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7 Key Predictions for My 2024 Market Forecast

by | Dec 11, 2023

Let’s cut to the chase. Here are my seven key predictions for 2024.

Prediction 1: Equities Will Rise

The S&P 500 will continue to move higher on the back of global liquidity expansion.

Volatility is VERY low right now, a hallmark of bull markets. The U.S. dollar is heading lower, benefiting emerging markets in next year’s second half. I think the markets are heading higher into 2026 – and the reset or crash everyone is predicting will happen then.

I know it’s a ways off, but liquidity expansion matters.

China is a frontrunner to keep pumping money into the system – which positively impacts global economic expectations. I won’t make the same mistake I made this year by focusing too much on the Federal Reserve.

Instead, I’m watching all global liquidity sources – and the outlook is bullish in the medium term. Ups… and downs… are part of the market.

Prediction 2: Equities Will Also Fall

This market isn’t even close to unwinding all its central bank-related challenges.

The Bank of Japan is expected to start tightening its monetary policy, which would be a stark reversal from the last 10 years.

I expect two short-term downturns next year of at least 8%, marked by panic around the regional banking system, the presidential election, and the Treasury Department’s refinancing challenges problems in the repo markets (the Fed lent $200 billion in overnight cash last Wednesday, the highest since the COVID-19 crisis started. That’s not good…)  or any number of surprises on the horizon.

Seasonality will again guide those moves. While there’s a chance the Fed cuts rates by March, I’m leaning toward July, and impatience will certainly affect sentiment as the debate shifts from “How High” on rates to “How Long” above 5%? This is why it’s essential to watch overbought and oversold signals and play the game of the algorithms.

Prediction 3: Pundits will be Wrong… Often

You’ll need to zig where others zag because our Equity Strength Signals have been deadly accurate for this Fed-driven cycle since November 2021.

We avoided the March 2022 banking sell-off and called a bottom in October when technicals took us into oversold territory.

Oil prices had tanked since our sector signal went negative in September when I talked about the energy counter-narrative. This comes after banks in New York predicted $100 oil in the fourth quarter. They were wrong… and people need to stop listening to them.

Our rule is to: “Buy on the sound of cannons and sell on the sound of trumpets.”

Being a contrarian has paid off in the post-COVID era, and it will pay off again.

Prediction 4: Gray Swans Will Be Everywhere

There are some rather apparent threats to the market next year.

The Fed needs to get inflation down to its 2% target, but we’re not going to see that with increases in COLA payments and upticks in government spending. We’ll get to 2.5% in 2024 and not get to the end game until 2025.

The presidential election threatens to put things temporarily into disarray. I’m a guy who points the camera and figures out how to make money no matter who is in charge. We have no control over the election. You vote and wait to find out how the rest of the mob decided.

But I think this market will face a lot of pressure in October when polls reveal that Trump is on the verge of winning – largely due to Robert Kennedy’s allure in swing states. Kennedy will do more damage to Biden than Trump, the opposite of what most pundits believe.

Prediction 5: No Official Recession

This one will bug many people, but this is based on the trickery of the U.S. financial bureaucrats with too much at stake in the 2024 election.

Remember that they changed the definition of recession in 2022.

I’m expecting that only the second quarter of 2024 will see negative economic growth – and we’ll see plenty of government spending to keep propping up this economy. Buying oil at $70 per barrel gives the government plenty of ways to manipulate growth.

There are plenty of negative economic indicators because the Fed’s rate policies punish the private sector. But — and this is important – it doesn’t impact the largesse at the Treasury. These deficits are piling up, and this is why there will be a reckoning halfway through the next presidential term right around midterms in 2026.

Some say that warning people about something three years away isn’t good analysis, but it’s clear that liquidity is expanding in the years ahead. I argue that you use this period to take every damn dollar you can out of these markets by following momentum.

That’s because we’re on pace for the U.S. deficit to hit 15% to 20% of GDP in extreme weakness. You’ve got a few years before we reach the economic point of no return.

Take them seriously.  

Prediction 6: Insiders Will Call Multiple Short-Term Bottoms

If I’m wrong, and this market does collapse in March, or a reckoning builds due to deposits in the banking sector, there are two things to watch.

First, look for oversold technicals on the S&P 500 SPDR ETF (NYSEArca: SPY). I’m specifically talking about a Relative Strength Index under 30 combined with an oversold Money Flow Index at 20 or less.

Meanwhile, watch the insider buying signal we track at Executive Payouts Unlimited.

That signal has coincided with short-term bottoms for the last two years. Most recently, insider buying hit its strongest level in a year in late October before this rally commenced.

Prediction 7: Power Continues to Shift from West to East

The ongoing geopolitical winner of 2024… will be Saudi Arabia again.

The country continues to play chess while everyone else plays checkers. The government just announced a 30-year tax break — no corporate income tax — to any company that places a regional headquarters in the Kingdom, while the West is doing all it can to raise taxes on international businesses.

Western nations are currently run by inept politicians who have zero long-term thinking skills.

In late November, the United Arab Emirates stopped using the U.S. dollar for petroleum trading. The BRICS nations and their new members own the bulk of global oil production, rare earth production, metals and mining, and nuclear energy and weapons. America exports shows about dancing and stupid social policies that will fuel economic distortions.

Chat soon,

Garrett signature

 

 

Garrett Baldwin

*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. 

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WRITTEN BY<br>Garrett Baldwin

WRITTEN BY
Garrett Baldwin

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