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Writer's pictureVincent D.

What 2025 Has in the Cards for the Market

Happy New Year, everyone! I hope most of you had a relaxing and enjoyable holiday season. It would have been even better if the stock market had remained euphoric, but on the bright side, the current pullback is very moderate and, in my opinion, likely nearing its end. I'll begin with a quick micro-update (written on Thursday January 2nd, afternoon) since not much has changed since our last update, but I also want to cover a few other topics in this New Year update.


Is the Pullback Exhausted?

Both our hedge signal and Risk Index flagged this pullback early on. Our initial plan was to hedge on the bounce; however, the drop happened so rapidly, and we accurately anticipated the bounce following the reversal on Friday, the 20th. The rapid cooldown in our Risk Index, which turned green again, combined with the strength of the bounce, led us to adjust our strategy.


Historically, our Risk Index shows that while it can slightly lead the end of a correction, it very rarely drops to 1 and then flips back to 4. Moreover, in most cases where we see a "B" bounce that retraces almost the entirety of the initial "A" wave, the subsequent "C" wave is typically shallow. As mentioned in our previous blog, we were comfortable holding our positions, even if it meant enduring a few red days. Given that today’s market closed slightly in the red, we believe most signs now suggest that this pullback is exhausted.


While we’ve seen some red over the past few trading days, market breadth has steadily improved. This was especially evident today; although SPY and QQQ dipped slightly into the red, most other stocks had a predominantly green day.


This shows that investors are increasingly betting on stocks outside of the "Magnificent Seven," indicating a growing appetite for risk. This environment is not typically one where we see major corrections. In fact, all significant corrections usually begin with the opposite: a flight to safety followed by a strong downturn.


Bitcoin serves as another example of this rising risk appetite. Since January 31st, Bitcoin has gained 5%, while SPY has declined by 0.71% during the same period.


Speaking of Bitcoin, although our initial target for this correction was around $88K, I wouldn’t be surprised if the dip we saw at approximately $91K on December 30th marked the bottom. If you recall the stats on pullback durations from the previous bull market, which we shared in our last BTC update, a bottom forming after 13 candles aligns relatively well with those figures (the average was 11 candles).


That said, this doesn’t mean we’ll see an immediate move to a new all-time high (ATH). Historically, pullbacks in a bull market have taken about 29 days on average from their start before reaching a new ATH.


Looking at our MLDP Z-Score indicator, it recently retraced to a value of 1, a level that has often acted as support during previous bull runs, including the one we experienced in January of last year.


This isn’t the strongest data point, as Bitcoin’s trajectory likely depends more on supply and demand dynamics. However, the MLDP model can still serve as a useful gauge of new investor interest in the currency, offering insight into what we might expect during a bull market.


Switching back to the stock market, our options-related metrics also support our thesis that this is a weak pullback likely nearing its end. While our Option Model did briefly revert to bearish, which brought our Risk Index back down to a level of 2, the line is currently oscillating around its threshold. This behavior is very different from the steep, free-fall pattern typically seen during a significant pullback.


Our other option metrics are showing encouraging progress. The implied correlation signal has now turned green and is no longer inverted, which is a promising sign. This shift indicates that market participants are moving away from broad, risk-off behavior and starting to differentiate between assets—a typical characteristic of healthier market conditions.


Our NYSE and Nasdaq derivative volumes remain firmly in the green, with a notable spread favoring bullish over bearish bets.


While this metric can occasionally lag during a correction, it has now been over two weeks since the FOMC press conference, and participants in the options market are still placing significantly more bullish bets than bearish ones. This behavior is atypical for a true correction, where we would usually see a shift toward bearish positioning.


Still on the topic of options, the VIX has ticked up slightly over the past two days but remains far from inverting. As I’ve mentioned before, while the VIX can spike in waves, it doesn’t typically return to contango before reverting to backwardation again during a correction.


Many signs suggest that this pullback is nearing its end, but it’s still too early to declare victory. Attention should remain on our Option Impulse, which should dip near the threshold, and on our Option Model. The next time it prints a bullish flag, it’s likely to hold, but the ultimate confirmation will come from the blue "safe" flag. By that point, I expect our Phase Angle indicator to rise above 0.06 and SKEW fallen at least 30 point from its high.


