The Week of February 24, 2025

The upcoming week should be another exercise in confusion, as is typically the case when things are changing on a daily basis. The first thing that will be talked about is the likely win by the “conservatives” in Germany, although it is probably best thought of as “not left.” What does this mean? We don’t know yet, but I would assume it will be more of the same going forward. Germany will continue to decline over the longer term, but in the short term, we might see a positive bounce. Only time will tell, but the longer-term trajectory for Europe, and most certainly Germany, is further weakness and stagnation.

Consumer Confidence comes out of the USA on Tuesday, and some people will be watching this closely because they are worried about inflation in the US. However, I can think of no indicator that is typically wrong like this one. While there could be a reaction, it won’t last long. I cannot tell you how many times the number came out really low, only to see Retail Sales remain high. The most American thing I can think of is the person who tells you how the economy is going to shit but is also eating a $45 steak while saying this. And washing it done with a $14 glass of wine, just after spending $200 on random crap in a mall.

I witnessed this exact thing this weekend. Granted, I live in Columbus, Ohio, which is an economically strong city, but in the end, this is the reality on the ground around the majority of Ohio. Ohio is the 6th largest population in America for what it is worth. I believe that the US economy continues to power ahead. This leads the way in the markets, as the US strength will continue to be a story. (Longer-term, that is.)

The real story this week is going to be the Core PCE Price Index in the USA. This is the Federal Reserve’s favorite inflation indicator and is expected to come out at 0.3% during the Friday session. This will be one of the big “tells” as to what monetary policy is going to be in America.

Bitcoin/Crypto “Hack”

Congrats to Lazarus, the supposed hacking group that lifted something like $1.4 billion’s’ worth of crypto last week. These people are all affiliated with the North Korean government. and have been an issue more than once.

We saw BTC fall a bit on the news, but like everything else at this point, “Bitcoin fixes this” seems to be the mantra. This is fine; the beauty of trading suggests that you can create wealth whether or not you believe such things. One thing I have seen more than once is fraud in this area. It almost never causes a serious reaction, and if it does, it only leads to more buying.

Does this mean I think Bitcoin is going to be the global reserve currency? No. I don’t think this. In fact, I think it’s bullshit. However, I have traded it for some time now and will continue to do so. That’s the point. Don’t get too wrapped up in the constant bickering about what it is or isn't. The average person doesn’t care, nor will they ever use it. Why bother doing something that takes extra steps when your Visa will do the trick? Ironically, I had a conversation with someone recently about how great it is to be able to spend their BTC with a Visa card now. What’s the point?

The most important part for us is that we aren’t going to be seeing it go away anytime soon. It will continue to be “the thing” until it isn’t. I could be wrong; it could be the global reserve currency, but all that matters to me is that I made wealth with it. I will leave all the other thoughts to the maxis.

I believe this market is “stuck in a range” for a while, and accumulation—slowly—is about the only thing to do at this point. The US government will be the next catalyst going forward. If they make it more mainstream and regulated, it will go higher. If it drops, I will just buy more.

Dollar Index Sitting at Interesting Spot

So at this point, the US Dollar Index is catching my attention. We have seen a 4 handle drop in this index, from the 110 level to the 106 level. What I find interesting is that we are getting to a point now where we are testing the previous resistance barrier of 106 for support. I think this week could be important from a technical analysis standpoint. I also find it interesting that the tariff discussion isn’t over yet. While Mexico has made massive strides towards what Trump wants, Canada hasn’t. Trump is the wildcard. Also, let’s not forget that he is watching the European Union very closely.

Trump wants to bring manufacturing back to America. This is the real end goal here. Nobody really gives a shit that Canada tariffs dairy products from America at 270%, which is what they do. What he wants is to start the factories back up. This past week, Taiwam Semiconductor, the world’s premier producer of microchips, announced a partnership with Intel to produce those chips in the United States. This is the latest in a list of companies looking to build in America. This won’t be the last.

By the end of the week, I anticipate that the future trajectory of the USD might be a bit clearer. However, watch that Friday Core PCE number. If it is hotter than anticipated, the USD strengthens. If Trump goes on a tirade about tariffing someone else, it could cause the USD to rise as well. By this time next week, I expect a bit more clarity. It would be nice, anyway.

Trading During “Trump 2.0”

I cannot stress this enough. Cut down your position size for now. I know you want to get rich overnight, but the reality is that when Trump runs things, unpredictability is the norm. Trading during a Trump presidency is an entirely different game. Yes, things will calm down, but for now, the markets are acting like teenage schoolgirls. Understand, we will eventually see even the slow kids understand what it is he is trying to achieve. It isn’t that complicated, and he is pretty open about it. But as the expression goes, “The European mind cannot comprehend this.” I think that might be part of what’s going on—a lot of people caught overguard by a leader doing everything he said he was going to do.

Trade well y’all.

Chris