State of the S&P 500 │ Tom

The S&P 500 stands as the final major index to surpass its all-time highs. The remaining horizontal line linked to price history is at 4818—the intraday all-time high recorded two years ago on January 4, 2022. Currently, the S&P 500 maintains robust health. In the chart’s lower panel is my preferred gauge of market breadth, Net New Highs. This metric reports the number of stocks reaching new highs versus those making new lows across the NYSE and Nasdaq markets. This measure of breadth has remains consistently positive during the best market rallies.

Given the prevailing positive sentiment across markets, stemming from the widespread advance since November, I speculate the likelihood of a healthy correction as the next probable move. To assess this, I will closely monitor market breadth, utilizing it as a key factor in evaluating the probabilities of whether the anticipated correction is likely to be healthy or potentially more severe.

 

 

A mere two weeks ago, the S&P 500 ETF SPY experienced its largest inflow ever. This encapsulates the current state of the S&P 500—a market teetering on the brink of all-time highs, with both retail and professional market participants joining with unwavering enthusiasm— the metaphorical “everyone is in the pool” moment.

 

 The leading observation for my initial 2024 thoughts that the market is ripe for a healthy correction is the condition of market sentiment, and equity exposure. For over a month now the CNN Fear & Greed Index has reported a market operating in greed, Extreme Greed for the last two weeks.

 

 

Source: CNN Fear & Greed Index

The NAAIM Exposure Index measures US equity exposure among active fund managers reported the highest reading for the year, the highest since November 2021. (The Nasdaq peaked in November 2021, and the S&P 500 just over a month later in January 2022). 

 

 

Source: NAAIM Exposure Index

The following chart of the S&P 500 marks the relative peaks in sentiment and equity exposure using the CNN Fear & Greed Index (marked by red arrows) and the NAAIM Exposure Index (marked by blue arrows). It is a clear observation that the combination of excessive greed and elevated equity exposure have preceded all meaningful declines since the 2022 peak. I do not think it will be different this time.

To end last week’s note I summarized this chart as presenting a compelling argument for selling into greed— I still feel this way. Momentum has propelled the market through the year, however this is recently being subtly being interrupted. In the lower panel of the chart is the Percentage Price Oscillator. This oscillator offers a quick insight into trend momentum. The red dots within the panel signify negative crossover events, a slowdown in momentum.

 

In my analysis, momentum interruption occurs when the initial negative crossover is not succeeded by a corrective price move. Instead, price continues to climb with successive negative crossovers, creating a pattern of interruptions. Based on my observations, the decline that follows such an interruption cycle tends to erase most of the earlier advance.

 

The previous instances of momentum interruptions in August 2021 and July 2022 exhibit an intriguing resemblance to the current scenario, with the index rallying approximately 5% as momentum decelerated. In both cases, the subsequent decline erased most of the earlier advance. A comparable outcome today would potentially bring the index down to 4550. In my analysis the immediate term has the signals flashing caution towards a 5% decline. If this scenario unfolds, the speculated decline will initially be favored as being one of health that sets the index up for an additional leg higher. I speculate the correction will have the S&P 500 trade between 4500 - 4600 in the near term. Should this unfold, it will initially provide a healthy technical appearance where price revisits the breakout area.

 

 

Reference:

Tom (Dec 31, 2023) - State of the S&P 500.

2024 Economic Forecast │ James Kim

The interest rate changes in the United States trigger international capital movements, which are reflected in the Dow Jones Index, an indicator of such movements. To predict future economic conditions, understanding the trends in U.S. interest rates and the Dow Jones Index can provide insights into both the U.S. and global economies. To comprehend the economic situation from 2023 to 2024, it's observable that the patterns of interest rates and Dow Jones Index during 2006-2007 are similar. The period when the U.S. continuously raises interest rates and then freezes them, leading up to a rate cut, is known as the 'Goldilocks' period, which is typically a phase of a major bull market in stocks.

 

 To aid your understanding, I have specified concrete dates. 

Think of these as reference points, focusing on the patterns and the dates surrounding them.

