WoSSCapital

Happy Sunday, everyone. Weekly Update time Welcome to this week’s WoSS Capital Market and Portfolio Update—covering the quiet, holiday-thinned trading window of December 22–28, 2025. With Christmas and Boxing Day falling mid-week, volumes were exceptionally light and price action, as expected, was subdued—mostly consolidation in the final stretch before the new year, with a few notable exceptions. No major central bank meetings nor big data prints to highlight, and only minor flows from year-end rebalancing. The week was more about positioning for January than dramatic moves. That said, the underlying setup remains supportive: liquidity is still a tailwind with the potential to grow stronger into Q1, softer inflation lingers in memory for last week, and labour-market softness is quietly building a case for a more dovish Fed action in Q1 2026. There was also some movement in precious metals to discuss. Let’s get straight into it. Executive Summary Markets: Very quiet Xmas week—S&P 500 +0.9%, Nasdaq +0.4%, DJI +1%, Bitcoin -1%, Gold +4.5%, Silver +17.85%! Year-end tax harvesting and window dressing dominated, with precious metals (including Palladium and Platinum) the big movers this week. Macro: No new data of note; November CPI softness though still in play. US labour weakness (4.6% unemployment, weak NFP prints) continues to quietly diverge from the Fed’s 1-cut 2026 path. Policy: BOJ hike last week already digested; Fed RMPs chugging along and adding ~$40B/month in Treasury bills—which is supportive liquidity without the official QE label as we’ve previously discussed. Portfolio: No changes—risk-on posture held (equities + gold heavy, Bitcoin 0%). Outlook Teaser: Emerging right-tail risk of 2+ Fed cuts in 2026 (possibly Q1 start) if January NFP/unemployment prints weaken further. If that materialises it could bring with it strong risk-on momentum into H1. Recession odds remain small (my internal metrics remain at ~20% trigger breach) which may inhibit Fed willingness to act too quickly though. Market Update: US Focus Equities: S&P 500 closed the week up ~0.9% (~$6,929), with the Nasdaq up ~0.4% ($25,644), and the Dow up ~1% ($48,710). Thin volumes—unsurprising with many desks half-staffed for Xmas week—contributed to mostly consolidatory movement, though SPX did post a (marginal) new All Time High. Late-week short-covering in AI/tech (Nvidia/Micron bounce) seems to have offset early tax-loss selling. Overall, something of a holiday drift: no conviction in any move up, no strength in any breakdown. YTD performance still strong (S&P +17.4%, Nasdaq +21.4%, Dow +14.2% and Russell 2000 +13.6%). Bonds: 10-year Treasury yield steady ~4.13–4.15% though a little down on the week. Real yields remained soft (inflation expectations anchored). IG (Investment Grade) spreads held tight; HY (High Yield—Junk) saw very minor year-end pressure but nothing systemic. Curve still steepening slowly—classic “higher for longer” signalling which is clearly at odds with our CPI and labour market hypothesis for cuts. So Risk remains here. Gold: Gold had another powerful week at +4.5%, ~$4,533/oz. Geopolitical noise and year-end safe-haven buying saw an across the board rally in precious metals with Silver up over 17.8% as well, Palladium (+12.4%) and Platinum (+24.3%) also joining the party. It also crucially broke the level we were tracking for distribution, so upside resolution. A positive change this week on a YTD performance ~+72%—my best performer of 2025. Bitcoin & Alts: BTC bounced off ~$87k mid-week, awaiting close at ~$87.5k at time of writing. Crypto remains risk-off for me in a risk-on market; lots of noise around Bitcoin, but for me absolutely no signal as yet. Monetary & Fiscal Policy Highlights No new meetings or major announcements. Fed RMPs continue (~$40B/month Treasury bill purchases)—providing steady, technical liquidity support without reopening the QE debate. US November CPI softness (2.7% YoY headline) still the last big print; October data somewhat void due to shutdown means December release (Jan 15) will be watched closely by everyone, including the Fed. Fiscal: Year-end spending bills passed narrowly; deficit trajectory unchanged. Tariff delays are still easing near-term pressure though so no major issues