Outlook in charts December 2022 till Early Jan 2023

S&P 500

After an awful month (the last four red candles), we finished the year at 3,839.50.    Most Wall Street analysts predicted the SPX would be up in the 5,000 area by year-end.    Clearly, they had an off year.    We’ve been holding steady between the 3,800-3,850 range. A break upward gets us to the 4,100 level. A likelier break downward takes us under 3,600.     My call for 3,215 remains, but we’ll need a few more rate hikes to get there.

Nasdaq Composite

December was awful for the tech space, and I suspect that will continue throughout Q1.  The other case is that this may be a double bottom, and we’ll bounce to 11,500. That better be the case, because there’s not much between here and 7,500 in terms of technical support levels for the Nazzie.

Russell 2000 (Small caps)

Though we had a down month, the Russell still deserves credit for holding up as well as it has.  But it looks like we’ll test that $162.50 bottom again. If we lose that level, we head to $145. If not, it’s back up to $187.

The US 10-Year Yield

In the last two weeks of the month, we rallied up to 3.88%.  I don’t think we’re done, as Chairman Pow won’t stop hiking just yet. We’ll get back above 4%, on our way to 5%.

Dollar Index

The dollar continued to get hammered throughout December.  But with the ten-year yield heading up, along with the Fed’s overnight rate, we may see a turnaround soon. Good traders always ask, “What’s the worst thing that could happen?” A whipsaw in the USD is the answer. I’m weary of it.

USG Bonds

Yup, it was a sucker’s rally.  I hate bonds right now and still can’t think of a reason to own them. If the inflation story was over, Powell would’ve stopped hiking by now. And bonds hate inflation.

Investment Grade Bonds

Again, another rally that’s run out of steam. We had a peep above the 200-day MA, but it was a false dawn. We’ll be back under $100 soon enough.

High Yield Bonds

Junk has turned around as well, just not as much as investment grade and government bonds.  I still think we’ll head down to $70 shortly.

Real Estate

Real estate surrendered November’s gain in only a month.  There’s nothing to get excited about in real estate with rates continuing upward. Back down to $75, I think.

Base Metals: Copper

We barely moved in copper this month.  The macro numbers look terrible, which skews my outlook to the downside. I bet we see $3.20 before we see $4.50.

Precious Metals: Gold

Ok, it seems the market has finally cottoned on to the inflation story properly. This is the first time in a while I’m completely bullish on gold and it feels good. Next stop: $1,880. Then $2,000.

Precious Metals: Silver

Silver indeed has come to life.  We’re up another $2.50 this month. But the market is looking a little winded. Don’t be surprised if we pause here for a bit before resuming our uptrend. Above $25, we can be comfortably bullish.

Cryptos: Bitcoin

From three months ago:

BTC’s chart is broken. I just don’t see how it’s going to recover this cycle. I’m still thinking $10,000. Or below.

BTC barely moved this month. I’d still stay away.

Cryptos: Ether

ETH was down another $50 or so this month.    Steer clear of the entire crypto ecosystem for now.