🩻 Week 51, 2024: What the Hell Happened to the Stock Market This Week?
Introducing The Prophet Indicator
To Smart Investors,
We’re back with fresh, unbiased data for this week's US stock market.
Super Important Stuff!
Last week, I started writing The Guide. Over the next month, I will incorporate all of my knowledge and explanations of The Indicator and how I trade into these lessons.
Because we experienced some delays due to real-life problems, including my developer's illness, I am extending the money-back guarantee on all subscriptions to 90 days in the spirit of Christmas. I don’t want any unhappy customers here.
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Introducing The Prophet Indicator in the SPY analysis below that will be included in the True Price Indicator and the new SaaS. It’s a work in progress, so please don’t ask for access. But I will be reporting its sentiment on the Telegram channel daily.
Lesson 2 of The Guide hopefully coming tomorrow 🙏
The free weekly Podcast is here:
Stuff I Published Last Week:
As Always In The Sunday Report:
I have written a detailed recap of last week’s market, my predictions for next week, and an ELI5 (Explain Me Like I’m 5).
You can also find my typical quant data and the stock insiders’ significant buys/sells with my interpretation.
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S&P500 Heatmap over the last week
This graph was generated by our friends at TradingView. Did you know you can get 60% off the Premium plan forever, even though it's not Black Friday?
Excel data:
This graph was generated by our friends at TradingView. Did you know you can get 60% off the Premium plan forever, even though it's not Black Friday?
*Also, by the way, the chart above shows precisely why you need the Premium TradingView plan in your life. Look into this:
📊 SPY: Last Month Recap + The Prophet Indicator in Focus
TL;DR: We will see a few days of chop and likely a bullish rally for a week or two.
Uptrend Breach: Throughout early December, SPY maintained an impressive climb (green trend line). This broke sharply mid-month, triggering a swift decline from the 600-area to the mid-580s.
Volatile Flush: Multiple large red candles emphasized the speed of the selloff. The move below 590 acted as a temporary capitulation point, flushing out weak hands and setting the stage for a rebound.
Spotlight on The Prophet Indicator
The Prophet Indicator is a custom, week-leading tool (roughly 7–10 days forward-looking) that has flashed a strong bullish setup. This data will be included in the next version of True Price Indicator and the upcoming SaaS.
Green Line (Bullish Leg)
Currently spiking near the mid-80s, signaling robust upside momentum in the pipeline.
When this green line sharply diverges upward, the market often rallies shortly thereafter.
Red Line (Receding Selling Pressure)
Dropping into the mid-teens, pointing to decreasing bearish momentum.
This downtrend in the red line suggests limited near-term selling intensity.
You can see how the indicator predicted the huge drop before it happened (red line crossing above green line days before it happened).
Why It Matters
When the green line crosses well above the red line in The Prophet Indicator, it often precedes a swift upswing—especially if price action confirms with higher lows and strong closes.
Projection for the Next 1–3 Weeks
Short-Term Bullish Bias
The Prophet Indicator’s bullish divergence and the post-capitulation bounce both imply SPY may regain ground toward the 595–600 zone.
Any solid break above 600 could spark a revisit of prior swing highs.
Key Levels
Support: 582–588. A retest that aligns with a stable green line on The Prophet Indicator would reinforce the bullish scenario.
Resistance: 595–600. Expect potential seller interest here; a decisive close above 600 would validate the Indicator’s uptrend call.
Bottom Line: The Prophet Indicator is painting a clearly bullish 1.5–3 week outlook. As long as SPY holds above the mid-580s and volume picks up on any push through 600, odds favor an advance into early 2025.
Please send feedback and ideas using comments, PMs, or email. I answer all emails and PMs personally. There is no personal assistant BS here.
And, as always — stay informed — and do your own due diligence,
Jack the Signals Doctor, MIT PhD
Weekly Market Summary: December 16– December 20, 2024
Executive Summary
U.S. equities struggled this week after the Federal Reserve cut its policy rate by 25 basis points—its fourth cut this year—while signaling fewer rate reductions than previously projected for 2025. Although the cut itself was widely expected, markets took a cautious tone once the Fed forecasted a slightly higher path for inflation and fewer policy-rate cuts on the horizon. This more “hawkish” slant triggered heavy selling midweek, culminating in one of the worst daily drops of the year on Wednesday.
Political uncertainty compounded market pressures, as Congress failed several times to pass legislation that would avert a possible government shutdown. The looming shutdown overshadowed some positive economic data, including better-than-expected U.S. retail sales, a revised higher Q3 GDP, and a relatively soft November core PCE inflation reading—which still inched up on a month-over-month basis but held steady at 2.8% year-over-year. Despite a welcome bounce on Friday, the market ended notably lower for the week.
Internationally, Europe saw its major indexes fall sharply, hampered by rate and trade policy concerns, while Japan and China each posted losses on subdued economic data and currency pressures. Several central banks—including the Bank of England and Bank of Japan—stood pat on rates, citing ongoing inflation risks but projecting only cautious easing paths in 2025. Meanwhile, commodity markets weakened, with oil and gold sliding under the weight of a stronger U.S. dollar and higher bond yields.
Looking ahead, thin holiday trading volumes and persistent macro risks—ranging from higher-for-longer interest rates to potential fiscal deadlock—may keep volatility elevated. While a late “Santa Claus rally” can’t be ruled out, investors remain focused on inflation trends, labor-market indicators, and any political resolution that could remove the threat of a prolonged government shutdown.
Detailed Analysis
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