Rate Cut + $40B/Month: Is the Next Move a Rally—or a Rotation?

December 14, 2025 - Update

MACRO

We got a rate cut from the Fed, and it’s very likely we won’t see other changes until next spring. What will matter most is the labor market, GDP, and inflation data.

If you’ve been following me, you know what I monitor most closely: credit availability. Can companies borrow or refinance? Is it getting easier or harder?

My first go-to metrics are money supply and credit conditions. Both look fine right now. They are stable or improving.

Recent M2 data is not available yet. Net liquidity is improving, as shown in the chart below.

The rate cut supports that trend. The Fed also announced a program to purchase $40 billion of Treasury bills per month, starting immediately. That means an extra $40 billion of liquidity entering the system each month.

GDP growth is around 2%. That keeps the economy moving at a pace that is not too cold and not too hot.

So I’m sticking with my take: the overall macro environment remains supportive for U.S. stocks.

The main caveat is valuations. It’s not easy to find real bargains right now. That increases the odds of short-term corrections or sector rotation into areas with more upside.

INDEX

Below is the weekly chart of the S&P 500 (-0.6% for the week).

S&P 500 weekly (Stage Analysis lens)

• What stage are we in?
  Stage 2 (uptrend) — still intact.
  Price is above the rising 10/20/30/40-week moving averages, and those averages are stacked bullishly (10w > 20w > 30w > 40w).

• What the chart is “saying”
  The trend is up. We’ve had higher highs and higher lows since the spring rebound.
  Momentum cooled a bit. RSI is ~63 (not overheated), and MACD is still positive but flattening.
  This week looks like a small pullback. It reads more like a pause near highs than a trend break.

• Levels that matter:
  1st support (trend health): 10-week MA ~ 6,746. If it holds, the uptrend stays “smooth.”
  2nd support (real test): 20-week MA ~ 6,628. A weekly close below it, plus follow-through, would suggest “Stage 2 under pressure.”
  Last line (stage risk): 40-week MA ~ 6,226. Sustained weakness below a flattening or rolling 40-week MA is how Stage 2 can turn into Stage 4.

PORTFOLIOS

Paid subscribers can access all my active portfolios here:

As mentioned last week, I am closing my 10X Underpriced Growth Portfolio. I’ll be launching a monthly portfolio tied to my eBook series, using a fine-tuned strategy. More on this soon.

10X Momentum Portfolio

My buy-stop order for NU was triggered. The portfolio is now almost fully invested.

I updated my stop-loss levels.

Annualized return is ~50%. Return since inception is 198%.

10X Underpriced Growth Portfolio

I’m down to one stock. There will be no further actions until I exit the current position.

That’s all for the week. Have a great week ahead, everyone!
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Important:

this is not investment advice. Consult a licensed financial advisor before making any investment decision.