On a macro level, the market's movement this fall has been driven by optimism surrounding President-elect Trump and the expectation of stock market-friendly policies. However, the reality may turn out to be more complex—a topic I’ll delve into in the next section. That said, I believe it’s unlikely we’ll see a true market correction before the new administration takes office, as the anticipated changes have yet to materialize.

 

What I See for the Market in 2025

At this time of year, many people on social media are busy making their usual market predictions for the new year. I could create one too, crafting a narrative that aligns with historical bull market durations, macroeconomic forecasts, and countless other factors. But the truth is, such predictions hold little value because the market always finds a way to surprise us. After all, who could have predicted the COVID crash on January 2nd, 2020?


While I believe building a detailed narrative about the future is largely futile, I do have an opinion on the current market. As I’ve mentioned before, the current data landscape, combined with the political climate, leads me to think that this current downturn is nearing its end. That said, despite my optimism, there’s a lingering sense of bearishness gnawing at me. Since the begining of 2023, we haven’t had a meaningful correction—just a pullback that stopped at around -10% (fall 2023). By almost every metric, the market is starting to feel overstretched. While I don’t yet see the ingredients for a year-long downtrend like in 2022 or a prolonged crash like in 2007 or 2000, a strong pullback akin to the one in Fall 2018 seems entirely plausible.


Markets don’t go into strong correction without a reason. The year 2000 saw a bubble burst, accompanied by a recession. In 2007, it was the financial system collapsing. In 2018, the trade war with China and rising Fed rates triggered the downturn. 2020 was driven by COVID, and 2022 by aggressive Fed tightening.


We’ve speculated about potential recessions or a reversal of inflation, but so far, there hasn’t been a clear catalyst to justify a severe pullback. These two possibilities remain on the table, though, but 2025 could also bring entirely new sources of uncertainty. The most plausible, in my view, comes from the political realm. Regardless of political affiliation, most would agree that the next administration is poised to bring changes unlike anything we’ve seen in decades. Some voted for Trump because of this, and others voted against him for the same reason.


The team Trump has built since his election signals a clear intent for significant change, different from his first term. Many of his appointees are outsiders advocating for drastic shifts. Coupled with the increasing influence of Elon Musk in the administration, this promises substantial action. Musk’s recent clashes with leaders of the MAGA movement already hint at the magnitude of the coming changes. If you were involved in Bitcoin in 2021, you might remember how Elon Musk significantly influenced the market. He initially drove Bitcoin’s price up by announcing Tesla would accept Bitcoin as payment. However, just a few months later, he caused a sharp market pullback by reversing this decision, citing concerns about Bitcoin's reliance on non-green energy.


Markets thrive on stability and predictability. Change is the opposite of stability, and even if these changes prove beneficial in the long term, they could disrupt prosperity in the short term. This sensitivity to political developments raises the likelihood that one of these changes could trigger a ripple effect leading to a significant market correction.


In Summary: I don’t know for certain if we’ll face a strong correction in 2025, but it would be naive not to consider it as a real possibility. This perspective won’t alter how I’m currently invested, as I trust our tools to signal when to go exit the market. However, given the heightened risks, I plan to adhere more strictly and promptly to our hedge strategy, just as I did in 2022 and 2023.


On the Bitcoin side, the story is even simpler: bull market to cyclical peak ! There’s still plenty of tailwind, and despite pullbacks along the way, crypto will likely reach its cyclical peak in 2025. My target for this peak remains closely aligned with the analysis we published in December 2023—around $176K (+/- $24K). Sorry, I’m not in the $750K–$1 million camp, though I’d love to be proven wrong on this one. As the market evolves and begins to gain momentum, our top indicators will provide more precise insights, and we’ll revisit and refine our targets accordingly.


Investment Idea

Although I did think giving my opinion about a detailed timeline for market in 2025 was not that relevant, I tought it could be interesting once in a year talking about other investment idea. So here is some trend that I see, or way to play the market I think have chance to be rewarding assuming we remain in a bull market. These are not recommendation, not only I am not a financial advisor but these idea are just starting point to build a real complete investment thesis. I’m also interested in hearing your thoughts in the comment section about investment ideas for 2025.


