New readers of my thread should note an important caveat, what...

New readers of my thread should note an important caveat, what I've stated lately in this thread does sound bearish but I repeat that that is not a recipe and certainly not a recommendation to be a Bear i.e short or buy short-related products. Personally, I reiterate that I never ever short individual stocks or indices and the furthest I have gone has been buying short ETFs.

And long term readers of this thread also know that whatever I express as opinion here usually does not result in the predicted outcome immediately, many times several months later but as with everyone, I do have my share of being wrong. None of it is advice, but just insights into risk reward probabilities, because in truth, no one can predict what will happen and how the markets will respond. And some of my views are influenced certainly by contributions from a variety of market observers.

We are now living in a world where realities are clouded by divided beliefs on truth, and as the market is a reflection of the aggregate opinions and beliefs of market participants, we should expect there to exist a potential considerable lag in time between how market participants view the reality as opposed to the reality itself. This new phenomenon has made all conventional forecast as to how markets ought to react much more challenging. Given this, I would not do any good to make specific predictions on what 2024 would hold for the markets. The S&P500 has the capacity to reach short of 5,000 just as much as it is able to correct to 4,000. But as we all know by now, and which the thread has emphasised so often, it is not the major indices that matter, it is what your stocks do that matter. And a bull in Wall St does not necessarily and proportionately result in a similar positive outcome on our local ASX stocks, as we found out lately. US stocks could be driven higher by stronger promises of the AI revolution, which could make their mega techs stronger with time, but such positivity is not transmitted to our local bourse which is beholden to the fortunes of the Chinese economy and the prices of commodities. I do however expect 2024 to be even more volatile and blindsiding than 2023 has been, volatility is great for those who are great with trading but in trading, as long as one is continuously in the game the entire season, gains are more likely to be offset by losses so it could all be a zero sum game if traders do not know how to steer clear when the storm approaches or in play. Stock picking or selection would be even more crucial and we're likely to see more yesterday's winners in 2024.

I do maintain that the best environment for stocks would be for the S&P500 to hover sideways between 4,200 and 4,800 throughout the course of 2024. The higher it pushes out of this boundary, the bigger the risk we face with a bigger shock to the financial markets. The bigger its rise above 4,800, a big melt-up is more likely to be followed by prospect of a bigger market correction when exuberance and expectations diverge considerably away from the realities of the economy and corporate earnings outlook. In 2023, businesses could raise prices to maintain their profitability because consumers absorbed the higher prices that they grew to accept on the basis of higher inflation (due to war and supply shock), but in truth they were just price gouging. In 2024, they are unlikely to be able to do this much longer as consumer purse shrinks, unemployment rises and they face greater regulation to ensure they do not price gouge, and on top of that the justification to raise prices is no longer there with disinflation now in progress. So corporates and businesses will do the next thing to keep their profitability - and that is by cutting costs which leads to higher unemployment and accordingly reduces consumption leading to economic deceleration, so the declines are well ahead - the bigger question is if the Fed's cut is timely to avert a recession or to coincide with one that is already in motion?

2024 is vulnerable to an Event shock we may not yet know, which leads to a major market correction and typically a major market correction leads to a more severe recession. Does a recession cause a major market correction or a major market correction cause a recession? Usually you will find it to be the latter. An Event shock could be one that is slowly manifesting beneath the surface under the pressure of all the rate rises over time- one that comes to mind is the humongous US commercial real estate (CRE) market. The other is the BoJ bond market. And I am sure there will be a number of others that has yet to come to surface but will know in due time.

As we recall Mark Wahlberg's "Fortune Favours the Brave" crypto promotion ad was aired just about one month before BTC peaked and crashed in 2021, fortune does favour the brave, but in the time of our choosing. Choose the wrong time to be exposed to risks is being unintendedly or purposely oblivious.

Once again as 2024 beckons, at the end of the day, it is important to acknowledge that We Are The Choices We Make.
...and Doing Nothing Is Doing Something.