 

 When interest rates are frozen consecutively three times (Point (d)), the market gains confidence that there will be no further rate hikes. Similar to 2006, when three consecutive rate freezes led to breaking historical highs, the same pattern was observed on December 13, 2023, breaking the historical high of January 4, 2022 (Point (f) ).

 

The peak of the U.S. economy is predicted to be on May 8, 2024, with the U.S. stock market artificially creating a peak for about six months (until the first rate cut). The global economy, with the decline of the U.S. dollar, moves towards a strong bull market in individual countries. The magic of exchange rates creates opportunities for profit through currency differences and stock appreciation, leading to a surge in global stock markets. Global and U.S. stock markets are expected to start declining simultaneously around November 15, 2024 (just before the U.S. rate cut). At this point, the U.S. economy would have been declining for about six months from its peak, while the global economy, excluding the U.S., remains stable.

I believe there are signs of a weakening U.S. economy, which will lead to the start of interest rate cuts by the end of 2024. Eventually, about a year later on December 12, 2025, both the U.S. and the world will face an economic crisis. The peak of the U.S. economy is expected in May, while the global economy is predicted to peak in the second quarter of 2025 [...] I hope you too can achieve favorable outcomes during this time.

(1. - 4.) On August 2, 2023, through my posts, I predicted the breaking of the historical high of the Dow Jones Index and the freezing of U.S. interest rates (the Goldilocks period). I forecasted the peak of the stock market, the timing of the economic crisis, and all phases up to the great depression in 2032. By looking at my past Twitter posts, one can see that the results are following the same patterns exactly as predicted. My posts will be helpful to understand these patterns: 

(1.) Prediction of the 13th and 14th Cycles of the U.S. Stock Market (August 2, 2023): This post outlines my predictions for the 13th and 14th cycles of the U.S. stock market and its potential trajectory. 

(2.) Forecast for the 14th and Current 15th Cycle (Great Depression Period) of the U.S. Stock Market (August 2, 2023): In this tweet, I discuss the ongoing 15th cycle and its connection to the anticipated great depression period.
(3.) Prediction for the 14th and Current 15th Cycle of the U.S. Stock Market (August 2, 2023): This tweet further elaborates on my predictions for the 14th and current 15th cycle of the U.S. stock market.
(4.) Estimation of the Dow Jones Lowest Point, Interest Rate Freeze (Goldilocks Period), and Major Bull Market (August 3, 2023): This post from August 3, 2023, predicts the lowest point of the Dow Jones, the freezing of interest rates (Goldilocks period), and the onset of a major bull market.

Quoted from:

James Kim @ X (Jan 2, 2024) - 2024 Economic Forecast.

A Way Of Seeing Infinity │ Benoît Mandelbrot

 

 » Why is geometry often described as 'cold' and 'dry'? One reason lies in its inability to describe the shape of a cloud, a mountain, a coastline, or a tree. Clouds are not spheres, mountains are not cones, coastlines are not circles, and bark is not smooth, nor does lightning travel in a straight line [...] Nature exhibits not simply a higher degree but an altogether different level of complexity [...] Bottomless wonders spring from simple rules, which are repeated without end. «

 

Benoît Mandelbrot,  Fractals: Form, Chance and Dimension, 1977.

 

Infinite Self-Similarity-Zoom.

The Time of the Civilisational States │ Alain de Benoist

The way in which, since the 1990s, the Chinese authorities, claiming to have ‘Asian values’, have rejected criticism in the name of the human rights ideology is significant. In January 2021, at the Davos Forum, Xi Jinping said, ‘Just as no two leaves in the world are the same, no two histories, no two cultures, no two social systems are the same. Each country is unique in all these areas, and no country is superior to another. There is no need to worry about differences, but rather about attempts to impose a hierarchy between civilisations or to force some of them to align themselves with another in terms of history, culture or social system.’

 » The logic of great spaces does not have a universalist scope. The paradigm is no longer national, but spatial.’ «

Carl Schmitt, 1941.

