Weekly Briefing 12/26/21 - The Forecast

Weekly Briefing 12/26/21

Weekly Briefing 12/26/21

Market Outlook:
Our expectation for Q1, 2022 is all-time new highs for the major indexes, while other secondary indexes may just re-test their November highs or even fall just shy of those peaks. These type of divergences are commonly seen before major tops form in the market. We expect Q1, 2022 to see one of these major tops. Our system will continue tracking two key time periods in Q1 for such an event to occur, and we will keep our Gold Members apprised through our Nightly Briefings. Once this top is in place, a quick, sharp move down will unfold to trap most unsuspecting long investors. We urge investors to ignore calls from market pundits/analysts of a prolonged parabolic move up in stocks. Similarly, fear-mongering perma-bears who call for an 80% crash in stocks annually should also be ignored. You will often see more headlines of this nature because fear draws the human eye – the same rationale for sensationally violent and negative news coverage in the media.  The bull market is not dead and has a good 8-10 years left with some bumps along the way.

Market Recap:

We urged our Gold Members to ignore the short term noise from the omicron variant that wrecked havoc on all asset classes starting late November as we entered positions in TQQQ near the early December lows. As expected, major indexes last week closed near all-time highs with many commodities, energy, and crypto assets all regaining lost ground from the mini omicron crash.

The short-term technical outlook showed positive developments. The S&P 500, the Dow, and the Nasdaq are now all back above their 50-day moving averages and are also well above their 200-day moving averages. Small-caps continue to struggle compared to the major indexes as forecasted. The Volatility Index (VIX) plunged as stocks bounced back, as the fear gauge dipped below 18 for the first time in a month on Thursday, and closed well below the key 20-level and both of its moving averages. Bitcoin also regained key ground showing a stronger technical outlook into this week.

Economic data this past week:

US GDP: Beat

Consumer Confidence: Beat

Durable Goods Orders: Beat

Personal Income: On target

Personal Spending: On target

Economic data this coming week:

 Manufacturing Index, Case-Shiller Housing Price Index: Tuesday

Pending home sales: Wednesday

Chicago PMI and weekly jobless claims: Thursday