Agentic AI

If you’ve read my blog post comparing the Dot-Com Bubble to the current AI trend, you’ll know my stance: we are not yet in a bubble. This doesn’t mean that some companies in the AI space aren’t commanding high valuations—similar to how Cisco stood out as early as 1997—but we don’t currently see the kind of indiscriminate "everything rally" that defined 1998 to 2000. One reason I made this argument was that the AI frenzy has mostly been contained within hardware and the ecosystems supporting it, much like the Dot-Com era prior to 1997. This is largely because AI has not yet found its “killer application.”

Here’s what I specifically wrote in that blog article:


"These are indeed lofty dreams, but we are still entrenched in the 1995–1997 phase: AI will transform our lives, yet the exact nature of this change remains unclear. Therefore, currently, the most viable and logical investments in that trend remain everything that revolves around data centers, including GPUs, cooling solutions, and energy. However, it’s only a matter of time before a shift occurs. Will Apple next fall provide a vision for AI usage that captivates the world and potentially ignites a bubble? Or will the innovation emerge from a lesser-known company diligently working in a garage? It’s uncertain, but one thing is sure: it will happen. When it does, it will likely be the catalyst for a genuine AI bubble."

I wrote that in July, predicting that the real bubble would start when we identified that “killer application,” analogous to when the web discovered its retail business application. Now, six months later, we might finally have a candidate for that application: AI Agents, or in a more generalized and advanced form, Agentic AI (these two are not exactly the same).


Agentic AI refers to systems capable of autonomous decision-making and goal-oriented actions. Unlike current generative AI models, which mostly respond to inputs, Agentic AI goes further. It proactively initiates conversations, plans tasks, and adapts its behavior to achieve objectives without needing constant human input.


The game-changing element here is the word “action.” Current generative AI excels at creating content or providing insights, but it lacks the ability to initiate and execute actions autonomously. Adding this capability would dramatically expand AI’s economic potential.


Both researchers and AI analysts are now heavily focused on Agentic AI. Gartner, one of the most respected firms for predicting technological trends, has even ranked Agentic AI as the number one technology trend in its Top 10 Strategic Technology Trends for 2025.


This highlights the growing consensus that Agentic AI is poised to become a transformative force. For more details on Agentic AI, you can refer to a blog post by NVIDIA


To me, the emergence of Agentic AI represents the next phase in the AI narrative. It’s the missing piece that could unlock unprecedented economic value, potentially sparking the kind of frenzy that transforms a trend into a bubble. Whether this shift comes from a major tech player or an unknown innovator remains to be seen, but one thing is certain: the catalyst for a genuine AI bubble is on the horizon.


ServiceNow(NOW) could certainly benefit from the Agentic AI trend, but it already experienced a significant rise last year, making its current valuation a bit stretched. Another company that might capitalize on this trend is UiPath (PATH). If UiPath can recover from the aftermath of the COVID-era bubble, this could be its chance to shine. However, I wouldn’t consider investing until we see some serious and convincing price action on this beaten stock.


The ultimate company for this trend, at least for now, seems to be Scale AI, a Silicon Valley unicorn backed by legendary investors (Peter Thiel, Amazon, Meta). While it’s still in the private market, an IPO could be on the horizon if the AI bubble gains momentum.


Google is another strong contender. With DeepMind’s advancements in reinforcement learning, Google is well-positioned to play a major role in Agentic AI. Despite inventing the Transformer algorithm that led to ChatGPT, they were caught off guard by the competition. I’m confident they’ve learned from that experience and won’t repeat the same mistake. Not only is Google strong in learning algorithms—critical for Agentic AI—but their enterprise cloud offerings also give them a significant edge. These future AI systems will perform direct actions for businesses, and Google’s infrastructure is primed to support such innovations.


In Conclusion, this is more of a trend that I’ll follow closely and invest in over time, rather than an immediate investment opportunity with a clear winner. Agentic AI holds immense potential, but for now, patience and observation will guide my strategy through 2025


Energy

Energy markets, including oil and natural gas, are currently trading well below their 2022 peaks, leaving many energy stocks beaten down. Some of these stocks now offer attractive dividends, presenting potential opportunities for income-focused investors. Oil was widely expected to boom following Donald Trump's election, but that hasn’t materialized so far. However, the new administration’s policies could reignite this trade.


AI also places a significant demand on energy resources. This demand has grown so much that major tech entrepreneurs, like Eric Schmidt, have approached the White House to emphasize the importance of energy supply in AI and how the U.S. should strengthen its relationship with Canada, given its vast hydropower resources. Unfortunately, this message didn’t seem to resonate with the Trump administration, which has proposed a 25% tariff—though that’s another story.