here. From Around the World Japan: Post-BOJ hike digestion continues—USD/JPY dropped back to ~156 but still no systemic risk here for me as yet (152 when my canary starts singing and 150 where things start to break). Carry-trade unwind fears remain, but for now all risk, no signal. Europe/UK: Markets closed early and liquidity was thin. UK net liquidity contraction remains an outlier across major economies—one of only two not expanding—worth tracking into 2026. Not great for the UK so we watch for positive change here into Q1 Gold Distribution Risk—Update Fig 1.1—Gold Distribution Risk Risk Status: Closed In a week of strong moves in metals, Gold moved strongly above the potential distribution point high invalidating this risk. Positive news for Gold bugs as the yellow metal looks to end the year in a fashion befitting its performance during it. From a Bull flag perspective the technical target here is ~$5,730 (on a macro scale, so longer term—3-12 months minimum for successful completion) with the pennant breakout technical target at ~$4,900, a more realistic medium term (1-3 months) area. All in Gold still looks strong and I continue to add to this position on a monthly basis. Precious Metals—What a week! Fig 2.1—Silver Weekly Chart I couldn’t let this week pass without a mention for the moves in metals. Starting with Silver (+17.8%) it’s a strong end to a super year here as well (~+174%). I hold no silver, despite many questions from subscribers and Discord members through the year and boy haven’t they done well! Congrats to you if you took this position through 2025, a great call for whatever reason you made it. Fig 2.2—Platinum Yearly Chart Platinum also finished the year strongly at +24.3% this week, for an overall annual gain of ~+168.8% and a new All Time High to boot. With Palladium also up ~+111% in 2025 the question is “should we be concerned with the mighty metals?”. And that is a great question—more on that later. Focus Area 1—Looking Ahead to Q1 2026 & Dovish Pivot Risk Rising The most interesting development isn’t what happened this week—it’s what might happen in January as I’ve hinted at a few times. US labour-market softness is quietly building: Unemployment at 4.6% (highest since Sep 2021) already above Fed’s end-2026/2027 projections. October NFP –105k (largest drop since Q4 2020); November +64k — weak trend. Continuing claims trending higher; deferred DOGE exits may weigh on January print (released pre-FOMC). If January NFP prints soft again (consensus ~100–150k), markets could force the Fed’s hand earlier than their dot-plot guidance (1 cut in 2026). Current market pricing is for ~2 full cuts (March + July) which is already at odds with Fed guidance. A dovish pivot to 2+ cuts—potentially starting Q1 if labour weakness drives them there—would join Growth, Inflation, Fiscal, and Liquidity in net positive territory, making 5/5 key cycles bullish for risk assets. Implications: Right-tail risk: Stronger-than-expected risk-on momentum into H1 2026 (equities, gold, potentially crypto re-entry signal). Recession odds: Still small (~20% on my internal triggers). No widespread stress in labour data yet. Portfolio positioning: I’m staying risk-on (equities + gold heavy) precisely because of this asymmetry. If dovish pivot materialises, upside looks better than downside, but as always I maintain flexibility with changing data and risk signals So, for readers this is a watching brief for now—January data will be decisive. Focus Area 2—Precious Metal Foreshadowing As pointed out above, the surge in metals pricing is one worthy of risk consideration so let’s dive into that for a moment. Strong demand through 2025 has led to some face melting movement in the metals space and has brought with it almost as much speculation as to the reasons. We could make the case for many possibilities: Inflation Hedge: Persistent inflation (US CPI at 2.7% YoY, softening but above target) and currency debasement fears. Geopolitical Tensions: Middle East and Russian unrest boosts safe-haven flows. Liquidity: Fed RMPs and global easing keeps money flowing into hard assets. Industrial Demand: Platinum and Palladium gains tie to auto/catalyst sectors, possibly reflecting supply constraints or green tech shifts. Ultimately though, to