Forecast Friday 📈
4Lights Forecasts: SP500 â–²+1.9% | BTC â–²+0.3% | 10Yr Yld â–¼-0.4% | VIX â–¼-13.7% | Gold â–¼-0.3%
Absolutely wild couple weeks in the markets.
Some notes:
The S&P500 has been absolutely wild: After a gut-wrenching collapse beginning last Wednesday, it has miraculously rebounded. The model seems to think the uptrend is resuming, but I’m still not convinced either way. I do think there are some good opportunities within different market sectors, at the moment. People seem to think that this market chaos will give the Fed an excuse to cut rates, but I don’t think the Fed cares about that — they are still laser focused on inflation, which continues to moderate.
Bitcoin seems a little lost, as well. It has had a monster year-to-date (+36%), but since March it has been entirely range-bound (basically bouncing back and forth between $55k and $70k). The model is basically saying it’s a 50/50 for higher versus lower over the next few weeks.
The 10-Year Treasury Yield definitely appears to be in a down trend. The model has pretty high confidence that yields will fall further. This probably reflects some expectations of softening inflation, slowing economic growth, and lower rates. The 30 year mortgage has now been below 7% since June, which is great for home buyers.
The VIX Volatility Index reached historically high levels (like, Great Financial Crisis levels) is likely to decrease, according to the model (low confidence). Some stability in the world — including potential peace plans in the Middle East— should reduce volatility.
Gold 🪙 looks like it is taking a pause over the short-term, but I think gold’s longer-term prospects are good. Especially as global military conflicts are still expanding.
Note: This is for informational purposes only and is not intended to be personal financial advice; be cautious — there is always risk involved with financial decisions!