Forecast Friday 📉
15 day forecast: SP500 ▲+0.6% | BTC ▲+2.9% | 10Yr Treasury Yld ▲+0.6% | VIX Volatility ▼-9.7% | Gold ▼-0.7% (as of 4/19/24)
It’s been brutal in the markets lately. If you try to stay on-top of market swings, any data is helpful — why not subscribe to my weekly market forecasts? Send an email: 4lightsdata@gmail.com
Some notes:
The S&P500 has been 📉📉📉. There are probably a combination of a few things happening: 1st, profit taking - we’ve had an incredible run and it makes perfect sense to take some profits. 2nd, “Sell in May and go-away” is an old Wall Street concept that observes a historical pattern of weakness in stocks in May. 3rd, inflation is still too hot. The Fed is not going to give us any breaks on interest rates in this environment, and the market is downshifting as a result.
Bitcoin is basically flat for the last 50 days after giving up most of its recent gains. The big news in BTC is the “halving”. Essentially, it is getting ready cut it’s supply growth by 1/2 (only 21 million BTC will ever be issued, and about 19 million of them have been “mined” so far). Halving cycles have historically been highly profitable.
The 10-Year Treasury Yield model now has very high confidence that yields will keep rising (high ▃▅▆▉ robustness score). A high 10-Year is bad for stocks and the economy overall — homebuyers need lower rates. 30-year mortgages are now back above 7%!
The VIX Volatility Index is likely to decrease significantly, according to the model. This would be great news. The model correctly predicted a spike in the VIX last month, (but it also predicted the SP would keep chugging higher). Remember, the VIX also reacts to events like military escalation.
Gold 🪙 is the newest addition to the model. It’s not particularly confident right now, but it’s predicting prices will come down slightly. Costco (one of my favorite stocks) has been selling hundreds of millions in gold bars recently.