From an indices point of view, the rally is starting to struggle but we're seeing some rotation though not very discernible from a sectoral point of view.
Where it goes from here into 2024 depends on whether we get soft landing or a recession ahead. Markets are running higher post Fed 'pivot' is premised on a soft landing, in other words the markets have more or less discounted recession.
Again my views and my hopes are at two different places - my view is that the odds are still stacked against a soft landing scenario and the markets would be blindsided (again) this time more notably; my hope however is that I am wrong, because my concern is that a recession in 2024 is unlikely to be the garden variety type but closer to one that mirrors 2008/09, we have an Everything Bubble now. This is why I have and am sidelined on equities. And as I had expressed earlier, today's market gives me the deja vu feeling of Q4 2019 rally all over again, something could be about to hit the markets in Q1 2024, possibly as early as mid Jan. If I am right, I don't lose, if I am wrong, the world remains a better place and I don't lose too, and I am also convinced that even if we get a bull market, it is not a 'rising tide lifts all boats' type of market, i.e you can also lose money even if the market goes higher, as this is a stock pickers market. Winning is Not Losing (Vern Gowdie is not to be forgotten).
Now if you hope that the market top necessarily implies a pathway for Gold to rise higher, history has shown that Gold would likely follow equities lower, in 2008, it diverged for a short time then followed equities lower and gold stocks were hit harder than general equities....but if one is patient enough, Gold and then gold stocks would rise from the ashes to usher in a new bull market in the aftermath of the crash...that is when the Fed dramatically cut rates and introduce QE.
Gold and gold stocks do best when the rest of the asset classes have hit the fan and gets the exclusive love without competition. In the meantime, they could still thrive as long as market exuberance continues on the Goldilocks theme. But make no mistake, if Gold does exceptionally well, we could be in a terrible place and not sure if Gold's rise could offset our personal losses against higher inflation, property depreciation, job losses and personal security. We won't hope for that, not even if you believe in an after life, however divine. That said, as Jim Rogers say, we ought to have some allocation to physical precious metals -he shuns paper gold of all types.
Merry Xmas , aimone. Spend less time reading alternative news, alternative is not always the 'truth', most of the time unfounded speculation and at worse conspiracy theories.
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