Market Whiplash & Other Recurring Tragedies
INTERNAL MEMO: RE: Market Whiplash & Other Recurring Tragedies
TO: Everyone Who Paid Attention Last Week
FROM: Your Friendly Neighborhood Oracle
DATE: November 24, 2025, 11:47 PM (after three espressos)
RE: Why Your Portfolio Is Experiencing Severe Emotional Whiplash
Listen. On Wednesday, the Fed was definitely not cutting rates in December. The CME FedWatch tool had it at 30%—basically the kind of odds you don't bet your house on. JPMorgan sent clients a memo. Polite institutional investors nodded. The S&P 500 dropped like a sack of disappointed venture capitalists.
Then John Williams woke up on Friday morning, drank coffee, and decided to rewrite the entire script.
By Monday, the December cut probability had rocketed to 75.5%. Futures were pricing it in. Treasuries rallied. The tech-heavy Nasdaq 100 jumped its best day since May. The S&P 500 surged 1.55% to 6,705.12. Alphabet gained 6.3% after announcing Gemini 3. Broadcom surged over 11%. Everyone who sold on Thursday was now eating their lunch backwards.
This is fine. Completely normal market function.
The Theater of Zero Visibility
Here's what actually happened: A single Fed official—even a pretty important one—said something dovish, and 45 percentage points of probability evaporated in the span of a news cycle. Overnight. No new economic data. No actual Fed decision. Just words. Just vibes. Just the magnetic pull of relief across a market that has been itching for permission to believe the good times never really ended.
The unemployment rate is ticking up (it hit 4.4%). Job growth is a thriller with an unpredictable plot—September posted 119,000 additions, up from negative August revisions—but November data doesn't exist yet because the government couldn't keep its lights on. So traders are literally pricing December policy based on September vibes and Fed officialspeak.
Inflation is still above the Fed's 2% target at 3%, and Williams himself acknowledged tariffs are "contributing a half percentage point to three-quarters of a percentage point to inflation". But sure, let's cut rates. Confidence is a hell of a drug.
Where the Real Reckoning Lives
While the equity boys were having their Monday rally, someone should have been paying attention to what was actually selling: Crypto got absolutely destroyed.
Bitcoin fell to $86,884.76, down 1% on Monday alone. That's the tail end of a brutal month where Bitcoin has fallen more than 20% from its recent high above $125,000. Ethereum tanked 36% from its 2025 peak, sliding below $3,200. Over $617 million worth of crypto positions were liquidated in just 24 hours on November 16 alone.
This wasn't casual profit-taking. This was systemic deleveraging. More than $240 million of those liquidations came from long Bitcoin positions and another $169 million from long Ethereum trades—forced exits, margin calls, the kind of moves that happen when the leverage pyramid crumbles.
But here's the thing nobody wants to say out loud: Crypto is the honest market. When equities need a Fed official's permission slip to rally, crypto just straight-up collapses when conviction cracks. The crypto fear and greed index crashed into "extreme fear". Retail didn't flinch. Retail got obliterated.
The Defense Contraction Nobody's Talking About
While the market was gorging on AI enthusiasm and rate-cut optimism, there was a very different story unfolding in the defense sector. Lockheed Martin slipped again, down roughly 2.1% on Monday despite a broad market rally, marking four straight down days. The company raised its full-year guidance. Raised its dividend for the 23rd consecutive year. Expanded its backlog. And the stock went... down. On a day when the S&P 500 ripped higher.
Lockheed Martin is one of the most defensive, dividend-heavy names in the market. It shouldn't underperform the broad market while announcing higher earnings. That it did signals something uncomfortable: the repricing of high-multiple growth into higher multiples isn't universal. It's selective. It's a narrow rescue operation, not a broad-based risk-on shift.
Then there's Costco, trading around $886 per share, down from its 52-week high near $1,078. Analysts still rate it a "Buy," but Weik Capital Management reduced its holdings according to a November 24 filing. The company's business is firing on all cylinders. The stock is quietly getting redistributed by institutions. Valuation, apparently, still matters. Who knew?
The Energy Sector's Slow Disappearing Act
Oil prices are collapsing into irrelevance. WTI crude is hovering around $58.50–$60 per barrel, and forecasters are calling for Brent to average only $54 in Q1 2026. OPEC+ is unwinding production cuts like they're trying to make a point.
Chevron is basically flat despite Venezuela turning to the company for feedstock supplies. A geopolitical win. A strategic victory. And yet: nothing. The stock can't rally because crude is a structural bear market and nobody wants to catch that knife.
This is what rotations look like when they're real. Not everything goes up together. Some things get left behind. And Monday's "everything rally" conveniently ignored the fact that some sectors are starting their own separate bear market while Tech 7 is doing laps around the trophy.
The Only Question That Matters
When the December FOMC meeting actually happens on December 9-10, Jerome Powell has to choose between:
Option A: Cut rates and validate that the soft-landing crowd was right all along. Cheaper money, higher equities, happy traders, angry bond vigilantes.
Option B: Hold steady and say inflation isn't beaten yet. The market immediately reprices to "no cuts," and Monday's rally gets unwound by Thursday.
There's no middle ground here. One Fed official's speech shouldn't move the dial 45 points on the cut probability. The fact that it did tells you everything: consensus is paper-thin, and conviction is trading by soundbite.
Welcome to November 2025. Where the market trades on hope and crypto traders learn about margin calls firsthand. Where defensive stocks can raise guidance and still get sold, where energy is a death sector, and where a single speech can erase an entire week of selling.
Buckle in. December's going to be something.