my way of thinking the reason is less important than any potential risk being signalled, specifically that left tail that I like to try and cut off as best possible. So, what have these sorts of moves heralded historically? Well, Stagflation (1970’s), Financial Crisis (2008), Debt Crisis (Eurozone, 2011) and, the most likely here for me, Monetary Expansion (Covid recovery, 2020). That spikes in precious metal pricing (mainly Gold and Silver) tend to precede Monetary Expansion is a significant right tail risk here in my view and one that we’re already positioned for as a result. Metals continued price expansion continues to support that position. From a left tail perspective, the two I think worth raising are: Inflation re-acceleration: sharp gains in metals often precede inflation spikes which could pour cold water on liquidity expansion to support risk-on positioning, should central banks react hawkishly. One to be aware of for equity/crypto but likely to remain positive for Gold/Silver. Policy Misstep: The Fed’s “higher for longer” signalling clashes somewhat with labour market numbers and CPI data. Increasing precious metal pricing could be a reflection of market confidence (or lack thereof) in the ability of the Fed to get the timing of cuts right. Given their recent history, even their not so recent history, I think betting against the Fed timing this one correctly is probably a safer bet than not! They have been late in every major decision the last 25 years! Long and short, there’s risk here for us to be aware of. Nothing particularly troubling at the moment and as Gold is a key part of my target positioning I’ll continue to ride that wave for now either way. I won’t, for obvious reasons, be adding any other precious metals for now. Emerging Risks This Week Ultra-Thin Liquidity: Holiday volumes amplify moves—small flows can cause outsized swings. Inflation Re-Read Risk: December CPI (Jan release) will be scrutinised—shutdown gaps still cloud November. Mighty Metals: Could the surge in metals this year be foreshadowing similar events as highlighted above? One for us to monitor, My Portfolio Update No changes this week—defensive risk-on posture held Small alt allocation (~15% of total portfolio now) remains 50% deployed—just for fun, not in risk framework. Quick 2026 Outlook Teaser Base Case: Risk-on through H1. BTC likely bottoms Q2/Q3. H2: watch if dovish Fed + liquidity reset sparks another full risk year. Recession odds low (20% trigger breach). Right Tail (Bull): 2+ Fed cuts starting earlier than anticipated + liquidity tailwind through QE = rise sharply. Left Tail (Bear): Inflation reacceleration leads to steeper curve + value rotation = recession triggers rise. Precious metal expansion foreshadows stagflation or recession meaning bubbles go pop. Our goal isn’t to predict perfectly—it’s to chop off the left tail by extracting signal from all the noise. That’s why we focus on full risk distribution, not bull or bear absolutes here. Conclusion A mostly non-event week to close 2025—but the quiet is setting up an interesting January. Dovish pivot risk is rising, as is the potential for printing via QE; if labour data confirms weakness, risk assets could get a meaningful Q1 bid. Precious metal strength though keeps us grounded in potential left tail risk, with stagflation and recession in mind. Wherever you are, enjoy the holidays—family, food, and rest. We’ll be back next week (likely a lighter update) to kick off 2026. Thanks for your support—top comment questions answered next edition! — WoSS

And the poll winner for the next educational article was: Expected Value. So here you go, with a bonus prize at the end--A free EV and Simple Position Size Calculator added to my free toolset. Enjoy ---------------------------------------------- A Case for Expected Value: Unlocking Your Mathematical Edge in 2026 The tools of the successful trader: maths, patience and risk management Back in March 2024, I penned a piece on expected value—a concept I argued was the cornerstone of rational decision-making in finance, trading, and life in general. It’s a topic that’s stuck with me, and given the market turbulence we’ve navigated since—from tariff shocks to Fed pivots—it feels timely to revisit with fresh eyes. That it won