Reflections: Why the Market Pullback Wasn’t the Start of a Crash
It’s an opportunity
Have you been paying attention to big bank earnings lately? Here’s the scoop:
Goldman Sachs ($GS): Q4 profit surged to $4.11 billion, more than doubling last year’s results.
Citigroup ($C): Posted a $2.9 billion Q4 profit, reversing a $1.8 billion loss in 2023. Shares jumped 6.49%.
Wells Fargo ($WFC): Q4 profit soared to $5.1 billion from $3.4 billion last year, with shares up 6.69%.
BlackRock ($BLK): Record-breaking $11.55 trillion in assets under management. Q4 profit up 21% to $1.67 billion. Shares climbed 5.19%.
Morgan Stanley ($MS): Kicked off 2025 strong with Q1 profit doubling to $3.7 billion and shares gaining over 4%.
Bottom Line: Bank earnings are crushing it. Profits are surging, and stocks are responding. That’s what matters.
Personally, it’s hard for me to be bearish when bank stocks are holding up this well. Take a look at this weekly chart ⬇️ the big banks are putting in massive reversal candles.
Regional banks? Same story.
The KRE (Regional Bank ETF) is setting up beautifully, showing one of the best risk-on signals for a reflationary environment.
Oh, and one more risk on gauge. Bitcoin.
Right now, our portfolios are long XLF (financials), KRE (regional banks), and Bitcoin. If you’re not already in these trades, this could be a good time to start or add to positions.
Yes, the end of 2024 was volatile, and things didn’t go exactly as planned. (70% for 2024 is just find with me, that is not what I am saying… but December was choppy)
Welcome to trading.
You can’t force the market or a river to bend to your will—it moves when it’s ready, not when you are.
That’s why I don’t use time stops.
And guess what? Now it looks ready.
Maybe we’ll see a strong January, and as the saying goes, “As January goes, so goes the year.”
Heat Check:
Despite all the correction chatter, the data says otherwise. Historically, big corrections (10%+ drops in the S&P 500) happen when sentiment is overly optimistic. Right now, we’re nowhere near that:
AAII Bulls-Bears Spread: 11th percentile.
NAAIM Stock Allocation Survey: 42nd percentile.
These are far from those danger zones.
Yesterday’s disinflation data had stocks, bonds, and even commodities rallying. But don’t get too comfortable. Sustained disinflation isn’t a done deal, and inflation continues to be sticky and is here to stay.
If you would like to hear more: Stay connected!
Here is another look at sentiment from Jason Shapiro.
People are panicking like it’s a market crash every time there’s a pullback. Guess what? That kind of fear typically sets the stage for more upside in stocks.
It’s increasingly looking like a bottom has formed…
Grant from The Daily Number is starting to see some bullish data points.
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There is also strong momentum in New Highs in the NYSE.
As you can see: New Highs are significantly outpacing New Lows.
And the bull bear indicator is not all systems go just yet.
The primary and intermediate trends? Solid. The short-term isn’t fully bullish just yet on our bull/bear indicators, but if the market closes strong today, we’ll see over 50% of stocks above their 50-day MA. That would confirm a bullish trend across all timeframes.
I’m still bullish.
As a trader, I don’t get paid for predictions—I get paid for trading what’s in front of us.
Always weigh the evidence and act accordingly.
The Real Trend of 2025? Commodities.
While everyone’s obsessing over stocks, commodities are quietly stealing the spotlight. A lot of traders are struggling, but here’s the YTD story for futures:
Also what sectors are leading…
Energy and materials—the most hated sectors of 2024 are now leading the charge in 2025.
If you’ve been around here for a while, you know the drill: hunt for relative strength. It works.
Yet, the conversation I keep having over and over is with people trying to buy laggards.
Look, I’m not saying we pile into energy when it’s already skyrocketing 4324234% above the S&P.
What I am saying is, wait for some momentum and relative strength. Let the market confirm your idea before you go long.
Long story short? Confirmation raises your probability of being right. And in this game, probabilities are everything.
Against All Odds Research
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Twitter: Jason P (@jasonp138)
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BARC.L and BBAR 🚀🚀 CM RY SAN not so much. US banks in the goldilocks zone for reasons I don't understand. 😅