The recognition of the crisis of universalism and Western hegemonism thus goes hand in hand with the feeling that the era of the international order based on the conflicting balance of nation-states has ended, as Carl Schmitt foresaw as early as the 1930s. The rise of civilisational states signals the entry into an era in which the world order is no longer reduced to the unstable equilibrium of nation-states. As civilisational norms become a pivotal point in geopolitics, the main competition is no longer the traditional one between nation-states but the one between civilisations. Civilisational states give rise to a new mode of sovereignty that is no longer that of nation-states. 

 

[...] The notion of the civilisational state is even more reminiscent of the ‘great space’ (Großraum) theorised by Carl Schmitt to rethink international relations beyond the codification of relations between nation-states. A ‘great space’, Schmitt says, requires a ‘great people’, a vast territory and an autonomous political will. ‘Empires’, he writes, ‘are those ruling powers that carry a political idea radiating out into a determined great space from which they exclude, as a matter of principle, the interventions of foreign powers.’ And he adds this essential reminder: ‘The empire is more than an enlarged state, just as the great space is not just an enlarged micro-space.’ ‘The logic of great spaces does not have a universalist scope. It only integrates the historical evolution of the great territorial powers influencing third countries. The paradigm is therefore no longer national, but spatial.’

Quoted from:
Alain de Benoist (Apr 26, 2023) - The Time of the Civilisational States.

 

See also:

Carl Schmitt (1941) - Völkerrechtliche Großraumordnung mit Interventionsverbot für raumfremde Mächte. Ein Beitrag zum Reichsbegriff im Völkerrecht. (Great Space International Law with a ban on intervention by powers alien to the area. A contribution to the concept of empire in international law.)
Carl Schmitt (1940) - Großraum gegen Universalismus. (Great Space vs. Universalism.) 

The Geopolitics of Distributed Heartlands │ Alexander Dugin

The fight to rule Heartland – by Sea Power from without, or in Heartland itself from within – is the main formula of geopolitical history, the very essence of geopolitics. Geopolitics is the battle for Heartland. All schools of geopolitics are founded upon and proceed from this model [...] Just as the multi-polar world arises, so does a contradiction. If we take into consideration only one Sea Power and one Heartland, then when it comes to speaking of a multi-polar world, Russia cannot possibly be the only Heartland. Russia cannot achieve a multi-polar world on its own. In the very least, multipolarity entails four or five of the most important poles in the world. Russia could be the center of this multi-polar world or only one of its poles. But Russia cannot be the only Heartland.

 

 » It is surprising that at the bottom of our politics we always find theology. «
Pierre-Joseph Proudhon, Les confessions d'un revolutionnaire, 1849.

[...] Over the course of numerous discussions, conferences, speeches, lectures, and articles, I have come to the conclusion that it is high time to introduce the notion of an apportioned, or “distributed Heartland.” To this end, I think it is important to attentively examine the German geopolitics of the 1920-’30’s, which proclaimed Germany to be the European Heartland. Of interest to us is not so much Germany itself as the very possibility of considering an additional Heartland [...] A Chinese Heartland is an altogether different question. China, after all, is Rimland, a coastal zone. If we recognize China as bearing the status of a Heartland, then we are recognizing China as an independent strategic space. If we qualify China as Heartland, then we are emphasizing the conservative aspect of China – China as Land Power. But if China declares itself to be a Heartland against Russia, just as Hitler’s Germany declared itself to be the heart of Eurasia against Soviet Russia, then conflict will immediately arise.

If Russia retains the status of an independent pole, then this “distributed Heartland” acquires a completely different meaning. Then it is possible to consider such Heartlands as a Russian Heartland, as in all traditional geopolitical maps as the “geographical pivot of history”, and a European Heartland. We also arrive at considering a Chinese Heartland, and this means that we consider China as a traditional, conservative, independent, and sovereign state as it is today – and it will only become more so in the future. In the very least, it is important to reconcile the Chinese Heartland with the Russian Heartland, and partially even the European Heartland. But even this is insufficient to constructing a multi-polar world. We necessarily have to consider an Islamic Heartland (covering the historical spaces of at least 3-4 empires, stretching from Turkey to Pakistan). The concept of a distributed Heartland can further be expanded to India, and projected onto Latin America and Africa as well.

