation as it approaches $3,900 per ounce, supported by above-average trading volume. Recently, Trump issued an Executive Order (EO) instructing the Treasury to devise a plan within 90 days for establishing a sovereign wealth fund (SWF). This EO can potentially prompt the United States to reassess its reported gold reserves from $45 to $3,900, shoring up its balance sheet. It is possible that some of this gold has been loaned out (hypothecated) to other countries, and the creation of a SWF could necessitate the re-hypothecation of gold back to Fort Knox. This repatriation of gold to its rightful owner (the US) may account for some of the recent surge in gold prices to record levels.

The Chinese government now permits insurance companies and citizens to purchase gold for their accounts. Traditionally, gold has served as a reliable store of value and a safeguard against inflation. Gold and the stock market are likely headed higher! May God’s Grace & Peace Bless You!

Grace was given to each of us according to the measure of Christ’s gift. Ephesians 4:7

If you know anyone who would like to receive these Updates or invest in my Fund, please Email or call me.

Dexter Lyons, Portfolio Manager
337-983-0676  Dexter@ChristianMoneyBlog.net
Active Risk Management, CANSLIM Investing
ChristianMoneyBlog.net

Watch My Latest Interview, Dexter Lyons Investing with Integrity on YouTube

Digestion/Distribution in a Bull Market!

The current phase of digestion and distribution in a bull market is noteworthy. Growth stocks exhibiting accelerating earnings and sales are experiencing institutional accumulation; however, the overall market weight impedes their progress. Despite this, we remain in a bull market, with leading growth stocks poised to elevate the indexes in the upcoming week. The indexes have been consolidating recent gains, moving sideways (above the 50-day moving average) within a trading range close to all-time highs. The market is recovering from the shock of the Federal Reserve’s unexpected pause in rate cuts on December 18, during which we observed approximately six distribution days (defined as a price decline exceeding 1% on increased volume) on the NASDAQ and three on the S&P 500. The market experienced a sell-off on Friday due to potential tariff news anticipated over the weekend; however, futures show positive movement on Sunday night, suggesting a potentially favorable week ahead.

In December, consumer credit surged to over $40 billion, marking the largest increase on record, indicating that consumers continue to spend despite rising prices. The anticipated consumer debt was around $16 billion, which was a surprise, particularly given that individuals face interest rates of approximately 23% on their credit card debt. The Federal Reserve has contributed to inflation by increasing the money supply and extending credit. If the Fed were genuinely combating inflation, we would expect a contraction in credit; however, this is not the case. The Fed’s policies remain overly accommodative, raising concerns about the potential for stagflation, characterized by a slowing economy coupled with rising inflation. The absence of a contingency plan from the Fed to address stagflation could lead to a significant downturn in the stock market, raising serious concerns for the future.

Gold is a safeguard against inflation and is trading close to its historical peak of around $2,873 per ounce. Central banks are adding to their gold reserves in response to the decline in purchasing power of fiat currencies, which are issued without tangible backing. Notably, one ounce of gold still has the purchasing power to buy the same amount of bread as 2,000 years ago when Jesus walked the earth. Gold is acknowledged as a reliable store of value and may function as a medium of exchange in critical situations. Gold is experiencing a bull market and represents my largest investment allocation.

Japanese 10-year treasury yields are experiencing an upward trend, currently yielding 1.3%, which marks a 15-year peak. Concurrently, inflation in Japan is approximately 3.6%, and the debt-to-GDP ratio hovers around 250%. The increase in yields is attributed to rising inflation expectations in Japan, mirroring trends observed in the United States. This situation may compel Japan to liquidate US Treasuries to stabilize the yen. Hedge funds, utilizing significant leverage (up to 100:1), have borrowed yen at rates near 25 basis points, invested in higher-yielding Treasuries through the yen carry trade, and have benefited from substantial spreads for many years. However, should Japanese yields escalate too quickly, the yen carry trade could unwind abruptly. Such a rapid unwinding could disrupt global stock markets if there is a significant sell-off of US Treasuries. Trump is aware of the developments in Japan and is likely to take measures to avert a potential crash in the stock and bond markets during his administration.

Bottom line: We remain in a bull market, with the indexes likely to break free from this period of sideways trading and reach new all-time highs. This week, Powell will testify before Congress, and we will also receive the monthly Consumer Price Index (CPI) and Producer Price Index (PPI) data. A recent report indicates that DeepSeek has invested over $1 billion in its computer cluster. The frequently cited figure of $6 million is quite misleading, as it does not account for capital expenditures (CAPEX) and research and development (R&D), and it primarily reflects the cost of the final training run. Trump is currently “studying” the potential for a strategic Bitcoin reserve, which can be interpreted as an indication that it is unlikely to materialize. Disciplined risk management and appropriate position sizing are crucial for achieving long-term success. Grace & Peace!

The grace of God has appeared, bringing salvation to all people. Titus 2:11

If you know anyone who would like to receive these Updates or invest in my Fund, please Email or call me.

Dexter Lyons, Portfolio Manager
337-983-0676  Dexter@ChristianMoneyBlog.net
Active Risk Management, CANSLIM Investing
ChristianMoneyBlog.net

Watch My Latest Interview, Dexter Lyons Investing with Integrity on YouTube

Deep Seek & Tariffs!

