I remain bullish on 2024. My 2024 Annual Forecast released on December 21, 2023 is on track, yet the market has already achieved (and
slightly surpassed) my Base Case Scenario of average election year gains of 8-15%.
While my Best Case Scenario of 15-25% is likely now in play with the market
running well above any of the historical seasonal patterns I can concoct, the
market may be due for a little reversion to the mean.
The charts here illustrate the three most relevant seasonal patterns: All Election Years, election years with a Sitting President Running for reelection and my STA Aggregate Cycle, which is a combo of all years, election years and the 4th year of the decade (years ending in 4). The Midyear Rally I discussed early this week is still in play. But after that around mid-July, I would not be surprised if the market were to pull back toward the mean a bit, maybe 5-8%.
There is plenty on the near-term horizon to spook traders from election campaign and political missteps, to Fedspeak, economic data disappointments and just plain old Summer Doldrums.
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