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1Q 2024 Targets

Happy New Year!

2023 was a crazy year! I think 2024 is going to be a year that stands out for a LONG time when it comes to markets. I tend not to analyze markets on time frames higher than the weekly - except when it comes to anticipating the quarterly shift - as when you can get a weekly chart to align with the Quarterly shift - you have all the wind at your back for entering positions.

Now that 2023 trading is closed, I want to start to touch on what I see for the Quarterly shift projections going into Q1. This is the exact same analysis I use on the weekly chart, but this is on a quarterly chart and gives us an even larger bias for the next 3 months. My regular weekly post will cover bias heading into the the upcoming weeks.

DXY: DXY on the 3 month chart shows us that we are still in this bullish quarterly FVG. I am expecting DXY to start to move higher from here - which will put pressure on commodities and stocks as well.

Interest Rates: The 10yr has had a monster past 2 years, basically ending a 40 year bull market in bonds. As we move into 2024 and economic macro worries grow, I think we could easily see a 2% on the 10yr - this is due to the fact we have swept external range liquidity on the 10yr, and now we need to back-fill some of the inefficiencies. Stocks won't care at first why rates are dropping - but they will catch on soon enough as the bond market continue to ease into macro worries.

For added Macro thought- here is the Monthly chart of the 2yr/10yr spread - we are at ALL TIME RECORD inversion - keep an eye on this as when the 10yr finally gets above the 2yr - its a really reliable recession indicator. Note the dates on the vertical red lines...

Nasdaq: Looking at the Quarterly Chart of the March /NQ contract - you can see what a vertical jam job this thing has been. The caveat here - is that ALL of the liquidity is now lower.

From here, I am expecting for a move to internal range liquidity (a FVG) that could result in anywhere from 16-25% down move. The catch is - if we break the October lows, this will print a QUARTERLY shift in market structure which will be a big deal.

In Summary:  I am looking for the yield curve to un-invert which will be a major recession indicator as we are at all-time-record-duration-and-size for the 2s/10s inversion. This can happen via the 2yr dropping in rates, the 10yr rising in rates, or a combination of both.

From here, I am also looking for a quarterly shift up on the DXY - which makes sense as if the yield curve is un-inverting, this will cause massive pressure to stocks and accelerate selling. When people sell positions, they are buying DXY - and thus a feedback loop begins feeding on itself.

I am also looking for the Nasdaq to make a 16-25% drop from HERE at 17,000. I am unsure if we make new highs first, but it wont change the downside targets of 14,250 initially and the preferred one of 13k.

See yall for Q2!

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