Clean Energy for AI

When it comes to clean energy tailored for AI, Talen Energy Corp stands out as a potential winner. The company already supplies clean energy to AI data centers, positioning it well within this trend. However, its stock has already seen a significant rise, which may limit immediate upside potential.


The Uranium Play

Uranium stocks find themselves in a similar situation. While many have already rallied, the resource remains incredibly scarce at a time when plans for new nuclear reactors—particularly small modular reactors—are at their highest level in decades. This scarcity, combined with increasing demand for nuclear energy as a cleaner alternative, suggests the uranium trend could continue well into 2025.


Related to uranium and clean energy for AI, one of the most intriguing trends is the rise of Small Modular Reactors (SMRs). Building new nuclear power plants is notoriously expensive, politically contentious, and time-consuming. For instance, Microsoft signed a deal this fall to reopen the Three Mile Island facility, but it will likely take 5–10 years before energy from that initiative becomes available. As a result, such large-scale projects aren’t likely to address AI’s immediate energy demands.This is where SMRs come into play. Their smaller size, lower cost, and faster deployment timeline make them a more practical solution for meeting pressing energy needs. Among the speculative yet promising plays in this field is NuScale Power Corporation (SMR), which focuses exclusively on developing SMR technology. While NuScale represents a high-risk, high-reward investment, a safer approach to this trend might be through BWX Technologies (BWXT). SMRs are just one segment of BWX’s broader business, which provides more stability while still allowing exposure to the SMR trend.


Broadening Market

It’s well known that the stock market is currently more concentrated than at any other time in recent history. While there are fundamental reasons for this concentration, there are also less favorable factors at play, such as the rise of passive ETF investing. After the brutal year of 2022, many anticipated a broader market recovery in 2023 and then in 2024, but that never truly materialized—aside from brief glimpses, such as in November and December 2023.

With two years of poor market breadth now behind us and interest rates finally trending downward, we may finally be on the cusp of a bull market that broadens out. If this happens, potential beneficiaries could include:


  • Invesco S&P 500 Equal Weight ETF (RSP)

  • iShares Russell 2000 ETF (IWM)

  • Industrial Select Sector SPDR Fund (XLI)

  • Vanguard Value ETF (VTV)


Additionally, relatively beaten-down value stocks—or those that have spent a year or two moving sideways—could also benefit. Examples include:


  • McDonald's (MCD)

  • PepsiCo (PEP)

  • Hershey’s (HSY)


On a more personal note, I couldn’t resist initiating a small position in Take-Two Interactive (TTWO) last summer. With Grand Theft Auto VI slated for release next fall, I see significant potential. The last installment, released 12 years ago, remains one of the most-played games ever, and the launch of GTA VI is likely to set new records and brings considerable positive earning bump.


Quantum Computing (But Beware)

I mentioned Gartner earlier, and if you’re not familiar with this firm, it’s worth exploring. If someone secretly discovered how to build a real time-traveling (and flying) DeLorean, I’d bet it’s them. I’ve been collecting their reports since 2003, and they’ve consistently been right in their predictions. One of their most notable contributions is the creation of the Gartner Hype Cycle, a framework that visually represents the typical phases of technology adoption.


This curve outlines the progression of a technology from the innovation trigger, through the peak of inflated expectations, down into the trough of disillusionment, and eventually rising into the slope of enlightenment and the plateau of productivity. It’s a valuable tool for understanding where a technology currently stands in its adoption lifecycle.


I’m confident that anyone familiar with the history of the web will find it easy to map its evolution onto the Gartner Hype Cycle. In this framework, 1995 marks the "technology trigger." By 2000, the web had reached the peak of inflated expectations. The trough of disillusionment came in 2003, followed by the slope of enlightenment, which extended from 2004 to 2012. Since 2012, the web has entered its plateau of productivity.


If you understand this progression, you don’t need to buy the 2025 Gartner report to know where quantum computing currently sits—likely somewhere in between the technology trigger and the peak of inflated expectations. This is the same point where the 3D printing frenzy peaked in 2013, the cannabis bubble popped in 2018, and virtual reality faced its reckoning in 2017–2018.


