2024 Technical Outlook: Broad-based rally back to new all-time highs likely in 2024

REMINDER: My 2024 Technical Outlook is today (12/14) at 2:00 PM Est. Please Register HERE.

Additionally, please find my Outlook Deck attached HERE.

CONCLUSIONS - 2024 Is a Bull Year; SPX target 5,175

  • It’s likely that 2024 could prove “easier” for investors than either 2022 or 2023; A broad-based rally is possible from Spring 2024 into Spring 2025 given the prospects of Treasury yields and US Dollar falling.
  • Emerging markets are likely to make a comeback in 2024. Most of Europe remains a laggard to US stock indices while India is a standout outperformer. China is thought to finally begin a much-needed rally after dramatic underperformance, but areas like India, Mexico are more technically attractive choices.
  • US stocks likely will follow-through on the rebuilding efforts of broad-based sector strength to recover the damage suffered from July-October 2023. While Technology has disguised some of the weakness in other groups, it’s thought that Industrials and Energy should both join Technology to lead in 2024.
  • While both Yields and US Dollar might pull back into Summer/Fall 2024, it’s likely that both will resume their uptrends back to highs sometime in late 2024 into 2025. It’s expected that any bounce in yields into January/February of 2024 should prove temporary ahead of a larger 2024 drop.
  • Small-caps are likely to outperform in 2024 as US Treasury yields begin a larger decline in 2024. This should also be supportive for sectors like Technology to outperform. However, Small-caps might not have more than 9-12 months of a window before Large-Caps regain control.
  • Growth is preferred over Value for 2024; However, Value has begun to emerge since October in Small cap and Mid-cap with the prospects of Yields turning down in a larger fashion in 2024, particularly Small cap Growth. Heading into 2024, Value is outperforming short-term but should prove temporary.
  • Commodities are thought to snap back and rally in 2024 with particular strength out of Crude Oil from January/February into September 2024 along with precious and Base metals.
  • Election-year seasonality should prove bullish for markets, and despite normal election year cycles proving to be less robust than pre-election year cycles, 2024 should prove bullish for investors.
  • Sentiment has improved into December but optimism is largely more individual investor related than institutional; Sentiment heading into year-end is much less bullish than 2021, or 2017. Any Q1 weakness should create an excellent risk/reward opportunity for risk assets for 2024.
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