the poll to be my next educational article on X simply sealed the deal! This isn’t just a rehash of that article; it’s a full rewrite, sharpened to reflect the voice and framework we’ve honed at WoSS Capital in the period between then and now, one of economics, risk, incentives, trade-offs, and rational choice, with it all grounded in the data-driven lens you’ve come to expect. Read to the end for a free bonus: an EV and simple (no leverage) Position Size Calculator app! EV: What is it? Expected value (EV) is the weighted average of all possible outcomes, where each outcome is multiplied by its probability. Simple, right? For the aspiring traders out there It’s the mathematical heartbeat of an edge—whether you’re sizing a crypto trade, betting on a stock, or deciding whether to hold cash in a world of sticky inflation. To take it a step further, the Kelly Criterion refines EV into an optimal bet size, balancing growth and risk—a tool I’ve used personally and will illustrate here. Too often, though, both are overlooked amid emotional noise or short-term hype. Today, I’ll explore why mastering EV and Kelly is your best weapon against uncertainty, with updated 2025 examples, a nod to our current Fourth Turning turbulence, and practical takeaways to apply into 2026. Let’s dive in. Probability: A Working Understanding Before we move on I want to clarify mathematical probability, as it’s key to these concepts. In the trading world people talk about probability a lot but I often wonder how many actually know what it means and how to apply it to our advantage. Simply put, probability measures the likelihood of any event occurring and thus can be used to help us quantify “uncertainty”. From here, with the variables defined, we can predict outcomes. The formula for calculating probability is pretty simple: P(A) = Number of favourable outcomes / Total number of possible outcomes Let’s look at a quick example to hammer this home, make sure you understand the point fully. Suppose you have a standard six sided die. You want to know the probability of rolling a 3 on that dice. To calculate this, the formula is P(3) = 1/6, or 16.67%. The same probability exists for any number on the dice, as there’s only 1 favourable outcome amongst the 6 possible outcomes. Further, we can calculate the probability of rolling two of the desired number in a row by chaining the results. So P(3) = 1/6 x 1/6 = 1/36, or 2.78%. Too many people in trading talk about probability in the abstract, inferring uncertainty in outcomes as a result of probability but without using it in its true mathematical context. I can be guilty of this too from time to time, where experience and having seen events play out before allow for a notional probability of outcomes to be applied. But in the online world of trading influencers this isn’t always the case, probability is just flat out used incorrectly, often to hide misunderstanding. Anyway, hopefully this example conveys to you the knowledge of what probability actually is in a mathematical context as it’s one of the key variables we need when considering expected value. The Core Concept: Why Expected Value and Kelly Matter At its simplest: EV = (Probability of Success × Payoff) – (Probability of Failure × Loss). It’s about stacking the odds over time, aligning with rational choice as we weigh trade-offs under scarcity (capital, time) and respond to incentives (profit, preservation). The Kelly Criterion builds on this: it calculates the fraction of your capital to wager for maximum long-term growth. The formula is: 𝑓*=(𝑏𝑝−𝑞)/𝑏 where: 𝑓* is the fraction of your total bankroll or capital to wager. 𝑝 is the probability of winning the bet or investment. 𝑞 is the probability of losing (1−𝑝). 