Quantum computing is far from reaching the plateau of productivity, and investing in its stocks now feels more like gambling than strategic investing. Even today’s leaders might not survive long enough to see this field’s maturity. That said, it would be dishonest to ignore that some people will likely make fortunes riding the hype. As with any bubble, those onboard who jump off the train early can secure significant profits.


Currently, clear leaders in the quantum computing space include Rigetti (RGTI) and IonQ (IONQ). IonQ is the only company selling quantum computing products to large data centers, and analysts often draw comparisons between Rigetti and Nvidia in their respective fields. However, neither company is profitable nor has plans to become so in the near future.


A safer way to gain exposure to this trend is through Google (GOOGL). Early in December, Google reminded everyone of its leadership potential in the field with the launch of its new Willow quantum computing chip. This chip doesn’t increase the number of qubits but instead focuses on the efficiency of error correction—a critical aspect of quantum computing. Google's advancements demonstrated that error correction can scale effectively with the number of qubits, a significant milestone for the industry.


While Google offers a promising overlap between the quantum computing and Agentic AI trends, I’m personally passing on quantum computing as an investment for now. We are still too far from practical applications, although the field is progressing faster than scientists initially anticipated.


On a personal note, my university even has a quantum computer installed just above my office. The noise from the cooling system’s installation forced me to work from home for an entire summer. Trust me, we’re still a long way from having quantum laptops!


Dividend Play on Margin Spread

This investing idea comes from a highly skilled investor in my family investing group. This individual is a fiscalist, which might explain their unique perspective on this trade. With recent interest rate cuts, the Interactive Brokers margin rate in USD has fallen to around 5%, and for CAD currency, it’s now approximately 3.3%. At the same time, many energy stocks are offering dividends in the 7–9% range, with prices that remain relatively stable despite being beaten down. This creates a potential margin spread opportunity, on relatively stable stocks that have growth potential.


However, it’s important to remember that whenever margin is involved, it’s not a zero-risk game. That said, there are ways to play this strategy with calculated risk to maximize returns while minimizing potential downsides.


Art and Collectibles as an Investment

This idea ventures outside the stock market but is worth considering. I believe 2025 could mark the beginning of a comeback for art and collectibles. Art is a fascinating investment category, with certain segments—such as contemporary art—showing historical returns that rival the S&P 500, at an average of 7.4%. Contrary to popular belief, art can also be a highly liquid asset, particularly when factoring in tax benefits and price spreads between auctions and galleries.


Here’s how it works: Imagine buying an original lithograph or painting by your favorite artist in an online auction for $10,000. If you’ve done your research right and bought at a descent price, the framed version of this artwork in a gallery could sell for about double that price. After a few years, you might need funds for another project. You could have the artwork appraised by a gallery specializing in the same artist, where it might now be valued at $25,000, assuming the artist’s popularity has grown (which is often the case if you’ve chosen wisely).


At this point, you have two options:

  1. Donate the artwork to a museum or a similar institution. In Canada, for instance, you can receive a tax return equivalent to 53% of the donation’s value based on the gallery appraisal.

  2. Sell the artwork through an auction, which has become more accessible thanks to online platforms.


After the COVID-era surge fueled by excess liquidity, art and collectibles have experienced three years of stagnation or decline. However, recent developments suggest this could change. In Canada, for example, where rate cuts have been more aggressive and began earlier than in the U.S., I’ve observed several art prices trending upward since September.If you decide to go this route, make sure to do your own research carefully. There are non-intuitive pitfalls to watch out for. For example, Salvador Dalí’s hand-signed lithographs—despite being associated with one of the most recognizable names in art—are unlikely to command significant value or see substantial price appreciation. The reason lies in Dalí’s peculiar habit of signing countless blank sheets almost every morning, which he then sold to publishers. As a result, the volume of hand-signed original lithographs by Dalí is incredibly high compared to other artists, limiting their scarcity and value.



WealthUmbrella Objectives for 2025

In 2024, WealthUmbrella had the incredible fortune of welcoming Zackary Stephenson to the team. As I mentioned when he joined, Zackary is one of the most talented engineers and scientists I’ve met—not just during my time as a professor, but also as the founder of a sizable robotics company. While his contributions might not yet be fully visible, most of his research has been focused on our upcoming retail momentum screener, set to launch this year.


