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Defense and Dips: Positioning for the Fed Pivot · The SPY Trader

• 0:00
  Welcome back to Spy Trader , the podcast designed to help you navigate the wildest waves of the US stock market .
• 0:07
  I'm your host , Barry Bullish , and if you're tuning in early , you're not alone .
• 0:12
  It's 5 am on Wednesday , November 26th , 2025 , Pacific time , and we've got a lot to cover , primarily how to trade a market that's both pulling back and gearing up for a major rally .
• 0:24
  The US stock market is currently walking a tightrope .
• 0:28
  After a phenomenal run , we saw the S&P 500 recently pull back about 2% last week , though it rallied a bit on news yesterday regarding ratecut hopes .
• 0:39
  The Nasdaq Composite , heavily concentrated in tech , has been under heavier pressure , down about 5% in November .
• 0:47
  This softness , however , is being contrasted by some very strong underlying fundamentals .
• 0:54
  In the third quarter earnings season , a massive 82% of S&P 500 companies beat analyst estimates .
• 1:03
  This corporate strength , combined with the market now pricing in an 85% possibility of a Federal Reserve rate cut in December , means we have powerful upward catalysts fighting against shortterm valuation concerns and profittaking .
• 1:18
  Let’s talk sectors , because this is where the market is telling us a fascinating story .
• 1:24
  While Tech ( XLK ) has led the year , it’s lagging sharply in November , experiencing profittaking and rotation .
• 1:31
  Where is the money going ?
• 1:32
  It's shifting into defensive areas .
• 1:35
  Health Care ( XLV ) and Consumer Staples ( XLP ) have been the top performers this month , signaling that investors are seeking stability .
• 1:44
  Consumers are worried — US Consumer Confidence just fell to its lowest level since April due to inflation — and investors are acting defensively , even while hoping for a Fed pivot .
• 1:56
  We see this tension clearly in the tech giants .
• 1:59
  NVIDIA ( NVDA ) reported very strong earnings , yet the stock declined .
• 2:04
  This isn't a failure of fundamentals ; it's the market reassessing extremely high expectations .
• 2:10
  Yet , the longterm AI narrative persists .
• 2:14
  We saw specific AIdriven tailwinds for names like Meta Platforms ( META ) and Alphabet ( GOOGL ) , which rose on news that Meta is considering using Google's AI chips .
• 2:26
  This confirms that while the correction is real , the AI story is far from over .
• 2:31
  The macro picture is dominated by the anticipated Federal Reserve pivot .
• 2:36
  With the labor market cooling and core PPI moderating , the narrative that the Fed will cut rates soon is the single biggest bullish catalyst .
• 2:45
  Falling yields , with the 10year Treasury around 4.0% to 4.20% , make growth stocks much more attractive .
• 2:53
  How should Spy Traders position themselves right now ?
• 2:57
  We recommend a threepronged approach : selective buying of quality growth , maintaining defensive balance , and establishing core fixed income .
• 3:06
  First , Buy the Dip in HighQuality Growth .
• 3:09
  The current pullback gives us better entry points into companies with unshakeable AI leadership .
• 3:14
  We recommend looking at Alphabet ( GOOGL ) .
• 3:18
  It's less volatile than pure hardware plays and is a key beneficiary of the AI cycle , as evidenced by the recent Meta news .
• 3:27
  For broader exposure to the temporary tech correction , consider the Invesco QQQ Trust ( QQQ).Second , Increase Defensive Weighting .
• 3:36
  Use defensive sectors to buffer against consumer uncertainty .
• 3:40
  Since Health Care has been the top performer recently , consider the Health Care Select Sector SPDR Fund ( XLV ) .
• 3:47
  Within this sector , a company like Eli Lilly ( LLY ) provides noncyclical , highgrowth exposure based on pharmaceutical breakthroughs .
• 3:57
  Third , Build Core Fixed Income .
• 4:00
  If the Fed cuts rates in December as expected , bond prices will rise .
• 4:05
  To capitalize on this anticipated bond rally and add stability , look at core bond ETFs like the Vanguard Total Bond Market ETF ( BND ) or the iShares Core U.S.
• 4:16
  Aggregate Bond ETF ( AGG).These instruments offer lowcost , liquid ways to benefit from the shifting interest rate environment .
• 4:24
  That’s all the time we have for this edition of Spy Trader .
• 4:29
  Stay disciplined , stay tactical , and remember : in this market , balance is your best defense .
• 4:35
  I’m Barry Bullish , and I’ll catch you on the next trade .