𝑏 is the net odds received (Decimal Odds - 1). “It’s just a big game of Maths!” Yes, WoSS Capital is a weirdo who likes maths and thinks it matters (a lot)! But don’t fret, if that all looks daunting, like most things it really isn’t when you see it in action. So let’s have a quick look at an example for that purpose. EV & Kelly in Action: An Example Application Scenario: You have a back tested strategy with a standard win-rate of 40%. You are looking to take a trade with a projected R value of 2.0 (Risk:Reward of 1:2) meaning a $2 return for every $1 risked. Probability of Success: P(W) = (1/2) = 0.5 (50%)This is where I throw you a curveball! In this instance, mathematical probability is 50% because there are only two outcomes (Win or Lose) and 1 of those is favourable. But in trading we have the ability to backtest our thesis to understand historically what the probability of a favourable outcome is and tweak (or “tune”) strategies to optimise. So, here, we can use our back-tested win-rate as a proxy for mathematical probability. Expected Value: EV = (0.4 x $2) – (0.6 × $1) = $0.2You should expect to return 20c for every $1 staked at a 1:2 risk ratio. This is a positive EV, meaning over time trades taken in this strategy at 1:2 would be expected to be profitable over a long enough series. Scaling up for $100 stake, EV would be $20 Kelly Criterion: Kelly (f∗) = ((2.0 x 0.4) - 0.6) / 2.0 = 0.1 (10%)In this scenario should wager 10% of your available capital for most efficient results over a long series of trades. This is the number that maximises growth. For a $1,000 account, that’s $100 per trade for this strategy. Expected growth rate compounds optimally, but over-sizing (e.g. 20% account) risks ruin if a losing streak hits. EV, in essence, tells you whether you have a winning strategy over time (when positive) and lets you cut strategies that aren’t long-term positive (negative EV) before assigning capital to them. Kelly is an alternate way of position sizing for mathematical efficiency of compounding over time. Consistent positive EV with Kelly-sized bets compounds into a long-term edge in markets (as well as other pursuits!). “Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain. That’s what it’s all about.” —Warren Buffett Assumptions of note: EV and Kelly assume no transaction costs, consistent probabilities, and unlimited capital. In practice, add 0.1-0.5% for fees/slippage, and revalidate win rates regularly to protect accounts. 2025’s Lessons: EV and Kelly in Action Amid Turbulence Let’s ground this in 2025’s reality as a thought experiment. The US economy grew 2.1% in Q3, per advance estimates, with consumer spending resilient despite tariff headwinds. Yet, inflation hovers at ~3% (CPI & PCE)—above the Fed’s 2% target—and the labour market is softening (unemployment up to 4.2% in November). Markets oscillate between Fed rate-cut hopes and fiscal deficit fears. Example 1: S&P 500 (Value Stock Trade) Strategy: Buy a value stock (e.g., a bank at 10x earnings) on a dip, expecting a 15% gain if recession odds stay low, with a 5% loss if tariffs spike inflation. Backtested Win Rate (p): 45% (tuned from historical rotation data) Risk:Reward (R): 3.0 ($15 gain per $5 risked) Probability of Failure (q): 55% (1 - 0.45) EV Calculation: EV=(0.45×$15)−(0.55×$5) =$6.75−$2.75 =$4.00$4.00 expected return per $5 risked, or $0.80 per $1 risked = positive EV. Kelly Calculation: f∗=(3.0×0.45)−0.55 / 3.0​ =1.35−0.55 / 3.0 =0.8 / 3.0 =0.2667 (or 26.67%)Application: For a $1,000 account, bet ~$267. Or, half-Kelly (13.3%, ~$133) reduces ruin risk for market volatility. Example 2: Bitcoin (Spot Long) Strategy: Long Bitcoin at $90k, targeting $100k (11.1% gain) if liquidity supports, with a 11.1% loss to $80k if support breaks. Backtested Win Rate (ppp): 55% (from 2025 MicroStrategy-driven rallies) Risk:Reward (RRR): 1.0 ($10k gain per $10k risked, adjusted for leverage) Probability of Failure (qqq): 45% (1 - 0.55) EV Calculation: EV=(0.55×$10k)−(0.45×$10k) =$5,500−$4,500 =$1,000$1,000 expected return per $10k risked, or $0.10 per $1 risked = positive EV. Kelly Calculation: f∗=(1.0×0.55)−0.45 / 1.0 =0.55−0.45 / 1.0 =0.1 (or 10%)Application: For a $10,000 account, bet $1,000. Given crypto’s tail risk, half-Kelly (5%, $500) is safer, with a stop at $88k. NOTE: THESE ARE NOT SUGGESTIONS FOR TRADE; THEY ARE GENERAL EXAMPLES OF THESE PRINCIPLES IN PRACTICE, NOT TO BE TAKEN LITERALLY. Historical Anchors: EV and Kelly Through Crises History validates this duo over time. During the 2008 crisis, hedge funds like Citadel used EV and Kelly-like sizing to bet on recovery, outperforming peers. Post-WWII, US debt (106% GDP) fell via growth and inflation—an EV bet on real yields paid off for bond holders who sized with Kelly principles (fractional bets to survive volatility). In