Another 48h - The Bears Won The First Week Of Battle

2025/02/23 - 8th Calendar Week 2025
Another 48h - The Bears Won The First Week Of Battle
“all annual highs of 2023, 2024 and/or 2025 have been broken!
what does that mean? bearish? how deep? when bullish again?”

Warren Buffet sent a cautionary message to Washington, lamenting how capitalism "has its faults and abuses--in certain respects more egregious now than ever," with malfeasance by "scoundrels and promoters" in full force. He urged lawmakers to help preserve a stable U.S. dollar, saying "fiscal folly" can destroy the value of paper money and the country has at times "come close to the edge." Buffett said the long-term success of Berkshire and the American economy, which he called the "American miracle," has depended on people's ability to participate. That, he said, is something Uncle Sam can encourage, or take away. "Take care of the many who, for no fault of their own, get the short straws in life. They deserve better," Buffett wrote, addressing the government. "And never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part," he added. Cathy Seifert, an analyst at CFRA Research who rates Berkshire "hold," said: "Talking about the business of America being messy was his way of addressing the political landscape and its impact on the macroeconomic environment. He is warning Washington: Be careful where you tread." Warren Buffett has been increasing the cash reserves of his Berkshire Hathaway group for ten quarters in a row. At the end of December 2024, stocks stood at $334 billion – a new record. The star investor therefore defended his strategy eloquently on Saturday: “Even though some commentators are currently pointing to an exceptionally high cash position at Berkshire, the vast majority of your money remains invested in stocks. This preference will not change,” Buffett emphasized in his widely-noticed letter to investors on Saturday. “Berkshire shareholders can be confident that we will always invest a significant majority of their money in stocks.” There has long been speculation about the reason for the strong preference for cash. At the annual general meeting last May 2024, Buffett indicated that he expected higher corporate taxes and was generally comfortable parking cash holdings in short-term US government bonds at comparatively high returns - me too! Buffett doesn't mind paying taxes, as he has repeatedly emphasized in recent years. In the 60 years he has led Berkshire, the company has paid $101 billion in taxes, he wrote on Saturday. In 2024 alone he transferred $26.8 billion to Washington – “a record-breaking number.” It represents about five percent of the total taxes paid by U.S. companies last year and excludes taxes to individual U.S. states and foreign governments.

That's why the focus is on the yield curve and/or individual value shares - cash flow machines, ideally those that also pay a dividend. And who are immune to US tariff policy because it does not directly affect their business model. "The Fed members have expressed that if the US labor market continues to be near full employment, they want to see further progress in reducing inflation before further interest rate adjustments are made," my friend, a cfd online broker analyst told me, some days ago. Sure - from the Fed's perspective we are in the best of all worlds. Trump said goodbye to the New Green Deal, the previous Biden/Harris government - thus solving the cause of the past US stagflation. And now it's up to his US budget policy and or even US customs policy when it comes to the budget gap. And/Or also the foreign trade balance. That is not the FED's area of responsibility - fiscal policy and/or economic policy. It is precisely the responsibility of Trump and/or his US Republicans. Anyway, as I wrote from days and/or weeks ago, if the US tariffs get into account starting next month March 2025 and the US consumer dont get a Made In USA alternative for the goods, which will even be +...% more expensive? This could be the reason for the next US inflation wave! Because tariffs are fundamentally a useful instrument for every economy - but only if at the same time there is an internal national offer that is even better and/or cheaper for its own consumer! Otherwise the calculation doesn't add up - imports fall, the economy shrinks and/or a new wave of inflation rises if consumers don't consume less because demand will get greater than supply. But Trump and his team certainly know that too. Which is why I'm fundamentally optimistic about Trump and the DXY as well as WallStreet . But don't forget: “He has only been in office for a month! And he cannot overcome time, let alone go out of time ahead of himself - like everybody else too!”

“What is there to say? Risk taking is painful. Either you are willing to bear the pain yourself or you try to pass it on to others. Anyone who is in a risk taking business but cannot face the consequences is no good.”
George Soros

110.176 : 2025/01/13 - Annual High 2025
108.583 : 2024/12/31 - Annual High 2024
107.348 : 2023/10/03 - Annual High 2023
106.641 : 2024/02/21 - last price action
105.192 : 2024/11/06 - Trump Election Night
If I'm not mistaken, the battle for the trend reversal formation - the annual high of 2023 of 107.348 points - is in full swing. Traders and/or investors initially sent the price action below the terrain of the annual highs in 2023, 2024 & 2025. But over the course of last week there were at least 2.3 hours when the price action was traded above - at its peak up to 107.381 points. Therefore, the battle with regard to the 2023 annual high of 107.348 points is not yet decided. Even if the terrain above the 2024 annual high of 108.583 points from 31st December 2024 and/or above the 2023 annual high was taken over by the bears, after an even higher 2025 annual high of 110,176 points was reached on January 13, 2025. Already last week before the thought came to my mind for the first time: "buy on rumors & sell on facts" - which could be true in the case of the and/or Trump's US tariffs. Because both on the day Trump took office, on Monday two weeks ago, and/or last Monday also, when Trump announced US tariffs in public for the first time, the price action of the fell during both days - including volatile intraday highs. So it wouldn't surprise me if we even fell back to 105,441 points in the upcoming days and/or weeks - the intraday high of November 6th, 2024. The day Trump won the US elections for the second time. Precisely because of the “buy on rumor & sell on facts” hypothesis! isn't it?

With best wishes
and good intentions:
Aaron

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