New year… same God – the Lord Jesus. Hallelujah for that! Many investors are concerned about what 2024 may have in store for them. Others have thrown caution to the wind and are chanting, “don’t fight the fed!’ To say that a lot is at stake this year would be an understatement.
Let’s take a quick inventory of recent developments/moves/responses to see if we can glean anything.
Wall Street believes that the Fed is done with rate hikes and that many cuts (up to 6!?!?) may be on the way in ’24. While the Fed may indeed pause for a bit, and perhaps even begin to cut later in the year, it seems unlikely for that many cuts to happen… unless an awful recession or another “plandemic” were to immediately occur.
Ships are reportedly being attacked in the Middle East and oil shipments are supposedly being disrupted. We would suggest watching what the money does versus what the news says. If this were really a threat, the price of oil would be skyrocketing and staying up. (Note: It is nearing 7 month lows!) Why? Maybe recession is looming and causing lower demand, or maybe there’s an undertow of increased supply to “get out while the getting is good.” Either way, “if it doesn’t do what it’s supposed to do, it ain’t gonna!”
Health care stocks, especially certain bio-techs, have been performing well already in ’24. In past market cycles, health care stocks have often taken the leadership baton when a defensive economic backdrop existed, but not in every case. Maybe there is a rotation happening- sell the “Mag 7” and buy “the 8 that make you feel great?” We are going to monitor this one’s pulse.
Our Current Market Outlook has been upgraded to “Market in an Uptrend” with a green light as of today’s open (SPX 4,700.18). Our “Core Four” (see top of page) lights show 2 green, 1 yellow and 1 red with a VIX under it’s 50-day mav. The rally in growth stocks and the general stock market indexes has cooled in the past 2 weeks and has so far successfully held its current test of support at the 21-day mav’s. This green signal may not last for long as investor sentiment is still high. In the event that the market undercuts Friday’s low (and the 21 mav) our signal would immediately move back to yellow.
Back in December we wrote, “Have you noticed that the economy is slowing while the stock market is climbing? One will likely break rank and join the other after the calendar turns. This type of bifurcation often leads to a period of consolidation. The 21-day mav’s will eventually be a source of support – no rally can fail without getting below and staying under them. There is a growing thought that many traders are waiting for the new year to take profits. If so, the first few days of January could usher in a well needed pullback- a pause to refresh? Since 2024 will be an election year, we expect to see more price volatility.” As for the first part, let’s just say we nailed it. Praise the Lord for His wisdom! Regarding the 2nd part – volatility – well, we have all year to be right on this one. 🙂
In the spirit of the nearing NFL playoffs, the stock market’s wildcard is interest rates. Can the 10-year US T-note yield get back above 4% and stay there? Don’t forget that the US Treasury Dept. is planning (better said – has to) offer enormous amounts of new debt this year. Any takers?
Finally, the VIX is near multi-year low levels – complacency alert! But the stock market’s long-term trend is still up until it is broken.
“How lovely on the mountains
Are the feet of him who brings good news,
Who announces peace
And brings good news of happiness,
Who announces salvation,
And says to Zion, “Your God reigns!”.“ Isaiah 52:7 NASB 1995 Happy New Year indeed!
Game plan: The stock market breather has come. Is it over? That remains to be seen. In the meantime as investors deploy new capital, they can use the 21-day mav of the major indexes as a line of defense and look to the 50-day mav’s to be major support going forward. Please continue praying for the peace of Jerusalem.
Note: You can learn more about The Triumphant Core Four risk management system by clicking here.
Have a Triumphant day! ®
The information in this article is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Not to be used as legal or tax advice. ©2024 Triumphant Portfolio Management, LLC.
Where Are Woodward and Bernstein When We Need Them? This article was written by Newt