the current Fourth Turning, per Neil Howe’s The Fourth Turning Is Here (2023), we’re in a crisis climax (early 2030s). Past turnings—Civil War, Depression/WWII—saw tech and policy shifts reshape economies. Howe notes: “Beyond our imagining will be all the technologies yet to reshape how we are linked to machines.” EV and Kelly could guide us through, turning scarcity into calculated growth. Philosophically, Adam Smith said: “It is not from the benevolence of the butcher... that we expect our dinner, but from their regard to their own interest.” EV and Kelly align self-interest with systemic good—if we calculate rationally. The Traps: Why EV and Kelly Get Ignored EV and Kelly fail if emotions or bad data distort the probabilities. This is behavioural economics 101 and presents with the following flags: Overconfidence: Traders overestimate wins, ignore tail risks (e.g., 2022’s crypto crash). Loss Aversion: Fear of $50 loss outweighs $100 gain, skewing choices. Short-Termism: Politicians chase immediate EV over long-term compounding. Kelly’s pitfall is found in over-betting, which ruins you if probabilities are off. John Kelly Jr. (1956 paper) warned: “Optimal growth assumes perfect knowledge.” LinkedIn’s 2024 analysis also noted variability—a coin flip’s EV is 5 heads in 10 tosses, but you could get 0 or 10. In markets, this risk presents as black swans (tariffs, shutdowns) which disrupt tested strategies, with many other such risks. The solution? Stress-test with scenarios and use either fractional Kelly (e.g., 0.5x) to mitigate ruin risk, or individual (bespoke) position sizing maths for consistent sizing versus your own particular portfolio and flexible risk tolerance (i.e. a fixed risk of 2% per trade that can be reduced to 1% or 0.5% to reduce risk). Personally, I favour my own position sizing maths and this flexible risk tolerance approach over Kelly (personal choice), which I might cover in a future article to explain how I apply it. But I know others who use Kelly successfully as well. These education articles are about education, not telling you what to do or claiming one way correct over another.. Practical Takeaways: Building Your EV and Kelly Edge should you choose to - Quantify Every Decision: List outcomes and assign probabilities, then calculate EV. Then, if you want to, apply Kelly. - Repeatability: Focus on strategies with positive EV over 100+ trials–size consistently with Kelly. - Position Sizing as an alternative: Limit single bets to 1-2% of capital using your own bespoke position sizing maths. Data-Driven Updates: Reassess weekly with fresh data (e.g., Fed moves, liquidity flows). For my macro portfolio, I use a different risk methodology to manage volatility-adjusted momentum for large macro moves, while in my trading portfolio, I use EV on every strategy with backtests and my own consistent position-sizing formula to tilt toward long-term equity growth. Conclusion: Your Edge in an Uncertain World Expected value and Kelly aren’t magic – they’re disciplined math. They’re also not the only way to build an edge—just one option. In a Fourth Turning crisis, where old systems falter, they offer a lighthouse allowing us to navigate by probabilities, not panic. This refreshed take builds on my 2024 piece, updated for 2025’s stakes. Paid subscribers get weekly market updates, portfolio transparency, and tools like a Kelly calculator (coming soon). For free subscribers, as an added bonus with this article, check out the FREE EV & SIMPLE POSITION SIZE CALCULATOR on wosscapital.com. What’s your EV/Kelly/Sizing or just general Edge approach? Drop thoughts below–let’s reason together. — WoSS

