Stock Market correction full steam ahead
Stock-Markets / Stock Market 2023 Sep 25, 2023 - 05:09 AM GMTBy: Nadeem_Walayat
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Stock Market correction full steam ahead as the S&P ticks below the August low of 4340, closing Friday at 4320 thus continuing to target sub 4200 by Mid October with my pin point high probability target of 4150 now some 170 points away vs the S&P 2023 high of 4610 290 point above, thus about 60% of the correction is complete which has translated into huge price drops in target stocks from their 2023 highs such as AMD down 28%, ASML -24%, Qualcom & TSMC -23% and so on and even greater price drops in the higher risk stocks such as Roblox -46%, with even greater blood baths in the housing stocks.
So the S&P down 6% does not tell the true story of a market increasingly being forced to discount a recession of sorts during 2024, which is my base case for next year. Given that there isn't any economic data that points to a US recession right now it is hard to quantify the depths of, still it is what is most probable and hence my view that the highs are in for some time for most stocks i.e, for at least a year, so I would not expect a repeat of the likes of AMD spiking to $132 any time soon!
A further 4% drop in the S&P should translate into triple that in many target stocks, though I can already hear murmurs of feeling the PAIN as stock prices drop in the comments despite the fact that this is what folks have been waiting for several months!
MSM have got their knickers in a twist over the Fed's latest dot plot which suggests rates will end 2024 at 5.1%. The Fed dot plot is meaningless drivel. For instance there Dot Plot of Dec 2021 forecast .0.75% for 2022 and 1.75% for 2023. So understand this the Fed funds rate will NOT be 5.1% at the end of 2024, likely a lot lower.
My portfolio currently stands at 78.4% invested, 21.6% cash with the drop in the value of stocks masking buying in AMD, TSMC, ASML, CRUS, PRX, INMD, ULH.RDFN, MGNI and RBLX. With my eye on capitalising other target stocks as they fall into their buy zones as the correction fulfills expectations for targeting S&P 4150. I also have an eye on the so far elusive Bitcoin price drop below 24.8k to target 20k to double my BTC holding to about 0.7% of portfolio.
https://docs.google.com/spreadsheets/d/13gDntQuyDP3db7WqEvOXftOxVVTJyYyB_s-O0XW2EIk/edit?usp=sharing
When alls said in done we are in the expected correction that is going to see the bull market mark time i.e. I don't see how we get to new all time highs anytime soon BUT being in a bull market means the risks are to the upside hence why I remain eager to accumulate as opportunities arise as my post correction expectation's remains for a year end rally that could see the S&P back over 4500.
Meanwhile in the UK folks should baton down their hatches for a Labour Government during 2024, Rishi is hopeless, even replacing him is not going to undue the damage done since the Tories ejected BJ, The Tories are going to try and pull a rabbit out of the hat to game the election in their favour, they are going to try and bribe the electorate but the gap between Labour and the Tories right now is a huge 24%, that's not going to get filled. not with an idiot such as Sunak in charge! Labour will win! As for when the election will be held? If I was Rishi looking at the polls I'd try and stay in No 10 for as long as possible on the chance of getting lucky and the polls turning, but he is an idiot so the election could come anytime between March and December 2024..
I continue to target the completion of 'How to Get Rich' Part 2 before the end of this month.
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S&P
Targeting 4600 Mid Summer 2023 Top, followed by correction into Mid October.
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Your trimmed the FOMO to buy the Dip analyst.
By Nadeem Walayat
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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