As follows, there should be an American Heartland in the multi-polar system. We have become too accustomed to thinking in the terms of classical geopolitics that the US and Anglo-Saxon world can only be Sea Power. In a multi-polar world, America will not be able to play this role, its global maritime range will naturally be reduced, thereby changing the very nature of America. As follows, an American Heartland should arise which, in a multi-polar system, should not be seen exclusively as in opposition to other Heartlands. The vote for Trump represented the contours of this American Heartland. If we begin to conceive of Heartland as a distributed type of culture associated with the reinforcement of conservative identity, then “Make America Great Again” is the thesis of an American Heartland. Stop being a Sea Power, and you will be great again.

[...] Distributed Heartland is the imperative of the new geopolitical model, of multi-polar geopolitics. I think that this concept deserves very serious cogitation, pondering, and description. There should be a number of conferences, or an even entire volume devoted to this inevitable question. The efficacy of this concept of distributed Heartland is, in my opinion, extremely important, insofar as the construction of a multi-polar world now demands clearer and more precise roadmaps.

Quoted from:
Alexander Dugin (2019) - Towards a Multipolar Geopolitics.

 

See also:

Alexander Dugin (2012) - The Theory of a Multipolar World.

Carl Schmitt (1941) - Völkerrechtliche Großraumordnung mit Interventionsverbot für raumfremde Mächte. Ein Beitrag zum Reichsbegriff im Völkerrecht. (Great Space International Law with a ban on intervention by powers alien to the area. A contribution to the concept of empire in international law.)
Carl Schmitt (1940) - Großraum gegen Universalismus. (Great Space vs. Universalism.) 

2024 S&P 500 Election Year Seasonal Pattern │ Jeff Hirsch

 2024 is an Election Year and the sitting President is running for office again. 

In this constellation the S&P 500 typically tends to (1.) trend higher from early January into mid February;  

(2.) decline into late March; (3.) rise up for the rest of the year, especially after elections.

Also take note of Larry Williams' re-election pattern.

 

The S&P 500's average annual return during Election Years is 11.6%. Since 1833 the fourth year in the Decennial Pattern has been up 13 vs 6 times down with an average annual return of 5.22%. Over the past 30 years, January gains have occurred 17 times (57%), while losses numbered 13 (43%), barely better than the flip of a coin. In bull markets, New Moons are bottoms, and Full Moons are tops. In bear markets, New Moons are tops, and Full Moons are bottoms. More often than not, stocks will rise from around the 7th to around the 14th calendar day of a month, fall from the 14th to the 20th, and rise from the 20th to the 25th.

 

In 1967 Yale Hirsch published the first Stock Trader’s Almanac and presented the Four Year Presidential Election Cycle as an significant and predictive indicator of stock market performance. The outcomes are relatively steady, regardless of the president’s political leanings in office at the time, and the year after each presidential election marks the start of a new four-year stock market cycle. Considering annual returns of each year in the four year cycle, the Pre-Election Year (2023) is considered best, and  the Election Year second. The most predictive period of the year is November 19th to January 19th. Wayne Whaley coined it a 'Turn of the Year (TOY) Barometer'. If the return of this 2-month period is greater than 3%, a bullish signal is given, and the market is very likely to do well over the following 12 months. If the return is 0-3%, the signal is considered neutral; and if the return is negative, the signal is bearish, and returns very poor. Currently the S&P 500 still trades some 6% above the November 19 level.

