12/28/2023: 2024 Prediction: Volatile Stock Markets
SPY 0.00%↑ is up 25.2% and QQQ 0.00%↑ is up 55.5% year-to-date. At the beginning of 2023, I wrote a post arguing stocks are still too expensive and we were likely to see new lows in 2023. I supposed the post I wrote reflected the super gloomy sentiment at the time. Not only did we not see new lows in 2023, SPY 0.00%↑ is near its all-time high as we approach the end of the year. But will the current bullish sentiment be an indicator of a difficult 2024 ahead? Nobody really knows. Instead of predicting the direction and being stupidly wrong, I would make a different type of prediction this year ;-). I believe 2024 is going to be an eventful year. We will have the 2024 presidential election, Gaza wars and Ukrainian wars are still raging, AI is advancing rapidly, the Fed pivot is supposed to officially take place, the RRP will run out, many zombie companies will officially file for bankruptcies and the future of inflation remains uncertain.
In 2023, SPY 0.00%↑ is trading between 377.83 and 477.55, a range of about 100 points. I believe we are going to see more volatility in 2024 as there’s quite a bit of FOMO right now and all the events mentioned above will likely make the markets more schizophrenic. To make it more concrete, my prediction is that the trading range for SPY 0.00%↑ will be greater than 105 points in 2024, which is more volatile than 2023, but potentially less than 2022's 120-point range.