Happy New Year – and for what it’s worth (perhaps not much!) I think this year will be better. Of course, I could be wrong, just as the smart money was last year. Barclays predicted a close of 3,675 for the S&P 500, Societe Geneérale went for 3,800, with Morgan Stanley, UBS and Citi all at 3,900.
And yet the S&P 500 closed at 4,770. All of them were not only wrong, but very wrong. So if those with a bigger bankroll, bigger team and bigger brains than me can be so wrong then what chance do I have? As I said earlier, perhaps not much. I go by charts, and in November and December stocks were rallying. Breakouts were holding and advancing, with many stocks making material gains. Add in the fact that inflation looks to have peaked and that there are rate cuts on the horizon, and this stimulates sentiment as the market is forward looking.
My opinion is that charts rule. If stocks start falling and the market can’t catch a bid then I need to change accordingly. Far better to be wrong and keep my account intact, than go bust trying to be right.