LIVE AT 1 PM ET: CLAIM LANCE IPPOLITO’S $870 GIFT AND A SHOT AT THIS WEEK’S TRADE TARGETING $5K!
As we head into 2025, it’s clear this year won’t be a repeat of 2024’s bullish climb — not by a long shot. While the S&P 500 enjoyed a remarkable 23% gain last year, warning signs are flashing across the market, suggesting a rockier road ahead.
For traders, understanding these risks and planning accordingly will be key to navigating what could be a more volatile and challenging environment.
One of the biggest concerns going into the new year is the state of consumer credit. Credit card balances are nearing their limits, leaving little room for additional spending.
With personal credit largely tapped out, we’re likely to see consumer spending — a major driver of the U.S. economy — start to slow. This doesn’t just affect retail and Consumer Discretionary stocks… It ripples into the broader economy, impacting sentiment and growth.
There’s also the risk of a recession looming on the horizon.
While a 2025 recession isn’t guaranteed, the possibility increases when looking further into 2026. Slowing consumer spending and potential corporate cutbacks could compound into broader economic weakness.
It’s not imminent, but it’s something traders need to keep on their radar as they assess the market’s direction.
Adding to these risks is a fragmented January.
With several trading holidays chopping up the month, volume is expected to remain low, leading to higher volatility and the potential for sharp moves in either direction. Thin participation could make it harder for the market to find its footing, leaving the S&P 500 and other major indices vulnerable to downside risks.
We’ve seen some troubling signs on the technical front.
The S&P 500 recently broke below its 50-day moving average (MA50), and the equal-weighted S&P 500 (RSP) is hovering dangerously close to its 200 MA. This divergence between market-cap-weighted and equal-weighted indices underscores the structural weakness in the broader market.
Small-cap stocks, as measured by the Russell 2000, are in a similar precarious position, mirroring the struggles of the RSP.
For traders, the lesson is clear — caution is key.
This is not the time to go “all in” on the next rally. Instead, a balanced approach is warranted, with increased attention to downside protection. Expect to see more puts in portfolios as we move through the early months of 2025.
While it’s too soon to call for a bear market, the risks are stacking up.
By staying nimble and focused, traders can position themselves to weather the storm and seize opportunities as they arise. Just don’t expect 2025 to hand out gains as easily as 2024 did — the market doesn’t make it that simple.
Kane Shieh
Kane Shieh Trading
Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!
- Telegram: https://t.me/+Ji2OakXnGMM5OTI5
- YouTube: https://www.youtube.com/@GammaPockets/featured
Important Note: No one from The TradingPub team or Kane Shieh Trading will ever contact you directly on Telegram.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. A Better Trading Opportunity to Start the Year
Join Lance Ippolito and Nate Tucci live at 1 p.m. ET today, Jan. 6, as they reveal a new trading opportunity to start the year.
Nate was able to more than double the results Lance got on 100 live trade alerts just by making a few tweaks to the trading rules.
And now they want to show you how you can take advantage of these opportunities.
There are no guarantees of course to future returns or against losses…
Join the Fun at 1 O’clock Sharp!
The profits and performance shown are not typical. We make no future earnings claims, and you may lose money. The trades expressed are from an internal audit that applied a new set of option criteria to Lance’s real published alerts of the last year. The result was an 85.1% win rate, 38% average return (winners and losers combined) with an average hold time of 11 days.