In addition, Zackary played a pivotal role in building our new data hub. I’m thrilled with this release, as I rely on it constantly in my own workflow, and I believe our users will come to do the same. That said, the hub is still a work in progress, and we have a roadmap of bug fixes and feature upgrades planned. For example, one of our priorities is extending the data history to five years. We’re targeting January 31 for the release of this enhanced version.


After that milestone, Zackary and I will shift our focus entirely to completing our advanced offering. As we approach the final stages of that project, I’ll provide a more detailed update on the new components it will include. In a December blog post, we mentioned a tentative launch date of late February for this product, but I now believe May 1 is a more realistic target. The data hub required more time than we anticipated, and we still have tasks to finalize around it.


Adding to this, Zackary very recently welcomed a new baby—exactly one year after his first! Two babies within a year is a lot to handle, and while he continues to contribute, he’ll be working at a slower pace over the next few weeks to support his wife, who undoubtedly has her hands full with all those diapers.


Other priorities on our to-do list for 2025 include:

  • Allocation Strategies: While I’m comfortable with our current signals, I believe we can improve by building and backtesting more advanced allocation strategies. This isn’t something I plan to postpone until May. I already have someone in mind for this project—an individual with exceptional expertise in the field. If he accept, I’ll collaborate with him to pursue this objective.


  • Risk Index and Hedge Fusion (or Clear Separation): This has been on my to-do list since last summer. I want to find the optimal way to integrate or distinguish these two signals. Although they were designed for different purposes—the hedge signal flags significant drops, while the risk index handles all bumps along the way—having both still raises some important questions:

    • Can integrating them into a unified signal yield better results?

    • How can we best use these signals to maximize their potential in a portfolio?

    • What does it mean for the market when both signals trigger simultaneously?


  • Investigating the Connection Between Margin Signal and Risk Index: In one of my blogs last summer, I noted how, despite not sharing the same dataset, the margin signal and the risk index often complement each other remarkably well. Exploring this connection further could reveal actionable insights for refining our tools.


    Seeing such an antagonistic relationship between the margin signal and the risk index, despite having nothing in common, is an incredible opportunity. It somehow validates the efficiency of these two signals but warrants further exploration. The margin signal incorporates six models, while the risk index includes three. There’s a strong chance that combining these nine models could result in a highly effective universal trend indicator. This is something I plan to work on after the release of our advanced offering in May. Until then, I suggest manually tracking both indicators alongside market trends.


  • Upcoming Webinar

    Follow a recurrent comment we got, we are hosting a webinar in January to walk through our new data hub, detailing each of our signals. Given the breadth of material, it might take more than one webinar to cover everything. Additionally, we plan to start weekly or bi-weekly videos discussing technical insights we believe are relevant to understanding the market more effectively.


  • Altcoins

    Many have asked whether we could extend our BTC approach to other cryptocurrencies. From my perspective, this is a challenging task, as most altcoins lack the same depth of historical data. A traditional data science approach is unlikely to succeed with such limited data. However, I’m not ignoring these requests and do have an idea in mind.


    One of my former PhD students, who introduced me to crypto years ago, could be a key asset here. He was one of the best students I’ve ever worked with—exceptionally curious and capable, with an uncanny ability to absorb knowledge. Currently a researcher at EPFL in Switzerland, he actively analyzes nearly every new crypto project, and his insights are consistently invaluable. I’ve scheduled a meeting for January to explore how he might collaborate with us. I’ll keep you updated.


Gratitude and Updates

That covers most of what’s currently on my mind for WealthUmbrella in 2025, though I’m sure new priorities will arise along the way. A few additional updates:

  • Jennifer Kwiatkowski: WU co-founder, Jennifer, has completed her PhD thesis. She made significant contributions, particularly in designing our BTC indicators, and her thesis is also outstanding. While many companies (including us!) and universities pursued her, she chose to forge her own path, launching a startup in robotics. Her new company is now part of the highly selective TandemLaunch incubator, and I have no doubt she’ll succeed. I wish her the best of luck and am deeply grateful for the incredible work she contributed. The Kwiatkowski Indicator was one of our most critical signals, enabling us to buy the dip in November 2022, and it remains a guiding light for me in the current bull run. Whenever I see people calling for a cyclical peak during an uptrend, the Kwiatkowski Indicator (along with others) provides an objective perspective that helps us determine where we truly stand in the cycle.