Weekly Market & Portfolio Update The week in review, emerging risks and WoSS's portfolio changes Good evening, subscribers. Welcome to the inaugural edition of the WoSS Capital Weekly Market Update on substack – a running series where I’ll break down the key moves across major asset classes, highlight policy implications, flag emerging risks, and (most importantly) share transparent updates on my own portfolio positioning. I’ve been providing this update for some time in Discord groups, but given my recent move to centralise my longer form article content here it makes sense to include these updates on substack as well. Website & Sigma! Update I’m a little later than anticipated today as I’ve been busy with the continued redevelopment of my website, with some exciting news to share there too. In the coming months I’ll be redeveloping Sigma!, my bespoke financial tools platform, adding new tools and a new style to support a more native mobile to desktop app experience. This is an important evolution of the platform from a usability and scalability perspective. As part of this I’ve decided to move some of the calculator and non data storage requiring tools from behind the paywall into a free community tier, hopefully providing some useful applications for everyone to use in their personal financial journey. Today, I completed the first redevelopment of one of these tools—The WoSS Capital Inflation & Debasement calculator. This tool will allow you to project the impact of inflation on your spending power into the future or from the past. It will allow you to add debasement on top of CPI to get a full picture of spending power impact. It is pre-loaded with 7 major currencies (USD, GBP, EUR, JPY, CHF, CAD & AUD), each with their average CPI rate over the last 25 years configured to help you plan based on historical data. Check it out on my Website and keep an eye out for more tools going live in the coming months! Exec Summary This week was dominated by the Federal Reserve’s final meeting of 2025, with markets digesting a dovish-but-cautious rate cut amid lingering tariff concerns and a resilient (but softening) labour backdrop. US equities ended mixed in a classic rotation week: value and cyclicals outperformed while mega-cap tech lagged on AI valuation jitters. Gold continued to consolidate around it’s ATH while Bitcoin and crypto continued to struggle amid emerging cyclical bear market fears. Perhaps the biggest news of the week though was the Fed announcing the start of RMP (Reserve Management Purchases), which in essence means that having stopped balance sheet runoff in early December they will be starting to grow the balance sheet again, albeit minimally, from mid December. This was an unexpected change in tact from a Fed that has been reactionary in general and it led, inevitably, to calls of “QE has started!” from the permabulls. The reality—this isn’t QE (both structurally and by volume)—but it’s a change in tact, it will be balance sheet expansion even if very small scale and it does represent a dovish shift from the central bank that was, for many (myself included) unexpected. We’ll dig into this a little as well. Let’s dive in. Market Update: US Focus Equities: The S&P 500 closed the week down ~1% (ending around 6,827 after touching fresh highs mid-week), with the Dow up ~1% on financials/materials strength and the Nasdaq down ~2% as Oracle’s disappointing guidance and Broadcom’s margin warnings sparked a pullback in AI-related names. Rotation into value was evident–financials (+1.8%) and materials (+2.2%) led gains. Overall, a consolidation week ahead of year-end I think, with volumes lighter but sentiment supported by the Fed’s signal midweek. Bonds: Treasury yields bull-steepened post-Fed: front-end yields fell ~5bps while the 10-year hovered around 4.14%-4.19%. The curve steepening reflects expectations of fewer cuts in 2026 amid sticky inflation risks from tariffs and the updated Fed dotplot which painted a cautious picture as far as cut probability goes. Investment-grade corporates slightly outperformed Treasuries, but high-yield saw minor weakness pre-Fed jawboning on Wednesday. Gold: Gold traded in a tight range around $4,209-$4,240/oz, little changed on the week. The yellow metal held firm despite rising real yields, continuing its decoupling from traditional drivers–a sign of ongoing safe-haven demand amid fiscal/geopolitical uncertainty. There is one emerging technical risk (see fig 2.1 below) as we see the classic signs of a distribution fingerprint—a technical signal I have developed over the years and discuss often in our trading Discord. An emerging risk to be managed for sure. Bitcoin & Alts: Bitcoin fluctuated between $88k-$94k, closing around $90k (down slightly on the week). MicroStrategy’s latest $962M BTC purchase (taking holdings to 660k+) provided a floor, but crypto lagged equities as risk-off flows