 

The 250 year US empire live cycle concluded in 2023. Demise by folly overstretch. Uni-polar global supremacy is over, and Russia, China and Iran stronger than ever. A multi-polar world of worlds now knows how to deal with a paper-tiger gone mad. All star-spangled striped monsters check-mated, defeated and unveiled 24/7 along the many battle fronts on the globe. Project Ukraine lost. Now supervising genocide in Palestine. Yemen's Ansar Allah controls the Bab al-Mandab and launches full front attacks against the hegemon. An emerging Muslim alliance will liberate the Holy Land. Iran may shut down the Gibraltar strait any moment. The Taliban will enter Jerusalem and flatten Tel Aviv. Zionist Saudis and emirs doomed. Revolutionary Shia will root them out. The fever pitch increases. As some discard all this as hysteria and Islamist war propaganda, the dollar hegemony is rapidly melting away under the world island's rising sun. 2024 will be a remarkable 'election year'. W.D. Gann projected 'major panic, breadlines, soup kitchens, despair, and unemployment' into the US of 2024. And US astrologer L. David Linsky sees the home-front ready for more mayhem, upheaval, war and regime change. Plenty of opportunities along the lines and times in the above seasonal roadmap for 2024.

 

 

The Kitchin Cycle and the Benner Cycle are bullish for all of 2024 and 2025 (historically the fifth year outperforming all other years in the decennial pattern). In the current decennial cycle Larry Williams identified June 2024 as "the sweet spot with 90% accuracy" to buy stocks until December 2025.

 

 

 

 

 

In January 2024 the Sensitive Degrees of the Sun are:

Jan 02 (Tue) = Earth at perihelion = positive = high
Jan 06 (Sat) = negative = low
Jan 19 (Fri) = negative = low
Jan 30 (Tue) = positive = high

The Turning points in the Geocentric Bradley Barometer are (+/-1 CD):

Jan 04 (Thu) = Low
Jan 13 (Sat) = High
Jan 22 (Mon) = Low
Jan 29 (Mon) = High

The SoLunar Rhythm during January 2024: 

 

Additional References:
Seth Golden (Dec 26, 2023) @ X

Dimensional (2023) - Market Returns During Election Years.

IsabelNet (Dec 12, 2023) - S&P 500 Day of Month Seasonality Returns 1928 to present.

 

 Last time the S&P 500 was up 9 consecutive weeks was in 2004 and before that two 9-week win streaks in 1989 and in 1994,

before that a 12-week win streak in 1985. The next years' returns were:
1986 = 14%
1990 = -4.5%
1995 = 34%

2005 = 3%

 

 

S&P 500 Index vs 18.61 Year Lunar Node Cycle │ Projection into April 2024

 

Dec 21, 2023 (Thu) = May 10, 2005 (Tue)

 

 

 In bull markets, New Moons are bottoms, and Full Moons are tops. 

Jan 3 (Wed) 22:30 = 270° = Last Quarter    
Jan 11 (Thu) 06:57 = 0° = New Moon    
Jan 17 (Wed) 22:52 = 90° = First Quarter    
Jan 25 (Thu) 12:53 = 180° = Full Moon    

Seasonality Map for Currencies, Stocks, Bonds & Commodities

This heat map shows the average historical % change in price each month over the last 20 years. 

(Percentages updated for 2023).

Reference:

Markets Made Clear.

See also:
Equity Clock.
Seasonal Charts.

Insider Week.

Moore Research Center.

 

2024 in W.D. Gann's Financial Time Table

2024

» Major Panic - CRASH! «

» 4-years of falling prices, business stagnated, breadlines, soup kitchens, despair, and unemployment. «

Quoted from:
TPR (2012) - W.D. Gann's Financial Time Table 1784 - 2121 | Extended and Adjusted.

2024 in the Four Year Election Cycle │ Dimitri Speck

 

Dow Jones, 4-year cycle, calculated over 121 years.

2024 is an election year. The election cycle suggests a weak first half of the year,  and a good second half. The election year gets off to a weak start. The left quarter of the chart shows the typical performance of the Dow Jones in election years. As indicated by the red arrow, these typically posted losses in the first half of the year. After that, things look much better, as indicated by the green arrow.

Quoted from:
Seasonax (Dec 13, 2013) - 4-Year Election Cycle: How will 2024 go?