Last Monday, the NASDAQ 100 (NAZ) and S&P 500 (SPX) indexes dropped below their 50-day moving averages on above-average volume following the Deep Seek news. Deep Seek, a Chinese startup, introduced a new AI model that uses cheaper chips and less data, resulting in lower heat production and increased efficiency compared to current models. If their claims hold up, it could disrupt many AI companies. Despite the sharp drop, many of the stocks that were hit hardest on Monday have since rebounded, which is encouraging. Some of my sell-stops were triggered, so I repositioned into medical and software stocks, breaking out of solid bases. There are still a lot of stocks under institutional accumulation, which leads me to believe the bull market may not be over just yet. However, I’m cautious due to about seven distribution days (a 1% decline on above-average volume), which is a concern.

On Friday afternoon, Trump announced tariffs on Canada, Mexico, and China, causing the market to reverse course and close lower on significant volume. As I write this on Sunday night, futures indicate a rough opening on Monday.

The Fed hinted that it was nearing the end of its rate-cutting cycle on December 18. The indexes slipped below their 50-day moving averages shortly after, marking the first of seven distribution days. Since then, the NAZ has struggled but found support at its July 11 peak. I expect the NAZ to hold above its 50-day moving average, but further correction could be in the cards if it fails. The market seemed stable after the Fed held rates steady on Wednesday, but the Trump tariff news shifted the momentum.

I believe Trump is an effective negotiator working in America’s best interest, and ultimately, his policies will benefit the country. I don’t argue with the market—the price is always right. My health and peace of mind are far more important than any stock. If a stock doesn’t perform as expected, I’ll stick to my loss-cutting rules and live to trade another day. In the long run, we win!

Bottom Line: The bulls are still in control, but that could change. I’ll continue following the trends created by big money while sticking to my rules to ensure I can keep investing. Risk management and position sizing are key to long-term success. Grace & Peace!

May the God of hope fill you with all joy and peace in believing, so that by the power of the Holy Spirit you may abound in hope. Romans 15:13

If you know anyone who would like to receive these Updates or invest in my Fund, please Email or call me.

Dexter Lyons, Portfolio Manager
337-983-0676  Dexter@ChristianMoneyBlog.net
Active Risk Management, CANSLIM Investing
ChristianMoneyBlog.net

Watch My Latest Interview, Dexter Lyons Investing with Integrity on YouTube

Digesting Gains? The S&P 500 and NASDAQ 100 indexes have rallied about 5% in just 7 days and are approaching all-time highs. A short digestion period (~3%) of these recent over-bought gains is needed before the uptrend resumes. The market is optimistic about Trump’s policies—lower taxes, less regulation, and smaller government—which bode well for growth. When a company shows strong earnings and sales growth, I look for a pivot point to buy the stock, typically when it breaks out of a base on above-average volume. These base breakouts have been working in this bull market, and I expect them to continue. Historically, growth stocks have outpaced both inflation and taxes.

Treasury Bonds and the Dollar The 20-year Treasury Bonds appear to have hit a short-term bottom, rallying more than 2% since 1/14/25, causing yields to drop. Rising rates have been a headwind for the market. Meanwhile, the U.S. dollar is weakening, breaking its uptrend. A declining dollar should benefit international stocks as they convert overseas profits into dollars. A weaker dollar is also favorable for gold, trading near all-time highs and showing a low-volatility uptrend. Silver, in contrast, is not being heavily accumulated by central banks, so I focus more on gold. Gold stocks are not yet at all-time highs, and they have plenty of room to catch up, so gold remains the better choice. Oil prices are declining as the “drill, baby, drill” agenda takes effect. I expect oil to drop from $75 to around $65 and consolidate for a while. Consumer staple stocks are in a downtrend, which reduces the likelihood of an imminent recession.

Fed Meeting and Market Outlook The Fed’s meeting on Wednesday could significantly impact the market. The last time the Fed met on 12/18/25, the market dropped about 3% on high volume, as the Fed mentioned they may be nearing the end of the rate reduction cycle. Markets typically react positively to rate cuts and negatively to rate hikes. We could hear dovish comments about rate cuts if the Fed views recent cooling inflation (PPI and CPI) as a positive sign. However, if they adopt a hawkish stance and raise rates, we could see a 10% correction. Chairman Jay Powell will likely avoid taking actions that harm Trump’s agenda.

Global Economic Factors Japan raised rates last week to combat inflation, which could hurt our Treasury Bonds since Japan is our second-largest creditor after the Fed. If higher rates in Japan slow down their economy too quickly, it could force Japan to sell U.S. bonds, driving yields higher and potentially harming our stock market and economy. However, I trust Trump will prioritize America’s interests and negotiate a favorable deal with Japan.

Bottom Line: The bull market is alive and well, with AI leading the charge and Trump focusing on putting America first. I am bullish but with a slight hedge (ETF shorting NASDAQ 100). Earnings are exceeding expectations, which is lifting many sectors. If I’m wrong, I will quickly adjust my positions to minimize risk, as risk management and position sizing are crucial for long-term success.

“It is by Grace you have been saved, through faith, and this is not from yourselves; it is the gift of God, not by works, so that no one can boast.” Ephesians 2:8-9  

If you know anyone who would like to receive these Updates or invest in my Fund, please Email or call me.

Dexter Lyons, Portfolio Manager
337-983-0676  Dexter@ChristianMoneyBlog.net
Active Risk Management, CANSLIM Investing
www.ChristianMoneyBlog.net