    Interestingly, we named this indicator after her as a joke. If you knew Jennifer, you’d understand—she’s one of the most humble, kind, and approachable people I’ve had the privilege of working with. While developing our BTC tools, we often laughed at how many indicators are named after their creators (Exemple: Puell Multiple named by David Puell in Cathie Wood team). I joked with Jennifer that her last name sounded much more scientific than mine and suggested we name the indicator she was building after her. The name stuck, and today, it’s an integral part of our toolkit.


  • Michel Villa: After almost a year of valuable contributions, Michel Villa will be taking a break in 2025. He’s preparing to launch his second book and begin writing a third, leaving him with little time to continue his "Market Munchies" pieces. Although brief, his articles were always insightful and timely. His best call this year was in May when he predicted a spike in volatility starting in August. As if on cue, the market reacted on August 5th! While we’ll miss his contributions, we hope to see him back in 2026. Thank you, Michel, for your thoughtful and impactful work. Best of luck with your books!


Conclusion

WealthUmbrella experienced tremendous growth in membership during 2024, which enabled us to hire a new quant analyst. With it help, we successfully launched our new Data Hub, bringing WU closer to the vision I had when starting this project in 2021. This marks an important stepping stone toward our goal of making data more accessible and understandable, ultimately benefiting investors. While I acknowledge there’s still work to be done on the “understanding” aspect, that’s precisely why we’re starting webinars this year.


I’ve also outlined several new projects that I believe will lead to an even better version of WealthUmbrella by December 31, 2025. I’m excited about the coming year, not just because of these developments and the improvements they’ll bring to our tools, but also because I anticipate a more volatile market environment—one where WU can truly thrive. If you examine the history of our signals, you’ll notice that WU performs only slightly better than the market during exceptionally strong years. However, we truly excel during challenging periods. Years like 2022 showcased this strength, as did other difficult periods like 2018, 2020, and 2007–2009 but on an backtested perspective only . If 2025 proves to be a rougher year, I believe we’ll be ready. It’s been a year and a half since I’ve shorted the market, but I may soon renew that strategy if conditions call for it. Until then, I hope the bull market continues to bring rewards for all of us.

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15 comentarios


Incvinny1212
7 days ago

Would be cool to get an update since market seems to be right on the fence now! We are still holding a pretty sizable long position while the 3 main indicators (Margin risk, Hedge signal and Risk index - Option model never turned positive on TradingView) are bearish. Are we arguing with the stock market at this point?

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Incvinny1212
6 days ago
Contestando a

Risk index is at 2 on TradingView.. because the Option model did not turned green on January 7 like it did on the Dashboard.. this is what I meant!

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kernel32
kernel32
08 ene

Regarding the risk index, which one should we rely on: the WU Dashboard or the TradingView script? Currently, the WU Dashboard shows 1, while the TradingView script displays 2.

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Ashah
07 ene

Great article. Thank you for all details across the market/BTC and also providing the insights for 2025. I did sold some BTC in $100,000 range and now seeing $176K, I'm feeling FOMO. is it ok to buy around 90k if it comes to that level again?

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Thanks a lot! Indeed yes take a deeper look in the margin signal, I was able to save myself from 3 big dips this year just by selling when it was red and above 11-12 ish...Im sure this can help to better time our sell signals.

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Contestando a

any idea how/why the margin signal remained flat (0) during the yen carry trade in early August? The Risk index on the other hand shot up to 5 and the VIX spiked to near all time highs. Just trying to understand the meanings and interelationships...

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Ben
Ben
04 ene

This is a bit overwhelming. Since I joined the WU nearly two years ago I had the feeling that there’s something really special brewing here, and it feels now like this could be a real significant tool to manage risk. On top of this, the WU got an attitude I rarely see of generosity and transparency. This place feels real special. I’d like to thank the whole team for your meaningful great work.


I wonder, Vincent, if you can calculate or share the returns of S&P Umbrella portfolio for 2024 so one could get better clue of how good this year has been. The combination of very good rate of successful trades with the use of leverage ETF can be…


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Christine
06 ene
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I think it would also be worth calculating the returns WU would have got if it followed the hedge signal perfectly as there were many times last year where WU choose to wait before taking action or took partial action (1/3 at a time). Not trying to criticize, but I think it would be an interesting exercise.

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