Last night we highlighted how major volatility is likely to kick off in the major indexes over the week ahead. If stocks can hold above their recent lows, a rally can last into the end of the year. Alternatively, if a powerful sell-off takes hold over the days ahead, 3,900 SPX can be reached before 2024. Regardless, all paths lead lower with a high degree of certainty into next spring. Powell’s rhetoric has only reaffirmed that the Fed will maintain rates at restrictive levels despite the questionable optimism from the market after occasional Fed meetings such as yesterday’s.
Short term thoughts (Dow, S&P 500, and Nasdaq):
70% probability of decline to 3,927 SPX
Intermediate term thoughts (Dow, S&P 500, and Nasdaq):
Final bear market low occurring at 3,000 – 3,400 SPX during Q1 – Q2, 2024
Long term thoughts (Dow, S&P 500, and Nasdaq):
Bull market 2025 – 2031
Especially with gold nearing its all-time highs, silver has an excellent value proposition with the potential to reach significantly higher than its current price. Both the gold/silver ration and ratio of silver to stocks indicate now is a great buying opportunity for the industrial metal for the years ahead.
Natural gas has yet to fulfill its bullish coil chart formation and has a high likelihood of reaching over $9 within the next several months. Just like in the stock market, we still would not chase any rallies under present circumstances.