hit tech proxies. Alts were mixed, with Ethereum stable but Solana/Dogecoin stuck in ranges. Overall crypto remains Bearish in my opinion and I’ll provide a fuller Bitcoin review describing why below. Gold Distribution Risk As mentioned above, Gold has printed a classic distribution pattern for me this week, with a lower wick high but higher candle body close. More than two thirds of the time these play out as Bearish corrective signals. Interestingly, as marked, from a Price Action perspective there’s also a strong case to be made for a Bullish setup here with a pennant/bull flag. As with any competent Technical Analysis we map both left and right tails so we understand the full probability of outcomes, then we observe which one the market signals more likely, generally by invalidation of the other. In this case a weekly closure below the uptrend invalidates the Bull case and a closure or wick above the current wick high (first wick high) invalidates the Bear case. I’ve been in Gold heavily since this time last year and I remain fully positioned for my target allocation. I have a risk framework that I stick to, for which technical factors like this play a role, but for now no panic—simply map the potential risks and wait. Bitcoin (and Crypto) I’ve shared this a few times across my feeds, but I’ve been out of Bitcoin based on my risk triggers since early November, an exit around the $106k levels. This has proven to be an astute call by the risk framework given Price Action since. From a technical perspective: Trend remains Bearish post 2 major structural trend breaks and the close below the 3D 200 MA (on a weekly basis). This has never happened this late into a Bull Market/4 Year Cycle and not signaled the cyclical Bear. This initial move down appears to be a 3-3-5 flat expanded structure (the ATH the internal B high). This is missing a fifth wave down to complete either A, or the corrective structure if this is an internal retrace (lower probability). Potential for that final move down into the high 60’s, low 70’s unless price can close above the 1 low (highlighted in orange) above ~$103.5k. On the larger scale, wherever the low confirms here, any move up must be considered a Bearish retrace unless trend flips again on weekly closure. Confirmation of that now requires close above ATH. Volatility vs Momentum remains bearish. Given a Volatility weighted momentum signal would fire before closure above the ATH if it picks this up as a Bullish momentum shift I would re-enter on this signal, without waiting for the close above ATH. Ultimately, there’s a lot floating around at the moment (and for the last two weeks) about Bitcoin, liquidity, QE etc. I’ve posted my views on most of that and, thus far, as anticipated (and covered in those posts) it has played out. High level: Conditions remain Risk On, Equity (US and International exc-US) and Gold remain strong, Bitcoin and Crypto in general remains weak given the over riding risk on condition. Read more on substack..............

I continue to be humbled by feedback on my book "Escape The Wealth Illusion". Delighted people are finding value in my views on finance, investing, planning & life in general. Thanks for the kind words of support & recommending to new readers. Amazon: amzn.eu/d/0j2BsmOs

January Update. Enjoy. wosscapital.com/january-2025…

A few months off after publishing the book, back to it. A little site refresh & a new article out tonight, one that's been in my mind for a while. Hopefully back to writing short form content regularly now long form is done (for now at least!) wosscapital.com/a-case-for-e…

Escape The Wealth Illusion: amzn.eu/d/6Age2ds Book + Financial Plan Template + Actions To Complete #financialplanning #financialeducation #FinancialFreedom #FinancialLiteracy #Escape

Still waiting.......... (wicks dont count for me, only closure). Getting closer. :)

My 2023 Outlook. Cut down a bit from initial draft, but hopefully still makes reasonable sense. wosscapital.com/new-year-new…

M1 retrace, via W1, D1 confluence. Expect continuation of🐻W1 Impulse. Looking at 3 PoI, ~14, ~12 & ~7. Invalidation starts with D1 Range H break ~32.3, but given W1 driving also needs to get above W1 range retrace PoI's, first at 37.4. Structure I was getting at other day.