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Zoom Out, Zoom In
Right now our house view on markets is, up for 2024, but weakness in Q1. And that's for no other reason than if you don't need equity markets to be up in Q1 - and most market bigs don't, because only small bigs get fired on quarterly reviews, it's the year-end performance that really matters - then why wouldn't the market ease off some in this early-doors period of the year? Spook the 2023 late buyers into throwing in the towel, ramp the Vix and the 10-year yield, recruit a loud army of recessionistas - it's a well-rehearsed playbook and it works. The opportunity being to buy stocks lower later in the quarter.
All our equity index charts towards the end of last year and so far this year point to local tops in the current vicinity. Personally my approach here is to look for gains on the short hedge side but I am nervous of holding onto those short hedges for too long, because I expect the annual up-trend to resume at some point. Looking across the indices, very roughly I believe the S&P is likely to correct some, the Nasdaq may surprise to the upside for a little while before a correction, the Dow is ready to roll over and the Russell I think will continue its slide for a little while. My personal positioning in 3x index ETFs reflects those beliefs, and the beliefs arise from the charts below. October to December was easy; this period is tricky and real-time price action has to be respected. Narrative, as always, is to be ignored, presuming misdirect.
Short Term Trading Opportunities
The type of volatility now presenting itself (in Q4 2023 there was no volatility, it was only-up!) can be fertile ground for swing trade opportunities, by which I mean relatively short-term holds measured in days, maybe weeks, on the long and short side alike. I'm delighted to see our three trading services running on our Cestrian Stocks Symposium continue to do so well; each is growing subscribers every day and each is starting to chalk up the wins too. These are all low-cost services that may be to your liking. You can read more here.
Ye Olde Charte Mill
For paying members we now run through our usual charts covering the main US equity indices, associated leveraged ETFs, plus the SOXL TECL and FNGU ETFs as always.
Note - to open full-page versions of these charts, just click on the chart headings, which are hyperlinks.