2024 US Stock Market Outlook │ Larry Williams

 

Larry Williams' 2024 projection for US Stocks:

 

First week of January to last week of February - UP

 Last week of February to last week of April - DOWN

 Last week of April to last week of Juli - SIDEWAYS-TO-UP

First day to last day of August - UP

First week to third week of September - DOWN  

  Third week to fourth week of September new high of the year - UP

Fourth week of September to first week of November - SIDEWAYS-TO-DOWN  

 First week of November to first week of December - UP

 First week to third week of December - DOWN

 Third week to last trading day of December printing the yearly high - UP

 

The December 2023 Low is a key price level in Q1 of 2024. 

 

Larry Williams identified June 2024 in the current decennial pattern 

 as "the sweet spot with 90% accuracy" to buy and hold until December 2025.

 

 

Reference:

Larry Williams (Dec 15, 2023) - 2024 Market Outlook. (video)

 MRBullMktEver (Dec 18, 2023) @ X

S&P 500 │ 2023 Still An Inside Year

 S&P500 (weekly candles)

The 2023 yearly target remains above the January 2022 high at 4,817. Price currently above Level 2 and above the July 2023 third quarter's high. 2023 is still an Inside Year, inside of the 2022 price range. The 2023 fourth quarter is an Outside Quarter. Eight trading days left before the year closes for another 120 to 140 points up into the Level 3 price target at 4,857 or even 5,000. From there a retracement down to around 4,587 - 4,440. The seasonal chart points to the 2023 high around Dec 26 (Tue). See also: The Yearly Market Maker Breakout Template.

 

S&P500 (4 hour bars)

Week Dec 18-25 sideways-to-up; Year-End-Rally;  early January 2024 high around 5,050. 

 

2024 in the Presidential Cycle Pattern

 

 

 

Reference:

Edward Yardeni (November 30, 2023) - Stock Market Indicators: S&P 500 Presidential Cycles.

War And Epochal Global Shift │ Pepe Escobar

  

Reshuffling the inner and the outer rim-lands of the world-island.
All of Halford Mackinder's geopolitical nightmares becoming tangible realities not only in Greater Eurasia
but across all lands still governed by the evaporating Western world order.
The petrodollar monetary system died just lately.

Brazilian geopolitical analyst Pepe Escobar breaks down the epochal implications of the ongoing military conflicts in Ukraine, Syria, Iraq, Yemen and Palestine; he explains the roles and missions of Russia, Iran and China and their leaders; he discusses the rise of Greater Eurasia under the alliance of the three main Eurasian powers; he reports on the drastic and unexpected swift collapse of the Western world order, civilization and hegemony over West Asia due to the waning influence of US neocons as well as due to fundamental US economic, strategic, diplomatic and military failures during the past three decades. The West's former proxy rulers in the Muslim world are shaking in fear. The widely detested opportunists they are, they now all changed sides. 

» The divine providence and mission of Russian President Vladimir Putin as God's chosen instrument and second Dhu al-Qarnayn,
the just conqueror,  lawgiver and savior of the Christian orthodox world and the world of Islam. «

Reference:
Pepe Escobar (Nov 26, 2023) - Gaza changes everything as Russia, China Confront Neocon Agenda for Middle East. (video)

Independent Islamic Republic (Dec 09, 2023) - Putin will establish the final world order for end times

- 2nd age of Dhul Qarnayn begins! (video)

The Yearly Market Maker Breakout Template │ S&P 500 Index 2018 - 2023

S&P 500 Index - 2018 to 2023 (blue line = 3 week moving average)

 

In the Yearly Market Maker Breakout Template price expansion takes out 

(1.) the High  

or 

(2.) the Low 

or 

(3.) the High and the Low 

of the previous year's price-range. 

 

Though price started expanding to the upside since the first week of 2023, 

neither the high nor the low of the 2022 price range has been breached by mid-December.

2023 remains an 'inside' year.

S&P 500 Index (15 minute bars) - December 5 to 13, 2023 (golden line = 3 day moving average)

Price currently moving within a bullish Weekly Market Maker Breakout Template;

printing new daily, weekly, monthly and quarterly highs.

Price range of Wednesday, December 13 (FOMC-day), the narrowest since weeks - so far.